OLYMPIA — With the coronavirus effectively shuttering Washington’s economy and crushing state tax collections, Gov. Jay Inslee used his veto pen Friday to slash $445 million in spending from the state operating budget.
In a perhaps unprecedented move, Inslee made line-item vetoes to 147 programs as he signed the state supplemental operating budget, which tweaked Washington’s two-year spending blueprint.
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 vetoes eliminated spending prioritized by the governor and Democratic majorities in the House and Senate just a month ago, including more school counselors and money to try to reduce the effects of climate change.
“We made a decision of things that we believe could be deferred without injury to people in Washington state,” Inslee said. “We know that fairly shortly we’ll be back one way or another, and legislators will have a chance to deal with this issue.”
Approved last month by lawmakers, the supplemental budget would have adjusted the current, two-year spending plan to $53.5 billion. Since Washington must approve a budget that balances across four years, the spending cuts cover programs through 2023.
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.
Inslee vetoed another priority for the governor and Democrats by eliminating funding to create a state Office of Equity. That initiative came after voters last fall rejected a measure, Referendum 88, to reinstate affirmative action in state contracting, education and employment.
Also included in Friday’s cuts were a variety of small-dollar projects, like $250,000 to develop a business plan for a state-owned bank.
Spared from the vetoes were much of the new spending on health care and public safety, including funding to centralize Washington’s fragmented gun-purchase background check system by consolidating it under the Washington State Patrol.
Inslee also preserved the state’s new investments approved by lawmakers to boost funding for programs aimed at homelessness and affordable housing.
That means $160 million for affordable housing and homelessness will go forward, including grant money for local governments to pay for shelters and new dollars for Washington’s Housing Trust Fund.
Friday’s actions were an attempt to get ahead of a rapidly devolving economic situation, as businesses have been temporarily closed, sporting events and concerts canceled and people confined indoors to limit the spread of COVID-19.
More than 180,000 Washingtonians filed unemployment claims in the seven days leading up to March 31. The drop-off in economic activity hits state tax collections, which depend heavily on a sales tax.
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.”
That scenario would probably require cuts in the coming months or year to funding for schools, parks, prisons and social services.
Sen. John Braun, R-Centralia, said he supported Inslee’s cuts, but “I would have liked to see him do a little more.”
“We are headed to a very strong and fast recession,” said Braun, the Senate minority’s chief budget writer.
Braun — like many lawmakers in both parties — holds up the Great Recession as a cautionary budget tale.
Legislators’ budget cuts in response to that devastated the state’s mental-health system and some other programs that still haven’t fully recovered despite big funding increases in recent years.
Sen. Christine Rolfes, D-Bainbridge Island and chief Senate Democratic budget writer, said the Legislature likely would need to return in a special session before the end of this year to “make even harder decisions.”
Any decisions to cut existing spending could particularly hurt noneducational programs, which unlike K-12 school spending, are not considered constitutional requirements.
On the bright side, Washington since the Great Recession has stronger health-insurance coverage and a paid family-leave law, Rolfes said, both of which can help residents through the downturn.
Even as they finished their 2020 legislative work March 12, state lawmakers were preparing to reckon with the coronavirus. The supplemental budget they ultimately approved trimmed some spending and left a larger amount of budget reserves than legislators initially discussed.
Lawmakers also approved the use of $200 million from the state’s rainy day fund to respond to the quickly spreading outbreak.