Governor trims $235 million from budget, citing “growing fiscal threat posed by the COVID-19 outbreak.”

Gov. Inslee Friday signed the supplemental budget after making $235 million in reductions from proposed spending. 

Facing a growing fiscal threat posed by the COVID-19 (coronavirus) outbreak, Gov. Jay Inslee used his line-item veto authority today to trim $235 million from the 2020 supplemental operating budget the Legislature approved last month. The vetoes will reduce spending another $210 million in the state’s next two-year budget.

“These are difficult and challenging times and we must make difficult and challenging choices. Under normal circumstances, I would not veto bills and budget items that are good policy and smart investments for the state. As everyone knows, these are not normal times,” Inslee said. “As we address the health crisis, we must also look ahead to ease as much fiscal pain as we can. It is all but certain that we will need to make adjustments to our next budget cycle and we must get started now.”

The governor’s office writes,

With revenue collections expected to fall sharply this year, Inslee’s budget staff scrubbed the budget for ways to reduce spending in the current budget and the next two-year budget. During that review, the governor and his budget staff consulted with legislative leaders and their staff.

In all, the governor vetoed 147 separate expenditure items today. The vetoes will reduce state spending by nearly $445 million (from the General Fund) over the next three years — $235 million in the current budget and $210 million in the next biennium.

The list of budget actions is here.

The Seattle Times reports,

But with the outbreak choking the economy, budget experts suggested the damage to tax collections could be worse than during the Great Recession. The darkening economic portrait might even require a special legislative session for further spending cuts before lawmakers are scheduled to return in January 2021.

The governor aimed his cuts squarely at new or expanded programs, and — for now — held off cuts to services Washingtonians rely upon.

…The single biggest cut in Inslee’s veto nixed $116 million in new money through 2023 for school counselors in high-poverty school districts.

That measure — which had been championed by Inslee and state Democrats — would have added 370 new counselors around Washington, according to the state Office of Financial Management (OFM).

The governor also rejected $35 million through 2023 intended to train K-12 paraeducators, and $50 million that had been set aside for state agencies to pursue projects to mitigate climate change.

ST reporter Joseph O’Sullivan further writes,

In a statement, Office of Financial Management (OFM) Director David Schumacher said it’s too early to know how much the slowdown will hit the economy and tax collections.

“But, at this point, we expect projected revenues for the next few years to fall by billions of dollars,” Schumacher said in prepared remarks. “The decline will likely be at least as bad as, if not worse than, what we saw during the Great Recession.”
The Associated Press reports,

Rep. Timm Ormsby and Sen. Christine Rolfes, the Democratic budget writers, said in a joint statement that they supported Inslee’s budget reductions, writing that they were “necessary to help address the sudden and dramatic change to our state’s fiscal situation and to maintain focus on the state’s response to the COVID-19 outbreak.”

“The health and safety of all Washingtonians is paramount, and these reductions will help our state remain nimble as we face declining revenues,” they wrote.

Republican Rep. Drew Stokesbary also commended the governor for the vetoes, but encouraged the governor to work with state agencies to begin reducing current spending across state government “to ensure the state has adequate fiscal resources to continue providing critical services to those who depend on them.”

And from the Northwest News Network,

Braun, the Republican budget writer, said he appreciated Inslee’s “modest” budget vetoes, but added that they didn’t go far enough.

“I would have liked to see him do more because I think we’re going to have a very large budget challenge on our hands and reducing future spending today is going to be much, much easier than cutting services either in a special session or a future session,” Braun said.

The NNN adds that the fiscal impact of the pandemic remains uncertain.

Better estimates may come on April 30 when the state’s revenue forecaster, Steve Lerch, is expected to provide an unofficial forecast at a meeting of the State Revenue Council. The next official forecast is scheduled for mid-June.

What’s clear is Inslee’s initial paring back of spending is just the start of what may ultimately become dramatic reductions in state spending. Unlike Congress, state lawmakers are required to write balanced budgets and are not allowed to engage in deficit spending. In Washington, the bar is even higher with a requirement that the two-year budget balance over four years.

It’s generally accepted that lawmakers will be back in a special session, possibly in the fall, to make further adjustments in the two-year spending plan.