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Originally published July 20, 2008 at 12:00 AM | Page modified September 18, 2008 at 12:56 PM

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Election 2008

How state spending rose $8 billion under Gregoire

Since Christine Gregoire was elected governor, state spending has increased $8 billion — a 31 percent increase in the two-year general-fund budget. Gregoire says the state is investing in what matters most: education, health care, public safety. Her Republican challenger, Dino Rossi, says she's spent more than we can afford.

Seattle Times Olympia bureau

OLYMPIA — As much as anything, Gov. Christine Gregoire's first term in office is notable for one number: $8 billion.

That's how much state spending has increased since Gregoire, a Democrat, was elected in 2004.

Another way of looking at it: The two-year general-fund budget has jumped 31 percent, to $33.6 billion. That's the largest percentage increase in the past 16 years.

Gregoire says the state is investing in what matters most: education, health care, public safety.

Her Republican challenger, Dino Rossi, says she's spent more than we can afford. He's making the budget a centerpiece of his campaign this year.

Indeed, unless the economy quickly turns around, the state likely will face a multibillion-dollar shortfall next year.

The state budget is complicated and can be sliced to support just about any claim you want to make about the governor's priorities. But a look at spending under Gregoire and how it compares with the first term of her predecessor, Democratic Gov. Gary Locke, does reveal some trends:

• Gregoire, with a Democratic-controlled Legislature at her side, spent at a more rapid pace than Locke, who had a divided or tied state Legislature his first term. (Spending during Locke's second term slowed sharply because of the dot-com bust and recession after the 2001 terrorist attacks.)

Gregoire, though, certainly isn't the biggest spender in recent history. The budget grew 36 percent from 1981-84 under Republican Gov. John Spellman. And it soared 45 percent during Democratic Gov. Booth Gardner's second term, from 1989-92.

• About half of Gregoire's $8 billion budget increase has gone to education. Public schools got an additional $3 billion, and the state's colleges and universities received close to an extra $1 billion.

In fact, since 2004 Gregoire has increased education spending more than Locke did in his entire eight years in office. And Locke was billed as the "education governor."

• Teachers and state workers have done well. The state's contribution to pay and benefits for teachers is up about 29 percent since 2004, twice the rate of increase during Locke's first term. Funding for state-worker pay and benefits has increased 31 percent.

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Some of the growth is due to more workers: About 6,100 state employees have been added during the Gregoire administration, compared with the 8,400 workers added during Locke's first term in office.

The rising cost of benefits also has pushed total payrolls higher. But much of the increase is because of better wages. Starting pay for state corrections officers, for example, is up 38 percent, or about $870 a month.

The governor and lawmakers also created a new state agency, added thousands of children to the state-paid health-care program and gave big raises to her top staff.

Billions more have gone into state construction and transportation projects. But it's the general-fund budget that drives state government — and much of the GOP election rhetoric.

Shortfall projected

Can this spending be sustained?

Already, the state Senate Ways and Means Committee projects a $2.7 billion shortfall when the Legislature meets in January to write the next two-year budget. If the economy weakens even more, that number could go higher.

"We will have a multibillion-dollar shortfall to deal with," said Steve Mullin, president of the Washington Roundtable, an association of corporate executives. "That's not open to debate."

Gregoire isn't ready to concede that point, saying there's still time for the budget outlook to turn around. And she makes no apologies for the spending.

Washington is doing better economically than most other states, she said, "and it isn't by accident that we're as resilient as we are. It's because of many of the good things we've done over the past three years."

But if Washington state sinks into recession, she says, blame President Bush, not her.

"This is not an issue of spending. This is an issue of we're not an island and the national economy and the failed policies of [the Bush] administration have led this country to an economically troubled state," she said.

Education a priority

Gregoire, who portrayed herself as a fiscal conservative during the 2004 election, came into office as the state was emerging from recession.

She faced a $1.8 billion deficit her first year. But it wasn't long before state revenue, largely fueled by a red-hot real-estate market, began rolling in by record amounts. Deficits were replaced with large surpluses.

