Oregon Public Broadcasting

Wednesday, Washington State is likely to get another round of bad economic news. Revenue forecasters will deliver their latest predictions for tax collections.

Currently the state faces a $3.2 billion budget shortfall. After Wednesday that number could grow to $4 billion.

That means Democrats – who are in charge in Olympia – will have to scale back their ambitious goals. Olympia correspondent Austin Jenkins reports.

When economic times were good, Washington Democrats had grand plans. Insure all kids by 2010, fund all day kindergarten, enact a paid family leave program, provide an income tax rebate for working families.

These are what Governor Chris Gregoire and her fellow Democrats call progressive investments in Washington State’s future. But that was then and this is now.

Lisa Brown: “We’re gonna have to just focus on the basics.”

Lisa Brown of Spokane is Senate Majority Leader. Speaking by cell phone, she says her goal is to first do no harm to existing programs.

Even though the Governor has said no new taxes, Brown feels targeted tax increases should be on the table.

Lisa Brown: “You have to identify a revenue source that people can say ‘ya, I know how much that’s going to cost me and I’m willing to pay because this matters.’”

Brown says it’s possible any tax increase would go to a vote of the people. But targeted tax increases – if enacted – won’t be enough to balance the budget.

So what else will majority Democrats do? Perhaps close tax loopholes. They may also have to cut costs on the backs of some of their most reliable supporters – like state employees. Recently negotiated wage hikes for state workers are at risk. And there’s even talk of layoffs.

Greg Devereux: “I think right now layoffs are the worst anti-stimulus program you can actually have.”

Greg Devereux heads the Washington Federation of State Employees union. It and other public employee unions contributed heavily to Gregoire’s re-election effort this year.

There was even a union-funded independent ad campaign in support of her. Devereux is among union leaders who oppose job cuts or allowing labor contracts to go unfunded. But he remains confident that state employees have a friend in the governor’s office.

Greg Devereux: “What we think our support gets us is access to talk to her. We’ve had access over the past four years and it has not gotten us everything we wanted. We don’t think it will get us everything over the next four years. But it allows us to have the conversation.”

The conversation, yes. But the budget situation is bound to put Democrats in the awkward position of having to say no to their friends.

Besides unions, Gregoire and Democratic lawmakers can also expect to hear pleas from advocates for children, the elderly and other vulnerable populations. Those advocates will argue that during economic tough times government needs to step up and fund social service programs because the need is greater.

Watching from the sidelines, fiscal watchdogs can’t help but say: I told you so. They argue that majority Democrats put themselves in this pickle by over-spending during the good times.

Jason Mercier is a budget analyst for the Washington Policy Center, a conservative think tank.

Jason Mercier: “The crisis is promises have been made to lobbyists and special interests that aren’t going to be able to be delivered on, that’s what got certain people into office and they’re going to be feeling those pressures. And again a lot of this was avoidable if we had just adhered to sound budgeting principles and not extended the budget as fast as we did.”

But where some people see a crisis looming, Mercier sees opportunity. He says an economic downturn is a good time for government to cut waste, end programs that don’t work and bring spending more in line with revenues.

Mercier adds – even with the cuts that are sure to come – Washington State’s overall budget is still likely to increase – not decrease – in the coming two-year budget cycle.