GOVERNOR TO UNVEIL BUDGET DEC. 18

Gov. Chris Gregoire unveils her 2009-2011 budget Dec. 18, according to The Olympian.

She is required by law to propose a balanced budget. That’s why she said her plan will be brutal.

But you might be interested to know what the media is saying. Passing a balanced budget is not a legal or constitutional requirement. So the governor under the state Budget and Accounting Act must “propose” a balance budget. But neither the Legislature nor the governor must approve one. This fiscal version of “Mythbusters” is leading some to call for borrowing through bonding to help pay off the projected $5.1 billion deficit.

That’s because many economists and historians say slashing budgets and laying off employees is the absolute wrong thing to do in the kind of severe recession we’re in. Even President Elect Barack Obama has said economic recovery trumps the deficit.

History also shows that the slash and burn method of dealing with a recession and deficits is disastrous. Professor James N. Gregory, director of the Harry Bridges Center for Labor Studies at the University of Washington, wrote in the Seattle Times Dec. 5 that state government should step in with spending to maintain services and keep jobs.

During the Great Depression in 1931, then-Gov. Roland Hartley vetoed economic stimulus measures in favor of a balanced budget and no revenue increases.

Writes Gregory:

That year, economic activity declined more sharply in Seattle than in cities that practiced countercyclical spending, such as San Francisco. By late 1931, unemployment in Seattle was close to 25 percent and thousands were hungry and homeless. A giant encampment had begun to spread across the empty lots near Alaskan Way. Residents named it Hooverville, after the president they blamed for the crisis.

Gov. Christine Gregoire and the Legislature are on track to repeat the mistakes of 1931. Committed to balancing the state budget as required by current law, the governor has already ordered state agencies to cut more than $590 million and is proposing to slash another $5 billion to $6 billion in the next budget cycle.

That will destroy as many as 20,000 jobs, adding to the state's escalating unemployment problem. It will mean drastic cutbacks in health and social services just when they are most needed. It will mean that college applicants will be turned away, hurting young people and further burdening the job market. It will damage, perhaps permanently, our universities and other institutions vital to the future of Washington. This is not what we need at this perilous juncture.

Note that Gregory wrote this piece still using the now busted myth that Washington law requires a balanced budget.

Still, he says, the governor and Legislature must show flexibility in 2009:

The governor and the Legislature must find a way to keep from escalating the job losses. They must find a way to avoid massive layoffs of state workers. They must avoid devastating cuts to higher education and needed programs and services. They must find a way to act with common sense in the next legislative session. To do otherwise would be inexcusable.

Meanwhile, the governor is meeting with several different groups, including labor, to try to find innovative solutions to the economic downturn. One keystone of that is a federal economic stimulus package.

You can help. We have a link on our website so you can send a message urging our two U.S. senators and your U.S. House member to support a federal stimulus package that helps Washington state that:

• Raises FMAP (Federal Medical Assistant Percentage) without strings, allowing governors to determine how best to use them.
  
  
• Includes temporary flexible block grant assistance to allow state and local governments to provide vital public services.
  
  
• Includes S-SHIP dollars to continue children’s healthcare.
  
  
• Increases food stamp funding.
  
  
• Increases unemployment funds and extend them for two years.
  
  
• Blocks earmarks—funds that arrive early produce the best results.

Go to www.wfse.org and look for the “Invest in Washington” link in the “Action Center.”

Also, we have a letter-writing campaign at the grassroots level to generate as many letters as possible in support of a federal economic stimulus package by the Jan. 12 start of the Legislature. Watch for them. And keep up-to-date on other developments at www.wfse.org.