The latest round of cuts proposed by Gov. Chris Gregoire would increase public-school class sizes, eliminate subsidized health care for the working poor and release hundreds of inmates early.

OLYMPIA — For the fourth year in a row, Gov. Chris Gregoire on Thursday outlined more than $1.5 billion in state cuts to health care, social services, prisons and education.

The latest round would increase public-school class sizes, eliminate subsidized health care for the working poor and release hundreds of inmates early.

“These are pretty much the very shocking things we’ve been trying to avoid for the last three years,” Senate Ways and Means Chairman Ed Murray, D-Seattle, said of the governor’s proposal.

“There are no choices left,” he added.

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The Legislature has already trimmed billions in spending over the past several years due to the struggling economy.

If Gregoire’s recommendations are enacted, they’d roll back spending roughly to where it was in the 2005-07 budget.

Yet the governor isn’t about to promise the worst is over.

“Are we done, are we at the bottom?” she said. “If Congress messes up royal again, no. If the debt crisis blows up in Europe, no. We’re at that critical point now where we could pull out of this dramatically, or we could slip into another recession.”

The Legislature is to convene in a special session Nov. 28 to start rewriting the $32.2 billion two-year budget adopted in May. It’s now about $2 billion in the hole.

The governor has proposed more than 160 individual cuts ranging from $100,000 to more than $100 million. All told, they add up to $1.65 billion.

Gregoire also recommends delaying a state payment to public schools by one day, pushing $330 million of costs into the next budget cycle. It’s an accounting trick that doesn’t actually reduce spending.

The single largest cut is a $166 million hit to higher education — a 15 percent drop in state funding for public colleges and universities.

Gregoire also proposed reducing state levy-equalization payments to property-poor school districts by 50 percent overall, with the poorest districts getting more help than those better off. She also suggested increasing class size by two students in grades 4-12, saving $137 million.

Local governments would take a hit, with the state no longer sharing liquor profits and excise taxes with cities and counties. That would cost the city of Seattle $7.2 million a year and King County $1.85 million, city and county officials said.

End of Basic Health

The state’s Basic Health Plan would close, ending state-subsidized insurance for about 35,000 low-income people. Offenders considered at low or moderate risk to re-offend would be released from prison 150 days early.

The governor noted the cuts unveiled Thursday are just recommendations, and that she’ll talk to the communities and groups that would be affected before releasing a full budget proposal after the Nov. 17 revenue forecast.

She said she has no choice but to cut deeper.

“I have to be honest with myself and the people of the state of Washington,” she said. “While my heart is there, my pocketbook is empty.”

In Seattle, school officials had braced for reductions but were surprised at Gregoire’s proposals, which would cut $365 million in all from K-12 schools.

Seattle School Board President Steve Sundquist called the suggestions “devastating.”

“We’ve made cuts now three years running,” he said. “It’s getting increasingly hard to keep those cuts from impacting our students, so I’m extraordinarily worried.”

In a statement, Interim Superintendent Susan Enfield noted that class size in Seattle Public Schools is controlled by a contract with the teachers union, so the district would have to maintain current class sizes without support from the state.

She also said the governor’s proposal would disproportionately hurt low-income students and increase the district’s dropout rate.

Randy Dorn, the superintendent of the Office of Public Instruction, released a particularly blunt statement about Gregoire’s suggestions.

“I understand why the governor must propose cuts and that this is just the beginning of the conversation, but these cuts can’t happen,” he said.

Western Washington University President Bruce Shepard called the proposed 15 percent cut to higher education “a disaster for Washington’s economy and a disaster for Washington’s families and children.”

Gregoire also would suspend the state’s work-study program, saving $8 million. That program was cut in half last year.

The state’s six four-year colleges and universities have already seen their state funding slashed by about half over the past three years.

“The reality is, a cut of this nature is going to compromise the quality of what we do,” said Washington State University President Elson Floyd. He said it would lead to larger class sizes and fewer staff members.

“I am going to put up a huge fight not to have this budget implemented as recommended,” he said.

Many groups are urging lawmakers to ask voters to increase taxes or eliminate tax exemptions to avoid the deepest cuts.

Some Democrats, including Murray, have talked about doing just that.

“Personally I believe it demonstrates we ought to give voters an option,” Murray said, but added, “That is not at all, at this point, the position of my caucus. I think it will be a struggle to find the votes in the Senate.”

Gregoire on Thursday did not rule out seeking more tax money, but said she hasn’t looked at the options yet and isn’t ready to discuss it.

“This is what the cuts look like,” she said. “We have to ask ourselves now: Do we want to look at alternatives of revenue — what might they be, and do we want to go there?”

Sen. Joe Zarelli, R-Ridgefield, the ranking Republican on the Senate Ways and Means Committee, said Senate Republicans remain opposed to any tax increase. “To go out and look for how we can raise taxes temporarily or permanently is not a solution to our problem,” he said.

Andrew Garber: 360-236-8266 or