OLYMPIA – Gov. Jay Inslee said Wednesday he’s canceling raises for more than 5,500 state workers and imposing unpaid furlough days, as Washington officials grapple with a looming budget shortfall brought on by the coronavirus pandemic.
Inslee’s announcement came as an official state forecast Wednesday projected a roughly $8.8 billion state-budget shortfall through 2023 — worse than previously expected.
Early estimates had projected a $7 billion shortfall in the state operating budget — which funds schools, parks, prisons and social services — through 2023. The hit is due to lower state tax collections, as businesses and society largely shut down amid the COVID-19 pandemic and have since early May been gradually reopening.
The projections by the Washington Economic and Revenue Forecast Council now predict a $4.5 billion budget shortfall for the current, two-year $53.3 billion state operating budget.
Another $4.3 billion shortfall is forecast for the 2021-23 budget, which lawmakers will draft when the Legislature returns in January.
The numbers only heighten difficult choices already facing Inslee and state lawmakers as they prepare for a special legislative session to begin refashioning the budget ahead of next year’s work.
In a news conference Wednesday on the budget shortfall and the state’s coronavirus response, Inslee said the canceled pay raises and furloughs are just the start of difficult budget decisions.
“We know that we have many tough decisions ahead of us as a state, as a result of our revenues falling off a cliff,” he said.
The governor and Democratic lawmakers said they are still hoping for Congress to provide economic relief for states sometime soon, which could ease the strain.
Democrats have warned against an “all cuts” budget that slashes spending on environmental and social-services programs, like Washington’s struggling mental-health system.
“As we continue preparation for an eventual special session and the 2021 regular session, we must take a balanced approach that includes budget savings and the use of resources like the budget stabilization account and, potentially, new revenue,” Senate Majority Leader Andy Billig said Wednesday in a statement.
But Republican lawmakers point to businesses and workers already struggling during the pandemic, and say the state should avoid raising any new taxes. And many GOP lawmakers — who are in the minority in both the state House and Senate — remain frustrated that they haven’t already been called back into a session.
“The Legislature has the ultimate control over the budget, yet Governor Inslee has chosen to keep us from stepping in – even though the executive and legislative branches are co-equal under our constitution, and we directly represent the people who have endured his response to the pandemic,” Senate Minority Leader Mark Schoesler, R-Ritzville, said Wednesday in a statement.
Inslee on Wednesday morning announced that government agencies under his authority would cancel a 3% scheduled wage increase for the state’s higher-paid nonunion employees.
That move stops pay raises for about 5,600 state workers. It includes directors of state agencies, as well as other management and some other nonunion employees earning more than $53,000 per year.
Meanwhile, more than 40,000 state employees will begin taking unpaid furlough days, starting no later than June 28. Those workers must take one unpaid day per week through July 25, according to the statement. After July, state workers must take one unpaid day per month through at least the fall.
“These are very difficult decisions, but they are necessary to address the financial shortfall that we are facing,” Inslee said in prepared remarks, adding later: “In this current financial situation, everyone needs to make sacrifices and we know this will not be easy. I know that our state will come out of these difficult times stronger than ever.”
Early estimates show the canceled raises and furlough days will save about $55 million across the next year.
The state’s union workers and non-represented classified employees will get their pay raises as scheduled on July 1, according to Inslee’s statement.
Inslee meanwhile urged state agencies that are not under his authority — such as the Legislature, the courts, higher-education institutions and statewide elected officials — to make similar moves. If they did, Washington would save about $91 million more, he said.