Reports indicate that Governor Gregoire heard the message from Tuesday’s election – no on taxes- and is now preparing the state for an all-cuts budget next session.

The 2011-13 budget shortfall ($4.8 billion), which increased slightly with the repeal of the soda and candy tax on Tuesday, will need to be addressed when legislators arrive in Olympia for the 2011 session. In addition, it is assumed that legislators can expect little help from the feds on issues such as extention of employment benefits to help ease the burden here at home.

There is speculation that a December special session may be in the works. Governor Gregoire remained open to the idea of a special sesion if lawmakers can agree on quick passage of her supplementa budget. Gregoire expects to share that proposal with lawmakers soon after the November 18 revenue forecast.

The November forecast will be the basis by which Governor Gregoire rewrites the current two-year budget to respond to the $520 million shortfall in the current biennium and drafts a new budget for the 2011-13 biennium.

With a potential for increases in caseloads in November, the Governor predicts she will either need to order additional across-the-board cuts in December or call a special session.