Gregoire: Stimulus will not stop budget cuts

By Evan Rohar

The federal stimulus package (which the House passed and the Senate is now considering and adding to - about $900 billion in total spending so far) won't produce the results many in Washington State and across the country have hoped for - alleviating the draconian cuts to the State budgets. The best we can hope for is a softening of the blow, tantamount to a pillow strapped to the head of a person about to withstand a an assailant with a sledgehammer. From the PI:

Washington's share of a federal economic stimulus package - estimated at perhaps $4 billion - will have plenty of strings attached, and won't be the economic cure-all that some people are hoping for, Gov. Chris Gregoire said Tuesday.

"I think the expectations we heard out there were, everybody was ready to spend boatloads of money - 'I'm going to build this, and I'm going to build that,'" Gregoire said in an interview with The Associated Press.

But "that's not how the money's coming," Gregoire said. "There's not going to be a whole lot of discretion out there for spending the money."

Gregoire's special assistant for the stimulus package, Dick Thompson, said he is estimating Washington's potential share of the federal package in a range from $3.5 billion to $4.5 billion. That estimate is fluid, Thompson noted, because the U.S. Senate is still working on its version of the bill, and the Senate and U.S. House have to negotiate a final package.

Once it arrives, the stimulus money will be channeled largely through a long list of federal programs with different rules and deadlines attached, Gregoire said.

The spending is also being advertised as "use it or lose it," meaning states have to move the dollars out the door, not put them in bank accounts. And in some cases, states won't be allowed to substitute new federal spending for the state's portion of shared program costs. That means a flood of federal money won't necessarily free up gobs of state cash for other uses, as some officials have hoped. (Wash. gov: Stimulus won't be a cure-all, 1/27/09)

So should we call the Governor Chris Hoover or Herbert Gregoire? During the last economic downturn of this magnitude (which occurred in the 1930s), State governors across the country decreased spending on all sorts of programs, including public works and education, in order to balance their budgets. In our current situation, putting more people out of work is insane; an excerpt from an article entitled "A New New Deal Under Obama?" illustrates why:

Federal spending on public works, which has become almost synonymous with the New Deal in popular culture, expanded nearly every year from 1929 to 1938 (see table 1). Yet, total government spending on public works did not regain its 1929 level until 1936, due to drops in state and local public works spending that undercut the federal increases. At first, state and local governments had responded to the deep slump by increasing their public works outlays. However, within a couple of years their resources were largely exhausted and their spending on public works dropped below that of 1929. By 1936, state and local public works expenditures were less than half their 1929 level. (Monthly Review, 12/21/08)

The governors should go to the Obama administration with this telling data and demand more money so they do not have to balance their budgets on the backs of students and workers. We have often pointed out on this blog the contradictions of creating jobs in one sector of the economy while at the same time destroying jobs in another. The argument over federal and state/local spending is a contradiction of a different kind, but it makes about as much sense. Why destroy state and local jobs to make way for federal jobs? This is a wasteful way to do things in a time when we need to focus our resources as efficiently as possible.We ask: why does a common sense approach to this economic downturn have to come from a lowly student group? Whatever the answer, we must organize to challenge the current pretzel logic of Gregoire and the federal government.

Gregoire's Budget

By Evan Rohar

She said it was going to be ugly and it is. Given the speculation, some aspects are surprising. The main thing to remember while reading about Gregoire's budget proposal, however, is that it does not cover the further losses to revenue that are expected in the February forecast. There are $3.5 billion in cuts so far, but this is just a first shot. While K-12 and higher education were not hit as hard as expected, health and human services were cut to the bone. Each of the following selections is from the Seattle Times article on the budget proposal. We'll take them on point by point ("Public safety" is left out for now due to its controversial nature. However, no matter what its fate, workers in correctional facilities, etc. still need good, living-wage jobs).

"Health and human services: $1.4 billion

Reductions include cutting $500 million from state programs that provide health care for children, the poor and the disabled. The cuts could eliminate health-care services for 46,000 people.

"Other cuts include eliminating the General Assistance-Unemployable program, which provides a temporary safety net for people unable to work because of mental or physical disabilities. That would save more than $160 million.

