YES, THE “L” WORD CREEPS INTO BUDGET DEFICIT DEBATE

“Budget crisis has state workers on edge” is how one newspaper headline put it.

With last week’s announcement of the projected $5.1 billion budget deficit for 2009-2011, politicians and pundits are talking about the need for budget cuts, including layoffs.

For the record, the Federation is urging the governor and legislators to avoid layoffs as harmful to any economic recovery -- “the worst anti-stimulus package you can have,” is how Federation Executive Director Greg Devereux has put it.

We believe talk of layoffs is premature—we should look at creative ways to scale back spending before making the economy worse by putting more workers on the unemployment rolls.

Many of you have already submitted creative budget ideas through our “Sensible Solutions 2009” web feature. Go to www.wfse.org and click on the “Sensible Solutions 2009” icon to send in your idea.

And to ease any uncertainty if any layoffs big or small materialize, we soon will have updated information on our website about what a layoff is and what your rights and protections are.

The governor says layoffs may be necessary, as a “last resort.”

“I don’t want to—it will be a last resort, but candidly I don’t see any other way to make the kind of cuts that we do to meet that kind of deficit,” Gov. Chris Gregoire told KOMO TV Nov. 20.

But it’s not all gloomy. Economic stimulus packages at the federal and state levels offer hope. President-elect Barack Obama today announced a massive federal economic stimulus package that will total anywhere from $500 billion to $700 billion. Here’s what the Associated Press reported today:

His economic team in place, Obama has tasked his aides with assembling an ambitious measure to not only swiftly pump money into the battered economy, but also create 2.5 million new jobs, send a tax cut to the poor and middle class, and make massive government investments in energy-saving and other technologies designed to pay for themselves in the long run.

And Federation members are getting out the word that resorting to layoffs and not funding your negotiated pay raises are the wrong way to go. Government should be used as a tool to prime the economy and help those harmed by the downturn get back on their feet. The deficit cannot be balanced on the backs of state employees.

Here’s a good synopsis of both sides of the debate that ran in the Spokane Spokesman-Review on Nov. 24 (following is an excerpt):

The largest state workers union, the Washington Federation of State Employees, argues against job cuts. It represents about 40,000 of the state's more than 100,000 employees.

"We believe, as some economists believe, that the worst thing to do during an economic downturn is to lay off, especially public employees," said Tim Welch, the union's spokesman. Demand for state services rises in tough times, he said. And in an economy reliant on consumer spending, he said, keeping people on the job is a good idea.

"The problem with state government is everyone doesn't look at it as comparable to Microsoft or Boeing," Welch said. "They look at it as something that needs to be cut. But a worker is a worker is a worker."

A similar argument is being made by Gregoire, who's one of many governors calling for an influx of federal dollars to pay for construction projects and create jobs.

"We don't want people to lose hope," Welch said. "Government can step up and give hope by creating jobs, and that will help us recover."

Others question whether cash-strapped taxpayers can continue to foot the bill.

Yes, many state workers provide important services, said Jason Mercier, with the conservative Washington Policy Center.

"But the taxpayers are not sending money to Olympia to provide employment," he said. "They're sending it to provide a service. And if that service is no longer necessary or funded, then that position should not be continued."

Union-negotiated cost-of-living increases for state workers, Mercier said, will cost $352 million more over the next two years. Similar increases for non-employees who are still paid by the state, such as home health care workers, add $169 million more.

Most would get a 2 percent cost-of-living increase in each of the next two years. But even before last week's news that the budget shortfall is far worse than expected, Gregoire was floating the idea that unions may be forced to choose between keeping those increases or keeping jobs.

Welch argues it's a false choice.

"We think these were modest pay raises that could be sustained in a down economic year," he said. "Two (percent) and two is not giving away the farm."

A far better idea, he said, would be to scrutinize the state's dozens of tax breaks, some dating back to the Great Depression. Some are clearly good ideas, he said, like the tax exemption on food. Other tax breaks, however, may be costing the state too much to continue.

"Folks have had a moratorium on paying that tax," he said. "And we think that in tough times, folks who've had those breaks should maybe pay their fair share."

Some lawmakers, notably Senate Majority Leader Lisa Brown, D-Spokane, make a similar argument.

"I think we will absolutely be looking at current tax breaks," she said.

For workers, the picture will get a little clearer in mid-December, when the governor will propose a budget for the next two years. Lawmakers have until next spring to come up with a final version.