Gregoire took an idea long pushed by Republicans and helped create a hard-to-tap "rainy day" savings account last year for economic down times, and set aside additional money as well, currently about $800 million combined.

Then she spent the rest.

A key priority was education.

"Higher education has done very well, but that last budget of hers was a huge one for K-12 education," said Kriss Sjoblom, an economist with the business-backed Washington Research Council.

An extra $200 million went to "education reform," which includes teacher training and money for additional all-day kindergarten programs in school districts.

Hundreds of millions more are paying for I-728, an initiative approved by voters in 2000 to reduce class sizes. The Seattle School District expects to get more than $19 million in I-728 money for the upcoming school year to hire teachers and pay for professional development and summer school, among other things.

Roughly 80 percent of all the new money for public schools has gone to teacher salaries and benefits.

Gregoire also championed the creation of a new state agency, the Department of Early Learning, which is supposed to consolidate child-care and early-learning programs.

She supported hiring hundreds of new social workers to keep a better eye on children at risk of abuse and to investigate child-abuse reports within 24 hours. About 70,000 kids have been added to state-supported health care since Gregoire was elected.

She and the Legislature also approved a $475 million increase for the state Department of Corrections, driven largely by inmate population growth, the better pay for corrections officers and new programs, including an effort to reduce recidivism by helping offenders find work and providing other support.

Millions more went to pay for the cost of inflation in running a state government with more than 111,000 employees, from social workers to college professors to State Patrol officers.

Rossi responsible?

Gregoire defends the spending in part by blaming it on Rossi.

The 2003-05 budget crafted by Locke and Rossi, who was chairman of the Senate Ways and Means Committee at the time, limited spending increases for higher education and public schools, and eliminated cost-of-living increases for teachers and state workers. The budget was put together in the middle of a recession.

"What I got was past-due bills — bills that were not paid by the previous budget, that came due," Gregoire said.

She considers the money for I-728 and I-732, another initiative approved by voters in 2000 that requires annual raises for teachers pegged to inflation, to be mandatory cost increases.

"I'm not one who disregards the voice of the people," she said.

State workers, she said, also went too long without raises and needed to catch up. Plus the state had to start putting more money into its employee pension system.

But the governor and Democratic-controlled Legislature did not stop there. They also expanded programs, started new ones and said they wanted to spend even more in the future, including paid family leave, a sales-tax credit for low-income families, and increased access to health care for children.

Mullin, with the Washington Roundtable, said they simply went too far.

"We applaud the fact that she's tried to prioritize resources in the areas we think are most important to grow the economy," Mullin said. But he added, "We think it's become clear that the significant increase in state spending over the past four years is simply not sustainable."

Rossi, for his part, says he would have made education and public safety top priorities if he'd been governor. And he would have considered spending cuts as well.

"I would have looked inside the agencies and found more efficiencies," he said. "Everything can't be a priority."

He also identified an area where he would have spent some of the surplus differently than Gregoire.

"The other thing we could have done, obviously, is ... to give some of the money back to the people who gave it to you in the first place," he said, such as tax breaks for businesses.

Paul Berendt, a former chairman of the state Democratic Party, defended Gregoire, noting that a large portion of the increase in spending was tied to education initiatives approved by voters.

"You have a decision to make: abide by the will of the people and these initiatives that have been passed, or thumb your nose at them and say I'm not going to spend" the money, he said.

Still, Republicans consider the budget to be Gregoire's biggest vulnerability. Their campaign attacks often point to comments the governor made in her 2006 State of the State address.

"Our state budgeting has been a roller coaster," Gregoire said at the time. "We spend when we have a surplus and we struggle to make painful cuts when the economy slumps. It is time to even out the ride. While the roller coaster is fun at the amusement park, it is no model for state budgeting."

Andrew Garber: 360-236-8268 or agarber@seattletimes.com

Copyright © 2008 The Seattle Times Company


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