"In addition, the governor proposes a 5 percent cut in the amount of money the state provides to nursing homes to take care of Medicaid patients, saving the state $46 million." ("Gregoire releases slimmed-down state budget," 12/18/08)

This was by far the most surprising element of the budget cuts and the most draconian. In the coming period, the ranks of the working poor will swell, creating greater demand for state health plans and services. The most troubling thing about this is that it hits hardest those who are most disenfranchised. Cutting health services to children, the elderly, and the "disabled" should be completely out of the question even in troubled economic times.

"Pay raises: $682 million

"The governor would eliminate proposed pay increases for state workers and teachers. The state employee pay raises were negotiated between the governor and state worker unions, but haven't yet been approved by the Legislature. Initiative 732, approved by voters in 2000, requires annual salary increases for teachers to be pegged to inflation. However, the Legislature can suspend the initiative with a simple majority vote.

"However the state would provide the additional money needed to continue paying 88 percent of the health-insurance premiums for state employees, as required by their contracts." (Ibid.)

State jobs are some of the few living-wage jobs left in Washington (see the Seattle PI article, "New jobs offer less than living wage"). Reducing the number of good-paying jobs by freezing the wages of state workers makes little sense in this economic environment. Furthermore, the governor already negotiated wages and benefits for state workers during collective bargaining with their unions. The legislature should not renege on contracts that were negotiated in good faith.

Initiative 732 should not be suspended. Teachers are already underpaid for the amount of work they do and the cost of the education required to become certified. The Seattle Times seems to suggest in the last sentence above that state workers shouldn't have good health insurance. All workers deserve good health insurance.

"Public schools: $610 million

"Cuts include a 33 percent reduction in levy equalization payments to public schools. This money helps support about 200 school districts that have small property-tax bases to rely on. It would save the state $125 million.

"In addition, the governor would save $178 million with a 24 percent cut in funding for Initiative I-728, which was approved by voters in 2000 to reduce class sizes. Many schools use the money to hire more staff and pay for training and other programs." (Ibid.)

The levy system is already an inequitable way of dividing up money for public schools. Decreasing money for levy equalization will put currently under-funded rural and inner-city schools into dire straits. Also, with schools and classes already overcrowded, laying off teachers whose positions were funded by I-728 must be taken off the table. Neither teachers nor students can afford a reduction in State funding for public K-12 education.

"Higher education: both cuts and tuition increases

"The governor would cut $216 million — 13 percent — from the budget for four-year public universities. Two-year community colleges would be cut by 6 percent, or $110 million. The cuts are expected to result in larger class sizes and faculty layoffs. Gregoire suggests letting the colleges and universities decide if they need to reduce enrollment to maintain quality.

"Community colleges were spared the deepest cuts because the governor's office felt those institutions will get the brunt of laid-off workers heading back to college for retraining.

"Universities would be allowed to increase tuition by 7 percent, which would raised $128 million to help offset the cuts. Community colleges can increase tuition by 5 percent, which would raise $34 million."(Ibid.)

Raising tuition above the rate of inflation is unacceptable in a time in which it is becoming harder and harder for working and middle class people to attend college (see an earlier post on this blog, "College in WA and across the US becoming unaffordable"). Costs for attending college have skyrocketed in recent years, keeping higher education out of reach for many lower-income people. Laying off faculty and staff will exacerbate already climbing unemployment in the state. Also, if laid-off workers are expected to enter community colleges for retraining, why are their budgets being reduced instead of increased?

"Natural resources: $35.8 million

"The proposed cuts include closing 13 of Washington's 121 state parks, saving $5.2 million, and shuttering some fish hatcheries, saving $6.6 million." (Ibid.)

Closing state parks will not only reduce the quality of life of people who spend their recreation time in the outdoors, it will result in lost jobs for park rangers and staff. Here's a comment from a woman responding to another person on this Seattle Times article:

"'OPEN YOUR EYES== this is all on paper NO real cuts.' Hey Mr. Nice Guy, tell that to the dozen or so Park Rangers who were told today that they will be laid off at the end of January, including my husband. Or the staff at the 13 state parks that are closing and are either losing their jobs or forced to move to other parks."

These budget cuts are affecting working people in real ways already. Workers like park rangers rely on state funding for good paying jobs that can support families. We must not let our quality of life be slashed to ribbons while the banks on Wall Street and the rich investors and corporations get bailed out when they are in trouble. 40 out of 50 states need significant amounts of money to continue providing jobs, services, and education to their constituents. The federal government has the money; we must demand it.

