Over 3 budget years from 2009 to 2011, Washington State has grappled with a $12 billion shortfall between the projected need for public services and state revenues – which have plunged because of the recession. Federal stimulus money and the rainy day fund made up some of the difference, and the state raised $918 million with tighter standards and new taxes. Still, Washington’s legislature has cut $5.2 billion, impacting schools, childcare centers, health clinics, assisted living facilities, families, and individuals across the state.
Despite continued population growth, inflation, and increased needs caused by the recession, Washington’s 2-year General Fund budget for 2009-11 is barely above the 2005-07 level and $2.7 billion below the amount originally budgeted for 2007-09 – an 8% drop.
More budget cuts are being made. Recovery from the national recession slowed over the summer. As a result, state tax receipts have continued to fall below expectations. Revenues for the 2009-11 budget, which runs through June 2011, now are projected to be $770 million less than expected last spring. The state will have to cut – or raise – an additional $516 million in the current budget to prevent a deficit. Governor Gregoire has asked all state agencies to prepare to implement further across-the-board cuts of 6.3% October 1, 2010.
The 2011-13 budget which the legislature will adopt when it returns to Olympia in January 2011 is expected to have a hole of $4.5 billion in addition to all of the reductions already made.