Ferguson proposes nearly $4B in cuts to Washington state budget

Washington Gov. Bob Ferguson has a plan for about $7 billion in budget cuts, but he and Democrats in the Legislature have a ways to go before they solve a shortfall that may be more than double that size.

The governor presented $4 billion in new reductions on Thursday and said he supports another $3 billion in savings former Gov. Jay Inslee proposed in December. This scrub is Ferguson’s first step in addressing an operating budget deficit that Democratic lawmakers say is roughly $12 billion over the next four years. Ferguson pegged the number higher, at $15 billion.

That leaves a gap somewhere in the ballpark of $5 billion to $8 billion that would need to be closed with reductions, spending delays, or new tax collections. An updated state revenue forecast expected in March could either help or hurt that outlook.

Washington’s current two-year budget is around $70 billion.

Ferguson outlined his blueprint in a press conference Thursday. It includes one furlough day per month for most state workers and eliminating about 1,000 full-time employees through cutting vacant or new positions, attrition and other means.

To what degree state lawmakers will embrace his proposals remains to be seen.

Lead Democrats in the Legislature have already indicated that they believe new taxes or tax increases will be necessary.

Ferguson has avoided saying what tax proposals he might support. And on Thursday he said it’s still too soon for that conversation. He noted the upcoming revenue forecast could affect those discussions.

“Our energy’s been focused entirely on this process, which is time-consuming and a lot of decisions being made to get that $4 billion, to put it mildly,” he said.

He added: “We’re not going to tax our way out of this thing. Not going to happen.”

But the Senate’s lead budget writer, Sen. June Robinson, D-Everett, said cuts alone “will not allow us to sustain the services Washingtonians rely on.”

“Our job is to take a balanced approach — one that ensures critical services remain strong and communities have the support they need,” she said in a statement after the press conference. “To truly meet the needs of the people we serve, we must make thoughtful reductions and consider progressive revenue options that ensure fairness and long-term stability.”

The governor downplayed the potential for any clash between him and lawmakers at this point.

“They’re doing their own work, right, just like they know we’re doing our own,” he said. “I think it’s too soon to say whether we’re lined up or opposed, or there’s daylight or there’s not daylight.”

“They know the reductions that we’re proposing, the dollar amounts, and there’s a lot of time ahead of us to come together,” he added.

If the Legislature is to wrap up its session as scheduled on April 27, that time would amount to about 59 days.

Ferguson said he was giving staff a 24-hour break, and then going back to work to find more savings. He said the budget-combing process so far has made him “feel more encouraged” that the Legislature will be able to wrap up the budget on time.

The cuts

Public education and public safety agencies, like the Department of Corrections and Washington State Patrol, are immune from Ferguson’s cuts, according to the governor’s office. He also said investments in homelessness and housing assistance would be maintained.

And he said he planned to honor pay hikes in collective bargaining agreements with the state’s public employees. But $300 million in savings would come from the one-day-a-month furloughs for the next two years. Some employees, like state troopers and prison staff, would be exempt.

Ferguson’s plan triggered pushback from the Washington Federation of State Employees, which represents thousands of state workers.

“There is still time for our elected officials to do the right thing and reject harmful cuts, facility closures, and employee furloughs by asking the rich to pay their fair share,” the union’s president, Mike Yestramski, said in a statement.

The budget leader for the state Senate Republicans also expressed concern about the furloughs but for different reasons.

“This plan sends a message to taxpayers: public servants will receive higher pay using $4 billion more of your tax dollars, and in return, you will receive 12 fewer days of service from them each year for two years,” state Sen. Chris Gildon, R-Puyallup, said in a statement.

At the dawn of his administration, Ferguson asked most agencies to find 6% budget cuts in a scramble for $4 billion in savings. He requested 3% cuts from four-year universities. Agencies had to submit these proposals by Feb. 6.

The cuts he rolled out on Thursday slice across state government.

They include $90 million from temporarily closing unused wards at the Western State psychiatric hospital in Lakewood, $4 million from shuttering a unit at the Special Commitment Center on McNeil Island for people convicted of sex offenses, and another $4 million from ending a pandemic-era lease on an unused state Department of Health warehouse.

Ferguson is also calling for cutting agency spending by 50% on out-of-state travel, 25% on in-state travel and 10% on equipment and other purchases. In December, Inslee directed state agencies to freeze “most non-discretionary and non-essential” hiring, service contracts, purchasing and employee travel.

The Democratic governor has described further taxes to balance the budget as a last resort, and he has been especially dubious of the so-called wealth tax his predecessor recommended. Democrats in the Legislature have been much more open to new taxes.

In the first two months of the legislative session, Democrats have floated a variety of tax proposals, including taxes on cigarettes, storage units and gun and ammunition sales.

Lawmakers will also surely discuss the wealth tax on bonds, stocks and other assets. A version Inslee proposed — ​​a 1% tax on an individual’s wealth above $100 million — could generate about $10 billion in the next four years. But it’s widely expected the tax would face legal challenges and it would take time for the state to set it up.

A payroll tax on big businesses, similar to Seatte’s JumpStart tax, is another option Democrats have floated.

Gildon said Republicans would be happy to help the governor find more cuts to stave off new taxes.

Converging tracks

Republicans blame Democrats’ spending for the state’s financial woes and say new taxes or tax hikes are unnecessary. Democrats have controlled both chambers of the Legislature and the governor’s office for about seven years.

“It’s really just a masquerade of their reckless spending and financial irresponsibility,” state Rep. Chris Corry, R-Yakima, told reporters Tuesday. “There’s no other way to put it. We’ve been warning them for years that you cannot continue to spend more money than you take in.”

House Majority Leader Joe Fitzgibbon, D-West Seattle, said in a statement Thursday that many of the governor’s recommendations overlap with Democratic legislators’ ideas, and that lawmakers will consider other new savings Ferguson might propose.

He acknowledged that lawmakers and the governor have been working in parallel on budget issues. “I think we’re about at the point where those tracks converge,” he said Wednesday.

Senate Majority Leader Jamie Pedersen, D-Seattle, emphasized that legislative Democrats have, separate from the governor, been going through the budget line-by-line for three months. He reiterated that they are basing their work on the roughly $12 billion shortfall estimate.

Pedersen noted that pay raises for state employees are a significant chunk of what’s contributing to that total. But he also said higher compensation for state workers is necessary to attract and retain them at a time when living costs are up.

On Thursday, the governor’s office shared figures showing that recently negotiated collective bargaining agreements with state employees, and related pay increases for non-union workers, contribute around $3.7 billion to the state’s expected budget gap. The agreements include general pay hikes of 5% over two years.

Ferguson’s budget director, K.D. Chapman-See, explained that around $12 billion of the estimated shortfall is driven by “maintenance level” spending — what’s needed to keep existing programs and services going. Revenue isn’t growing fast enough to keep pace.

“It is really pretty across-the-board where we saw some pretty substantial increases,” she said.

Washington State Standard is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.