Related Articles:

• Seattle PI Frugal budget wins few friends
• Seattle PI Editorial State Budget: Pain and suffering
  

One-dimensional stimulus

By Evan Rohar

Following are excerpts from two articles published in The Enterprise Newspapers in two days that illustrate the ineffectiveness of a one-dimensional economic stimulus plan:

"From Washington, D.C., and from Olympia, the refrain is the increasingly same: This recession demands a job-creating stimulus package.

"From Edmonds, the response has been quick: If you have money, we have ways to spend it. . .

"Sidewalks, walking trails, lighting improvements on downtown Edmonds' Main Street and more mundane projects are all included in the city's 11 project, $9.2 million 'stimulus package' wish list . . .

"All told, the city's projects would create a total of 116 full-time equivalent jobs, officials estimate." ("Edmonds' stimulus wish list $9.2 million long," 12/10/08)

"The [Edmonds school] district received almost $9 million in I-728 money last year, which funded about 78 full-time teachers. Mostly it goes to reducing class size, and the rest goes to teacher professional development and extended learning." ("Public school funding picture bleak," 12/11/08)

This is the problem with a one-dimensional economic stimulus program. If funding is taken away from I-728, 78 teachers will lose their jobs. Even if Edmonds gets everything on its bailout wish list (an unlikely prospect by the tone of the first article), it will create only 38 net jobs after subtracting the lost teaching positions.

An approach which pinpoints only certain ailing sectors of the economy will not work in a recession of this magnitude, especially when workers already have a very hard time finding living-wage work. From the Seattle PI:

"Nearly 80 percent of job openings in Washington last year paid less than a living wage for a single parent with two children. And every opening that did offer a living wage for that type of family drew an average of 10 job seekers.

"Overall, the percentage of job openings paying less than a livable wage for different household compositions remained virtually unchanged in 2007 from 2006, according to an annual study on the gap between what families earn and what they need to get by.

"Because the study does not reflect the economic trends of 2008, 'in all likelihood, the numbers are an underestimate, so the picture is even more bleak,' study author Gerald Smith said Tuesday." ("New jobs offer less than living wage," 12/9/08)

Workers' real weekly earnings have been declining since the mid-1970s. We need a diverse array of living-wage jobs in order to boost the living conditions of workers in this country.

CPJ Article: Unite against the budget cuts or we will fail

We're in the current issue of the Cooper Point Journal. The article this time emphasizes the need for unity. Here it is:

We will unite against the budget cuts, or we will fail

By Benjamin Gallup and Evan Rohar

Every sector of spending in Washington State will be under attack during the coming legislative session. The budget deficit for 2009-10 will almost certainly reach $6 billion, while some say it could be as high as $8 or $9 billion. Legislators are now discussing a 23 percent cut to the higher education budget as part of their efforts to eliminate the deficit. Other large items on the long list of cuts are health care, social services, and primary education.

In the coming months, legislators will use “fiscal responsibility” as a rationale for cutting spending to programs that students and workers need most in a recession. Yet economists have said recently that fiscal restraint is likely to make our economic woes worse. The state needs immediate aid from the federal government to continue vital services as well as a progressive tax code which taxes corporations and the wealthy to provide a consistent and predictable source of revenue. This is, in fact, the “fiscally responsible” course. Our elected officials have not yet put forward an acceptable solution to this budget crisis, so we must organize and do it ourselves.

Given the task ahead, students, faculty, state workers, and indeed all citizens of this state must unite against the looming threat to our quality of life. We must build a state-wide coalition based on our common interests. This coalition will need to embrace a variety of tactics to accomplish the goal of full funding for all state programs.

Realizing the interconnectedness of each vulnerable program is the key to creating and maintaining a coalition of all the parties with a stake in this fight: students, faculty, and staff; state workers; and those dependent upon state social and health services. Perhaps most importantly, we must remember how the decisions made in the coming months will effect an already ailing economy, and therefore every person living in this State.

