Everything on table over state's $1.25 billion gap

PATRICK CONDON AND BRAD SHANNON, THE OLYMPIAN

OLYMPIA, WA - 12/16/01 -- Just how bad is the budget crisis facing the state of Washington?

Bad enough that last week the Department of General Administration decided to stop stocking free feminine-hygiene products in bathrooms at the state Capitol Campus.

Apparently under the theory that every little bit helps, that would have saved $5,500 a year in the face of a $1.25 billion budget shortfall. But the idea got the kibosh after some female state senators expressed concern that teen-age pages would be embarrassed to buy the products in the Capitol cafeteria.

But just about everything else is on the table.

Gov. Gary Locke will offer his plan this week for bridging the $1.25 billion budget gap. It's likely to include a mix of cuts to state services and programs, and new ways for the state to drum up badly needed cash.

Speculation arose last week that Locke's plan could include an expansion of state-sponsored gambling, perhaps participation in a multistate lottery.

Ed Penhale, spokesman for Locke's Office of Financial Management, refused to comment on any details of the plan that will be released Tuesday.

"We started with very large budget problems. We are going to make cuts," Penhale said. "We are going to try to soften the blow as much as we can in human services, but the other intent is to ... hopefully lower the cost of government over the long term."

As the budget team haggles over the final details, many longtime observers of the budget wars say it's time to fundamentally reassess the way Washington government functions.

"It's no longer a time to just be thinking about making up for a one-year deficit here or there," said Daniel Mead Smith, president of the Washington Policy Council, a conservative group. "It's time to change the way state government does business."

For Smith's group, the solution is allowing private businesses to compete with state workers for government projects. That's been a money-saver in states like Michigan, where a population twice that of Washington's is served by half as many state workers, Smith said.

Smith estimates such a move could save about $500 million in the next 18 months.

Cross to the other end of the political spectrum, though, and you'll find radically different solutions.

Aiko Schaefer, director of the Statewide Poverty Action Network, said her group has grown tired of seeing service to the state's poorest citizens serve as a perennial target for budget cutters.

"We're in a position where we have to keep asking, 'What vulnerable group can weather cuts better than another vulnerable group?' " Schaefer said.

"Who is the most likely to be able to live without their basic needs being met? We have to get to the point in this state where we don't have to ask that question."

Schaefer's group advocates raising more revenue. The first place to look is the tax structure, she said, which is among the most regressive in the nation, meaning low-income taxpayers pay a higher percentage.

For some, though, supporting the same state programs year after year without critically examining their effectiveness is not the answer.

Eliminating whole sections of government should be part of the debate, they say.

The most Draconian approach was offered by the Evergreen Freedom Foundation, an Olympia-based conservative group that favors holding all state-agency spending at June 2001 levels. It would kill any new program or spending increase lawmakers authorized in the 2001 legislative session.

That would save $1.7 billion. But it also would go in the face of two voter-approved initiatives that require more than $700 million in extra spending on K-12 class-size reductions and higher salaries for school employees.

From there, the foundation -- led by former legislator and accountant Bob Williams -- would take a hard look at every state program and ask if it really is in line with the state's core function or mission.

"Everything should be on the table" including K-12 education, said Jason Mercier of the foundation. Though Locke has vowed not to touch school funding, other groups support Mercier's contention that it at least should be discussed.

"You can't say that you're going to take a whack at the budget and then not touch one of the biggest pots of money in there," said Richard Davis, president of the Washington Research Council, a business-funded group. "It won't work."

In the meantime, a wide array of groups and individuals has offered suggestions -- everything from a 5 percent pay cut for state workers to participation in the kind of multistate lottery game Ohio and New York adopted recently to help with budget crises.

Sen. Darlene Fairley, a liberal Democrat from Lake Forest Park, a Seattle suburb, favors giving teachers a cost-of-living increase as required by Initiative 732, then cutting all state employee and K-12 workers' salaries by 5 percent for perhaps one year. This could save $160 million by her estimates, or more than $218 million by the Evergreen Freedom Foundation's calculation.

"All state employees, underline all, would be subject to a 5 percent across-the-board cut, but it would be temporary," said Fairley, who has expressed anger in the past over having to give extra money to K-12 education while cutting back programs that help the disabled or vulnerable.

Rep. Gary Alexander, R-Olympia, earlier this year pushed a provision to include Washington in the Powerball lottery, to raise money for capital construction projects. Though many legislators ridiculed the idea, Alexander said he hopes Locke will throw his weight behind a lottery proposal.

Right now, Alexander said, Washington residents' dollars are being spent on Powerball tickets in Oregon and Idaho.

"That's money we could be spending on education," he said.

For every idea or proposal that comes up in Locke's budget and in ensuing legislative proposals, of course, there will be someone to oppose it. Many of the groups proposing radical solutions know that substantial change could be a long time in coming, and could be a hard sell in what is likely to be a contentious legislative session.

"A fundamental rethinking is not going to be accomplished in a 60-day session," Davis said. "But nothing says they can't at least start pointing themselves in the right direction."

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