This morning the Washington Legislature convened the second special session of 2010. Facing a $1.2 billion budget shortfall in the current fiscal year, the Governor and the Legislature convened the special session, hopefully a single-day session, to reduce the current shortfall by hundreds of millions of dollars.
Thursday the Governor along with the four legislative caucuses reached a deal to be reached without amendments to reduce the current shortfall by $590 million. The deal includes cuts to state programs and services, fund shifts, and additional revenue through tax compliance efforts. In addition, the Governor will implement an additional reduction of $200 million through across-the-board cutts. This brings the total budget reductions to be achieved to $790 million.
Highlights
K-12 & Higher Education Spending Reductions – $311.4 million
- Use of federal education dollars (Education Jobs Act) – $208 million
- Higher education across-the-board cuts – $51 million
- Elimination of K-4 enhancement (effective February 1) – $39 million
- Reduction of education reform programs – $9.2 million
- Reduction of OSPI administration and program funding – $3.7 million
Human Services Spending Reductions – $154.1 million
- Department of Corrections reductions – $46 million
- Basic Health Plan Cap Trend – $27 million
- FQHC Reimbursement Method Change – $20.3 millin
- Reduction of Disability Lifeline Unemployable cash grant – $12.3 millin
- Children’s Administration reductions – $11 million
- Additional CHIPRA Performance Bonus – $10 million
- Extension of temporary layoff to all staff (DSHS) – $9 million
- Elimination of non-emergency adult dental – $7 million
- Extension of temporary layoff- adds two days (DSHS) – $4 million
- Closure of McNeil Island – $3 million
- Elmination of child support pass-through (Economic Services) – $1 million
- Reduction of diversion cash assistance (TANF) – $900,000
Other Spending Changes – $24 .8 million
- Reductions of separately elected officials, OFM & judical – $11 million
- Reductions Department of Natural Resources – $17 million
Fund Transfers – $54 million
- State Toxics Control Account – $20 million
- Disaster Response Account – $15 million
- State Treasurer’s Service Account – $10 million
- Financial Services Regulation Account – $5 million
- Tobacco Prevention and Control Account – $3 million
- Nisqually Earthquake Account – $1 million
Both the House and Senate Ways & Means Committees met this morning. The House Ways & Means Committee held a public hearing and took action on three bills:
- House Bill 3223: Allows the Department of Revenue to waive penalties for companies that owe back taxes and pay up promptly. The measure is estimated to raise over $44 million over six months.
- House Bill 3224: Suspends child support pass-through payments to families receiving Temporary Assistance for Needy Families benefits.
- House Bill 3225: Reductions to the 2009-2011 operating budget
The Senate Ways & Means Committee held a public hearing and took action on two bills:
- Senate Bill 6892: Allows the Department of Revenue to waive penalties for companies that owe back taxes and pay up promptly. The measure is estimated to raise over $44 million over six months.
- Senate Bill 6893: Suspends child support pass-through payments to families receiving Temporary Assistance for Needy Families benefits.
Both chambers are expected to take further action on the bills passed out of committee on the House and Senate floor early this afternoon.
After today’s actions, the Governor and the Legislature will still need to resolve a remaining budget shortfall of approximately $540 million when the 2011 legislative session convenes in January.