Last week, Governor Gregoire asked for a minimum $600 million from the federal government for infrastructure projects. At the same time, she sought a $600 million budget cut to higher education (which has since been revised upwards to $690 million). Addressing joblessness through a federal stimulus in one sector of the economy while laying off state workers in another makes little sense. We need a holistic approach to this economic crisis, not an injection of funds into one part of our ailing system while others are crippled. The government should not force faculty, staff, and students out of higher education just to seek the infrastructure jobs it is creating to stimulate the economy. Yet we as students cannot say to a laid-off construction worker who would benefit from a state infrastructure stimulus, “Our education is more important than your ability to find living-wage work.” Similarly, the government should not present the construction worker with two bad options: a good education for her child or a living-wage job.

We face a long struggle which could take us until the end of June and the deadline for a new state budget. We must steel ourselves and square our shoulders to the task ahead. Above all we must have faith in our collective ability to make a difference through organizing and mass action, as did those in the 20th century's civil rights, anti-war, and labor movements. Along the way, the governor and lawmakers will make concessions to groups within our coalition. We must build the strongest bonds of solidarity so that when one group gets what it wants, it does not just give up the fight for full funding of all our distinct, yet interconnected, needs.

In this economic climate, tuition hikes and layoffs of state workers should be out of the question. So, too, should a reduction in services to a growing number of people who need them. The federal government gives trillions of dollars in bailouts to banks and rich investors. Students and workers must unite to demand that the federal government fund our needs.

Task Force on K-12 ed recommends, but no one's listening

By Evan Rohar

The Basic Education Finance Task Force has come out with a list of recommendations for Washington State's K-12 education system. They make some excellent suggestions on how to improve the quality and equity of Washington's schools ("Recommendations of the Basic Education Task Force," Seattle Times, 12/10/08). The only problem is the price tag: $2-3 billion. From the Seattle Times:

"[Task force chairman] Dan Grimm, a former state legislator from Puyallup as well as a two-term state treasurer, said Thursday that he was inspired by a phone call and letter from Gov. Christine Gregoire to propose an extension of the sales tax to services. That would make things like doctor visits and financial advice subject to the state sales tax.

"On Tuesday, the task force voted to approve a proposal that asks for more state money to pay for things like a longer high-school day, smaller classes in the younger grades and regionally adjusted pay for teachers. . .

"Task-force members are not responsible for solving the state's financial crisis but the state will be unable to pay for the group's proposals with expected state revenue, the governor wrote to Grimm, who chairs the Basic Education Finance Task Force.

"'Task Force members must provide recommendations on how the state can fund their funding-level recommendations,' Gregoire wrote.

"When the group was formed by the Legislature in 2007, it was looking forward to years of plenty, Grimm said. But things changed and the task force did not change along with the economy, he said." ("Task force suggests sales-tax expansion," 12/12/08)

And why should a task force to improve education change with the economy? In times of plenty or times of trouble, is the need for a quality education, especially for children, not constant? Young people need a future whether the Dow is up or down. A tax on doctor's visits and other services is not the answer, however. Nor would voters who are already facing stagnant wages and layoffs pass a referendum to expand the sales tax pass . If state taxes are to be increased, they should fall on wealthy and hugely profitable corporations like Weyerhaeuser, Boeing, and Microsoft.

Furthermore, we need a federal government that is committed to expanding funding for education and other necessary services. That means an immediate injection of federal dollars into state coffers across the nation to bolster funding for education (k-12 and higher), health care, and services such as home care for the elderly. There seems to be a vacuum of leadership on these issues; we must fill that vacuum with our ideas and organization.

Gregoire proposes huge State budget cuts

By Evan Rohar

Gregoire has put out an initial plan for making the cuts necessary to balance the State's budget. The Seattle Times published an article today on her plans. Here are two excerpts:

"The governor's office, along with agency staff, reviewed state programs and ranked them by priority. About 200 state programs and services, worth about $2.7 billion, top their list for cutting or eliminating entirely to help close a gaping hole in the state budget."

"On the chopping block: more than $900 million over two years that funds an initiative approved by voters to reduce class sizes; $342 million that aids school districts with small property-tax bases, and about $20 million that pays for gifted-student programs." (Seattle Times, "Gregoire looking at massive state budget cuts," 11/30/08)

Also on the chopping block is $404 million for higher education.

