Washington Governor Gregoire Offers Plan to Bridge $2 Billion Budget Gap

Washington Governor Christine Gregoire released a plan to bridge the state’s $2 billion budget gap that would cut university funding and medical benefits for the disabled, as revenue trails initial forecasts.

Gregoire, 64, is asking the Legislature to consider her proposal for what she called “truly devastating” cuts or offer alternatives.

“I have to confront the reality,” Gregoire, a Democrat, said today at a press briefing in Olympia, Washington’s capital. “The people of our state are not spending. Businesses are not hiring. We need to cut $2 billion more.”

The reductions from the two-year, $32 billion general-fund budget follow $10 billion that Gregoire has said she has cut from state spending in the past three years, including about $4.6 billion in the current plan, which took effect in July. The proposed changes are in response to last month’s projected $1.4 billion decline in estimated revenue during the biennium.

A revised revenue forecast will be released next month, according to Ralph Thomas, a spokesman for the state financial management office.

“It’s quite possible it will go down some more,” Thomas said. “We just don’t know by how much.”

The current budget and other legislation consolidated several agencies, reduced state employee and teacher pay and cut programs in almost every department, according to the financial management office.

“We’re now through the muscle and into the bone of services our people need and demand,” Gregoire said at the briefing.

Her plan would cut medical services to 21,000 people in the state’s Disability Lifeline program, which provides cash and benefits to people who can’t work. She proposed reducing funding for colleges and universities by 15 percent and eliminating the Basic Health Plan, which offers subsidized care to 35,000 low- income residents.

To contact the reporter on this story: Alison Vekshin in San Francisco at avekshin@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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