Steeper dive in WA state revenues projected, workers furloughed

New numbers released this week show Washington state is facing a reduction in projected state revenues of about $8.8 billion over the next three years due to the economic impacts of the COVID-19 pandemic.

The number is higher than the $7 billion predicted during an unofficial forecast that was prepared at the end of April.

Lawmakers — who are expected to be called into a special session by Gov. Jay Inslee sometime this summer — must first contend with the impact on the current approximately $53 billion two-year budget that ends mid-2021. That shortfall — nearly $4.5 billion — means that even if lawmakers use all of more than $3 billion in total projected reserves, they will still have a significant amount to balance through either cuts or new revenue.

The projection for the next two-year budget that lawmakers are tasked with writing at the start of the next regular legislative session in January is more than $4.3 billion in projected reduction in revenues from July 2021 through mid-2023.

Last month, Inslee issued a directive freezing most hiring and signing of personal services contracts and purchasing of equipment, and the state’s budget office sent a letter to state agencies telling them to find ways to cut 15 percent from their current budgets. Agencies started submitting their budget proposals with suggested cuts this month.

On Wednesday, Inslee ordered cabinet agencies to cancel a scheduled 3% raise for agency directors and exempt employees who earn more than $53,000 a year, affecting nearly 5,600 employees. Union-represented and non-represented classified employees will still get the scheduled raise on July 1.

Inslee also announced that starting no later than June 28, more than 40,000 state employees will be required to take one furlough day per week through July 25, and then will be required to take one furlough day per month through at least the fall.

Inslee’s office said that the canceled pay raises and furloughs are expected to save about $55 million over the next year. Inslee urged other agencies not under his authority — including the Legislature, higher education and statewide elected officials — to adopt similar measures, which his office said would save an additional $91 million.

The Legislature has already taken action, with the Senate Facilities and Operations Committee on Tuesday adopting several reductions, including a 12-month suspension of a 2.5% increase for all employees. The House has also frozen salaries effective July 1st. (AP)

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