There are two things especially to note about this initial proposal. First of all, it is about half or perhaps less than half of what will need to be cut to balance the budget (Gregoire admits that the budget deficit may reach $6 billion in this deteriorating economy). This first shot at identifying programs to be cut is meant to soften the blow of what truly lies ahead: a much more aggressive reduction of spending. The $404 million for education will almost certainly grow back to the $600 million cut that educators have been told to prepare for. Cuts to cost of living pay increases for State workers will almost certainly be part of the plan (a modest 2% per year which at this point does not even cover inflation).

The other very interesting point to note is that this plan looks very similar to the Seattle Times' plan laid out in their editorial published on Nov. 23rd (article and analysis in a post below). Going right down the list, you have a $1.3 billion from public schools (which is actually $400 million more than the Times' proposal), $572.5 million from social services (cutting health care for the children, the poor, and the elderly), and the $404 million from higher ed. The Seattle Times is the principle newspaper for putting forward the opinions and program of big business in Washington State. Gregoire still has not set a course that would avoid hurting students and working people. Her request of $100+ million fromt the federal government is still just a drop in the bucket compared to the massive deficit this State will run. We have to organize to put our program forward, because we don't have a newspaper, staff writers, or a governor to do it for us.

The Seattle Times - Legislature, governor must find $5 billion in spending cuts without raising taxes

By Evan Rohar

The Seattle Times on Sunday called for what amounts to an all-out attack on students and state workers. Here's the article, with analysis below:

"Five billion dollars. The state has to cut that amount of projected spending to balance its budget from mid-2009 to mid-2011. It can be done — with enormous difficulty.
The $5.1 billion gap is a projection only, and could change. Between now and March, when the state budget is finalized, it probably will widen. It is not likely to shrink.
The gap might be filled with new taxes, but it would be foolhardy to lay on big new taxes during an economic crisis. Every business is trying to manage its way out, conserving its cash. Gov. Christine Gregoire pledged she would manage the state's finances without any tax increase, and she should stick to that.
After discussions with budget people in both political parties, we have some ideas for reaching $5 billion. The ideas are rough ones — with neither the Republican or Democratic name on them — and we are not sure we like our name on all of them, either. But this list is a place to begin.
• $926 million — Cancel the Initiative 728 money, or most of it. Officially this is for class-size reduction in the public schools, but the schools have folded it into everyday operations. Cutting I-728 money was done in 2003, when the budget was in a crisis, and has to be done again. That is the danger of budgeting by initiative.
• $887 million — Don't fund increases in pay and benefits for government employees, including at state-funded schools and colleges. Simply put, it's a crisis. Nobody on the state tab can expect a raise. This is unavoidable.
• $700 million — Tap the state's rainy-day fund. "I don't know that it rains any harder than this," says the governor's budget director, Victor Moore.
• $600 million — Cut seats in state universities and community colleges. Cut some tuition waivers. Offset some cuts with increased tuition.
• $440 million — Skip the payment to state employee pension funds, which was done in 2003. This will have to be made up later. A cut does not affect anyone's benefits.
• $150 million — Freeze enrollment in the Basic Health Plan, the state's health-insurance plan for the not-quite-poor.
• $100 million — Cut General Assistance-Unemployable, a welfare program most states don't have, by time-limiting the program and forcing clients onto Supplemental Security Income, which is federal.
• $100 million — Extend the partial state hiring freeze past June 30, 2009.
• $82 million — End sales-tax-mitigation payments to cities.
• $70 million — Skip a contribution to the Life Sciences Discovery Fund.
• $52 million — Take away the three math and science learning-improvement days — nonteaching days — for high-school teachers, and two similar days for elementary teachers.
• $45 million — Require that children with household incomes under 200 percent of the poverty level now in the Basic Health Plan enroll in Medicaid instead, because half of Medicaid is paid with federal dollars.
• $28 million — Repeal Initiative 1029, which requires extra training for in-home-care workers.
• $20 million — Don't raise the cutoff on the state Children's Health Insurance Program from 250 percent of poverty to 300 percent as previously planned.
• $12 million — Cut Community, Trade and Economic Development money to "coordinate government efforts to improve the effectiveness of economic investments."
That list totals more than $4 billion. There are many other ideas, some of which could offset proposals that are unacceptable.
The state could raise the minimum loss for felony theft, so that more thieves would go to county jail than to state prison. It could repeal the "three strikes" law and parole some prisoners convicted under that law. It could divert tax sources, like lottery money, that now go into the capital budget back into the general fund. It could do some contracting out. Etc. Etc.
The Legislature will have a painful time to get to $5 billion. But with a close look at many small things, which we have not done here, it can be done.
Taxpaying families and employers are having to live within their means and their government must do the same.

