Mike Salsbury/The Olympian
Gov. Gary Locke delivers his response to Tuesday's budget news. Joining him are state Insurance Commissioner Mike Kreidler and Lt. Gov. Brad Owen (right). Locke said he might request a salary freeze for 100,000 state workers and college professors.

Mike Salsbury/The Olympian
State economist Chang Mook Sohn outlines the state's budget crisis Tuesday.

State budget shortfall grows to $1.6 billion

State workers face layoff concerns

MICHAEL BURNHAM, THE OLYMPIAN

Originally published Wednesday, February 20, 2002

OLYMPIA -- Job security was on the minds of state workers Tuesday after state officials announced that Washington's budget shortfall could reach $1.6 billion.

"There's only two ways to deal with a budget shortfall; they either have to eliminate services or raise taxes," Department of Fish and Wildlife employee Stephan Kalinowski said. "I hope they do both."

Gov. Gary Locke announced a hiring freeze, restricted state employee travel and froze new equipment purchases after Tuesday's budget forecast.

Last week, Locke asked all agencies to report by the end of February on what they have done to cut costs and the work force.

"There's not any fat to be cut," Kalinowski said. "It's going to be people that are going to be cut."

Since fall, some conservative political groups have called for a statewide hiring freeze to ease the budget shortfall.

"The governor should live up to his own words and put everything on the table," said Lynn Harsh, executive director of the Evergreen Freedom Foundation.

Rather than calling for across-the-board layoffs, the Olympia-based conservative think tank is advocating cuts on an agency-by-agency basis.

The state hired 1,045 new employees during the last quarter of 2001, according to the Department of Personnel.

The state lost 1,152 workers during the same period, marking a net decrease of 107 employees.

Not including higher education employment, the state's work force decreased by 1,685 full-time-equivalent employees from July through January, state budget office spokesman Ed Penhale said.

An additional across-the-board hiring freeze would save the state about $14 million to $24 million during the biennium.

Senate Democrats tentatively plan to unveil the Legislature's first budget proposal next week. In December, Locke proposed a mixture of spending cuts, use of reserves and federal aid, and increases in so-called sin taxes and fees.

The Evergreen Freedom Foundation's Harsh chided the Locke administration for not enacting belt-tightening policies after last fall's budget forecast.

"Now, unfortunately, people will have to lose jobs," she said.

George Ormrod, a Department of Natural Resources employee and state worker of 13 years, doesn't think he'll be among those laid off.

"I'm not going to lose any sleep over this," Ormrod said. "If you've been around a long time, your job is usually safe."

As a result of the recession and growing budget problems, agencies are more likely to leave vacant positions open or fill them with temporary workers, said Department of Personnel Assistant Director Dorothy Gerard.

"More and more agencies are filling in positions on a temporary basis," Gerard added. "Should they have to lay off, it's easier to lay off a temporary employee instead of a permanent employee."

Even though Fish & Wildlife's Kalinowski has 18 years of public-sector experience, he saves his earnings for unexpected times.

"I'm always somewhat concerned with job stability, just like everyone else," Kalinowski said. "I don't have any control over this, so I try to manage my finances all of the time."

Declines in high-tech jobs and stock-option income, coupled with higher energy costs, deepened Washington's economic distress, budget office officials said.

That has contributed to an influx of people seeking state jobs.

"We're seeing an increase in the quality, especially in the information technology market," Gerard said.

Michael Burnham writes for The Olympian. He can be reached at 360-704-6869. The Associated Press contributed to this report.

At a Glance

- Bottom line: Tax revenue projected to drop $247 million by July 2003 below levels forecast in November -- on top of the $813 million decline that immediately followed the Sept. 11 attacks. Total two-year revenue forecast for 2001-03 is $21 billion. Budget hole now $1.6 billion.

- Economy: State economist says U.S. economy is showing "unexpected resilience," and recovery is expected later this year. The state economy, however, shows no signs of recovery, with revenue and employment numbers still falling. The slide is expected to end later this year, but a rebound isn't expected to start until next year. Full recovery isn't expected until the first quarter of 2004.

- Locke's response: Gov. Gary Locke imposed a freeze on hiring, nonessential travel and equipment purchases. The governor said an across-the-board spending cut and a salary freeze are being considered.

- What's next: Senate next week will propose a new budget to address the shortfall.

- On the Web: Forecast Council's Web site is at www.wa.gov/ofc.

The Olympian Copyright 2002

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