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Originally published June 24, 2012 at 5:44 PM | Page modified June 24, 2012 at 10:16 PM

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State budget realities may challenge McKenna, Inslee

State budget forecasts released last week indicate that top gubernatorial candidates Rob McKenna and Jay Inslee could face funding challenges in the next biennium. Neither candidate has specifically outlined a budget proposal.

The Associated Press

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OLYMPIA — Washington's next governor is projected to start the job with a growing budget. That extra revenue may not be enough to fulfill the state's education-funding obligations.

A forecast released this week said state revenue will grow by about 3.5 percent per year for the two-year cycle beginning July 2013. But many of those gains will be consumed by other growth in state government, such as the resumption of cost-of-living adjustments for teachers, medical-care cost increases and general growth in reliance on state services.

Gov. Chris Gregoire's budget director estimated that political leaders will face a relatively flat budget, with maybe a $100 million surplus to a $100 million shortfall.

Those are challenging forecasts for the state's top gubernatorial candidates, who have both claimed that the state can immediately begin providing much more money for the state's education system without raising taxes. Democratic Rep. Ross Hunter said the obligations, triggered by a state Supreme Court ruling, would total about $1 billion in the next budget cycle and would be higher in future years.

Gregoire has said revenue needs to be considered, and Democratic Sen. Ed Murray, a top budget writer, said he doesn't see $1 billion that can be cut from the budget and put into education. State government staffing levels, for example, already shrank by 7.2 percent between 2009 and 2011.

"We have a structural problem in how we fund state services," Murray said, emphasizing that new revenue has to be part of the discussion.

It's not part of the discussion in the governor race. Democratic candidate Jay Inslee said the state can fulfill education-funding obligations by growing the economy, making government more efficient and curbing health-care costs. Rob McKenna makes similar arguments, adding that he'd like to shrink state government through attrition and a levy swap proposal to make education funding more consistent.

McKenna notes that the $1 billion needed in the next biennium is about 3 percent of the state's $32 billion general-fund budget.

"I think we can find that money in the state general-fund budget and we can do it in the next biennium," McKenna said during the first gubernatorial debate this month.

Basic education isn't the only area competing for money. Both candidates have also talked about increasing funding for higher education, which has been cut repeatedly from the state budget in recent years. They've both also proposed business tax cuts that would claim even more state dollars, though McKenna said his would only be sought after education is fully funded.

Neither candidate has specifically outlined how his budget proposals would pan out.

The state Office of Financial Management, in an early assessment of the 2013-15 budget, projected that maintenance-level spending growth is expected to be at about 7.9 percent. That includes reinstating some larger expenditures, such as cost-of-living increases for teachers that were cut and salaries for state workers who took 3 percent pay reductions.

Remy Trupin, executive director of the left-leaning Washington State Budget and Policy Center, said the candidates for governor need to be clearer with voters about the choices they face. He said it was frustrating that McKenna and Inslee were boxing themselves in by disavowing the possibility of revenues.

"The conversation that they're having is not a good one," he said.

The refocus on education funding has been driven in part by a Supreme Court ruling earlier this year. In the so-called McCleary decision, the Washington Supreme Court determined in January that the state isn't meeting its constitutional obligation to amply pay for basic public education.

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