Copyright © 2008 The Seattle Times Company"

This article calls for cuts to programs that people need most in a recession and furthermore calls for selling out the future by defunding public schools and universities. The idea to freeze the wages of state workers violates collective bargaining agreements negotiated between the state and unions representing those workers (Washington Federation of State Employees, Service Employees International Union, Washington Education Association, and the American Federation of Teachers, among others). The plan to skip financing of pensions for state workers in this economic environment could potentially be disastrous. In 2003, we were seeing the tail end of the economic downturn after 9/11. Now that we're facing the very beginning of what could be a long, deep recession, state tax revenue could remain depressed beyond FY 2011, which would eventually endanger state pensioner benefits. Extending the state hiring freeze is not the thing to do in an environment where workers are already having trouble finding any jobs, let alone good state government jobs. Finally, freezing enrollment for the Basic Health Plan would be a disaster for working people; whether poor or on the brink, people still need health care and this is the only way for many to get it right now.

The $5 Billion Threat to Students and Workers

By Benjamin Gallup and Evan Rohar

Due to plunging tax revenue because of the weak economic situation, Washington State will run a budget deficit of $5 billion over the next two years. Legislators are exploring all possibilities for balancing the budget, including a $600 million (20 percent) cut to higher education. A budget cut of this magnitude would have dire consequences for students and campus workers (including faculty, staff, and maintenance workers). Meanwhile, the legislators in Washington, D.C. find $3 trillion for wars in Iraq and Afghanistan and more than $1 trillion to bail out rich investors.

The students of this campus and at public universities across the State cannot afford to take the cost of this $600 million on our backs. Nor should we settle for larger class sizes and fewer courses of study. We are already paying far more for our education than our parents' generation. Public grants for higher education have declined in value over the past 20 years. In 1987-88 the Pell Grant covered a student's expenses for half the school year. In 2007 that number declined to one-third, with expensive private loans taking up the slack. If the budget-slashing goes forward, tuition hikes and faculty lay-offs will make higher education even less accessible.

And yet while students will surely be hurt by the slashed higher education budget, we will not be the only ones under attack in the coming period. Governor Gregoire is proposing massive cuts to State programs across the board, which will put people dependent on those programs into dire straits. It is exactly during a recession that working families need these programs. Furthermore, State workers everywhere will face attacks on their wages, pensions, and health care.

No alternative has been offered by the Governor or our legislators to this dilemma. They have never once raised the prospect of abolishing the regressive sales tax in favor of a progressive income tax that targets the wealthy and big business to boost revenue. Nor have they proposed approaching the federal government for aid to schools. Therefore, we must do it ourselves.

We must respond quickly. Evergreen Socialist Alternative is calling for an organizing committee to be formed to plan a response to this crisis. The Evergreen Committee for Full Funding will meet on Wednesday, December 10 in SEMII A1105 at 4:00pm. We are trying to link up all students, faculty, staff, and workers who will be affected by these cuts, and encourage everyone to come be part of the discussion and decision making process. We are proposing various activities including a march on the capitol for some time in January or early February, after the legislature convenes. We must organize on all public school campuses and all State work sites to make the largest possible impact. Some will say that the government cannot afford to sustain current levels of spending, yet there is always enough money for corporate bailouts and war. The money is there if the political will is there, and we can create the political will if we organize.

Students and workers have already been forced over the last 30 years to cut back on their quality of life because of the offensive on unions and students carried out by big business. We must not let them put the weight of this economic downturn on our shoulders. Instead, we will stand shoulder-to-shoulder with our teachers, staff, and building maintenance workers to defend against the imminent attacks on our quality of life in the classroom and on the job. We need a movement to fight for our right to a good education and living-wage jobs based on a platform of:

No program cuts,

No layoffs,

No tuition increases, and

No attacks on wages and benefits of state workers:

To be paid for by federal aid and taxes on the wealthy.

Contact EvergreenCFF@gmail.com to get involved or come to our meeting in SemII A1105, Wednesday, December 10 at 4:00pm.