Dems scale back budget proposal

OLYMPIA — House Democrats on Wednesday unveiled their new spend-and-save budget plan for Washington, responding to a revenue nose-dive by scaling back an earlier goal of saving $1 billion.

The House plan would boost the current two-year $33 billion budget by a net of about $287 million and leave $750 million in savings to cope with future economic woes.

Economists say the U.S. is in a mild recession, and the Senate budget panel says the state faces a deficit of $937 million in the upcoming two-year fiscal period.

Gov. Christine Gregoire and the Senate budget chairwoman, Margarita Prentice, D-Renton, quickly lobbied for a higher surplus figure. "While the state's economy remains strong, it is not immune to slowing national economic trends," the governor said.

Neither she nor Prentice offered a specific suggestion, but Gregoire talked about preserving "a healthy savings."

House budget leaders rolled out the Legislature's first drafts of new state government operating, transportation and construction budgets. Those drafts offered the first concrete reaction to the recent state Revenue Forecast Council announcement that state revenue is expected to drop by $423 million and to a new calculation that added nearly $100 million in expenses for teacher salaries and caseload changes.

Lawmakers are fine-tuning the second year of the state budget.

Gregoire sent up her own $234 million proposal in December, with a $1.2 billion reserve, and leaders in both chambers had agreed to a goal of saving at least $1 billion.

House budget leaders said the state economy remains strong and that the $750 million in savings should be adequate.

Under the House plan, spending is up about $471 million for a variety of "must do" items and optional additions by the Democrats. The plan also takes about $185 million in cost savings and reductions, for net spending of about $287 million.

The proposal includes more money for education, most notably for teacher salaries.

The plan also includes more money for Medicaid, foster care, family planning, housing, lawsuits against the state, long-term care, "green-collar" jobs and other environmental and climate-change programs, and public safety.

The main savings is from $116 million in lower-than-budgeted health benefits for state employees and clients.

Republicans continued to criticize the Democrats' spending, saying their 33 percent budget increase over the past four years, coupled with new spending and a shrinking reserve account, will set up the state for big deficits in the upcoming biennium.

The Democrats' new transportation budget trims about $155 million in spending for the next year and deals with a $1.8 billion deficit projected for the 16-year highway construction plan.

House Transportation Chairwoman Judy Clibborn, D-Mercer Island, said the Legislature isn't dropping any of the 430-plus transportation projects that are tied to the two recent gas-tax increases, but she said some will be delayed.

The budget also includes $85 million for three new small ferries to replace the four Steel Electric-class boats that were removed from service in November.

Ferry fares are frozen for another year.

The House is expected to vote on the budget Friday.

The Senate, also controlled by Democrats, expects to roll out an alternative budget on Tuesday.