Senate budget in line with Locke's

OLYMPIA — Hoping to kick-start talks on plugging the state's massive budget shortfall, Senate Republicans yesterday outlined a plan that calls for more than $1.1 billion in spending cuts and saves another $1 billion by forgoing pay raises to teachers and state employees.

The $22.8 billion plan calls for no general tax increases. Perhaps the most controversial provision is a proposal to eliminate coverage for an estimated 46,000 children in the state Medicaid program.

The GOP proposal will be formally unveiled today. Senate Ways and Means Chairman Dino Rossi said he expects the Senate to pass the plan by Friday with bipartisan support.

Rossi expects criticism, particularly from human-services advocates. But he defended his budget as a good-for-the-economy approach.

"We have probably the highest unemployment rate in the country," said Rossi, R-Issaquah. "I have a little trouble saying we're going to raise taxes on people who are unemployed to give raises to people who still have jobs."

The Republican budget has much in common with the all-cuts plan that Democratic Gov. Gary Locke unveiled in December. In fact, Rossi opened a press briefing yesterday with a PowerPoint presentation titled: "Following the Governor's Lead."

But it's not likely to fly in the House, where Democratic leaders are insisting on a more-balanced budget solution — one that includes cuts and some tax increases.

Though House Appropriations Chairwoman Helen Sommers said she has seen only an outline of Rossi's proposal, she has plenty of concerns, particularly about the children's health-care cuts.

"We don't like to see thousands of children moved off of that program," said Sommers, D-Seattle. "He didn't just go partway. He went pretty far."

According to legislative protocol, the House was supposed to come out with a budget before the Senate this year. But with the April 27 adjournment deadline approaching, House Democrats remain deeply divided over how much money to raise through taxes or other approaches, such as expanded gambling.

"We're all over the board right now," said House Majority Leader Lynn Kessler, D-Hoquiam.

The state would need about $25 billion to keep government running at current levels during the 2003-05 budget cycle, which begins July 1. But tax collections, dragged down by one of the worst recessions in state history, are expected to fall as much as $2.6 billion short of that mark.

Rossi said the Senate budget — a 1 percent increase over current spending — avoids more than $150 million worth of cuts Locke had proposed for nursing-home and mental-health and developmentally-disabled programs. It would also fund hearing, vision and dental coverage for low-income adults that Locke would cut.

Health-care cuts

But in order to help restore some of Locke's cuts, the Senate Republicans want to save about $100 million by dramatically overhauling the state's Medicaid program that currently serves nearly 600,000 children. The GOP plan would lower the income-eligibility level, leaving an estimated 46,000 kids without coverage.

Rossi's budget also counts on the state getting permission from the federal government to charge monthly premiums as high as $40.

The Senate Republican budget would soften Locke's proposed cuts to the Basic Health Plan, a state-subsidized insurance program. Instead of eliminating coverage for 60,000 childless adults, as Locke proposed, the Senate plan would gradually reduce enrollment by about 30,000 through attrition. It also calls for reduced benefits and would force clients to pay more out of pocket.

"This is still a pain-and-suffering budget," Barbara Flye, executive director of Washington Citizen Action, said of Rossi's plan. "He may switch up who gets the ax from what the governor's budget proposed, but he's still talking about vulnerable populations getting the ax."

The Senate Democrats' top budget writer said Rossi briefed her on the budget Monday night.

"He told me it was better than the governor's budget," said Sen. Darlene Fairley, D-Lake Forest Park. "I said, 'Yeah, it is better than the governor's budget, but boy, that's damning with faint praise.' "

Fairley said she was particularly upset at the Republicans' plan to cut prenatal care for illegal immigrants, which she said only hurts the newborns.

Locke issued a statement yesterday complimenting Senate Republicans for following his so-called "Priorities of Government" process. But he said he was troubled by cuts in children's health programs.

Suspending initiatives

Like Locke, Senate Republicans want to suspend three popular citizen initiatives that boosted spending on health care and education. The governor and the Republicans agree on suspending Initiative 773, which raised tobacco taxes to boost enrollment in the Basic Health Plan.

The Republican plan would give local school districts a small portion of the increases scheduled under I-728, which took lottery and other monies and dedicated them to reducing class sizes. Locke would suspend the increases completely for two years.

The Senate plan would also suspend I-732, which voters approved in 2000 to give mandated, annual cost-of-living raises to teachers and school employees.

But unlike Locke, the Senate Republican plan would give raises to beginning teachers and the lowest-paid school staff.

Charles Hasse, president of the Washington Education Association, welcomed the gesture, but said it does not go far enough. He said the raises proposed by Rossi would help schools attract new teachers, but not retain experienced teachers.

But Rossi won one group of converts: the union representing 27,000 classified school workers, including custodians, cafeteria workers, bus drivers and other non-certified school employees — all of whom would get raises.

"It's a great thing," said Rick Chisa, communications director for the Public School Employees of Washington. "We've been working behind the scenes for years to educate budget writers about the widening gulf between classified and certificated employees."

Rossi said the Senate Republican budget would also:

• Reduce the number of state employees by about 2,300, mostly through attrition.

• Deny pay raises for state employees, including higher-education workers, and force them to pay a bigger share of their health-care costs.

• Increase tuition at colleges and universities by 9 percent to make up for a $123 million cut in state support.

Ralph Thomas: 360-943-9882 or rthomas@seattletimes.com. Times staff writer David Postman contributed to this report.