With the state facing a projected $3 billion shortfall next year, Gov. Chris Gregoire said she wants an advisory panel to consider novel approaches like privatizing the state ferry system or selling naming rights to state buildings.

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OLYMPIA — It’s time, the governor says, to start asking tough questions, like should the state sell naming rights to public buildings to bring in money?

Should the Legislature privatize the state ferry system? Or transfer state parks over to local governments?

With the state facing a projected $3 billion shortfall next year, Gov. Chris Gregoire said those are the kinds of things she wants state programs to consider. Although the governor said she’s not specifically advocating those moves.

Gregoire on Thursday outlined a series of eight questions she’s asking state agencies to answer, such as whether there are more cost-effective ways of doing things, or should they be done at all.

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She’s also created a panel of more than 30 people, including business, labor and political leaders, to help hold four public hearings across the state and advise her on the budget.

This is the third legislative session in a row in which the state has faced a multibillion-dollar budget shortfall. Each time, lawmakers have stressed the need to streamline state government and have taken only baby steps.

Rep. Kelli Linville, D-Bellingham, chairwoman of the House Ways and Means Committee, pushed to do things such as privatize state liquor stores earlier this year but got nowhere.

“You come in saying there’s going to be blah, blah, blah. And you end up with what you can get 50 votes for,” she said at the time. “That’s the truth.”

But Linville now thinks there’s a chance to overhaul state government. It’s finally sunk in, she said, that the Legislature can’t simply patch up the budget and hope the economy will get better. “What’s different,” she said, “is it’s not getting any better.”

In fact, the budget shortfall could get worse.

A recent revenue forecast projects the state will take in $200 million less than was expected in the budget that runs through June 2011. The drop could be handled by reserves — assuming Congress approves several hundred million dollars in federal aid the state is counting on.

But that federal aid now appears unlikely. Gregoire said if Congress doesn’t act before it takes a recess in August, she may have to either call a special session of the Legislature to deal with the shortfall, or make across-the-board cuts herself.

Gregoire said she’s confident the Legislature will pay attention to her cost-saving proposals when it meets in January to start writing the next two-year budget.

“Frankly, I don’t think the Legislature has any choice,” she said.

Rep. Gary Alexander, R-Olympia, the ranking Republican on the House Ways and Means Committee, supports the governor’s approach.

“It’s a wait and see whether the commitment will be there,” said Alexander, who’s serving on the governor’s budget panel. “She seems to be more open about addressing the question of what government should be doing.”

Andrew Garber: 360-236-8266 or agarber@seattletimes.com

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