Washington's widening deficit demands more union concessions
The state's latest revenue forecast puts Gov. Chris Gregoire and state lawmakers in a deeper bind with regard to balancing the Washington state budget. Everything must be on the table, including reopening state employee contracts.
THE new state revenue forecast — down another $698 million for the two years beginning July 1 — means that along with numerous other steps that must be taken, public employee contracts need to be negotiated again.
A negotiation was done late last year that cut pay by 3 percent, largely through furloughs, and raised the employee share of health insurance premiums from 12 percent to 15 percent. This deal, which would save $225 million in state general fund revenue over two years, has been approved by Gov. Chris Gregoire but not by the Legislature. Not yet, anyway.
This page said the concessions were not enough, and that Gregoire should have extracted more from state workers. Two months ago this was a debatable opinion. Now, nearly $700 million further in the hole, this conclusion is difficult to avoid.
The leader in the earlier negotiation was the governor. She signed the deal. What has to happen next — what has the best chance of working politically — is for Gregoire to declare the earlier contracts financially infeasible in light of the latest revenue projections. She should then organize House and Senate leaders, Sen. Lisa Brown, D-Spokane, and House Speaker Frank Chopp, D-Seattle, along with leaders of the money committees — Sen. Ed Murray, D-Seattle, and Rep. Ross Hunter, D-Medina, and go back to labor and ask for more salary and benefit concessions.
New taxes are not much of an option. On Nov. 2, state voters approved Initiative 1053, which requires a two-thirds vote of the Legislature or a vote of the people to raise taxes.
There is some talk of offering the people an increase in the sales tax, alongside a list of state programs that a temporary tax increase would pay for. But it has been a very long time since statewide voters have approved a tax increase.
There is additional talk in the House of borrowing money against the tobacco-settlement revenue, or against state lottery proceeds. Both are shortsighted ideas. Borrowing for current operations is dangerous. If it isn't illegal, it should be. These ideas have little support in the Senate, and Gregoire has said she would veto it — as well she should.
Only one alternative remains to labor concessions: even deeper cuts in state programs. Many cuts will have to happen anyway. The Basic Health Plan will have to be cut back or eliminated, as will the social program called Disability Lifeline. Add some money to be cut from class-size reduction in kindergarten through 4th grade, some money for public health clinics, money for medical care for the children of illegal immigrants and money to train certain members of the Service Employees International Union.
We are talking about more cuts than these. This is what the arithmetic demands. If the governor and House and Senate leaders go back to the unions, they could say no. They could say they have given enough in recently negotiated contracts, that the governor signed them and they are done. At that point, the Legislature would have another option: a bill by Sen. Joe Zarelli, R-Ridgefield, to reject the contracts including the concessions.
If the Legislature does this, the unions get their old contract, without concessions the state sorely needs. But it would last only one year, except health care which could last 18 months. After that, the Legislature could impose any deal it wants.
In a year and a half, the Legislature might be of a mind to do that. To avoid disaster requires leadership from the governor, and the leaders of the House and Senate and the budget writers. It also requires statesmanship and honesty from union leaders who need to get real with their members about the state's dire predicament.