Governor Pledges Effort to Reinvent Government, But Says She Won't Cross Labor

Gov. Christine Gregoire

By Erik Smith

Staff writer/ Washington State Wire

OLYMPIA, June 25.—After two years of budget troubles and with another enormous $3 billion budget shortfall looming next year, Gov. Christine Gregoire Thursday announced an effort to strip state government down to its bare essentials.

            It might not sound like anything new, but it’s a sign that the alarm bells are going off at the Capitol. For the first time, the Democratic governor is sounding the same arguments that have been raised by Republicans and the business community for the last two years. She is calling for a “reset” of state government and a rethinking of the services that state government provides, even if it means farming out government functions to the private sector. But she said she hopes to make changes with state-employee unions at her side – which may be easier said than done.

            In a news conference Thursday, Gregoire was flanked by representatives of business and labor as she announced creation of a blue-ribbon committee on government restructuring. The committee will include three dozen members of prominent business, labor and social service organizations, and it will hold hearings statewide in late July in preparation for the tough budget decisions that face the Legislature next year. Meanwhile, she said her budget office will ask tough questions of state programs in a way that hasn’t been done before.

            Latest estimates from the state Office of Financial Management indicate that the state will run $3 billion short of the amount needed to maintain current programs, Gregoire said. That comes on top of the $12 billion in budget trouble that the state has faced since the economy tanked in late 2008. The easiest cuts have been made, but the next $3 billion gap can’t be bridged by shaving a few dollars here and there, she said. 

“The reality shows that we must continue to reset how we are going to deliver our services in these tough times,” she said. “Today must mark the start of something different. We must consider a new approach to government. The times, not just the present but in the future, demand us to think differently – to ask our questions in a new way, to attack our economic situation with a fresh approach.”

Her traditional critics in the Republican ranks said they were encouraged, but what counts is whether anything happens.

“It’s something we’ve been advocating for some time – getting back to what government ought to be doing,” said state Rep. Gary Alexander, R-Olympia, ranking Republican on the House Ways and Means Committee and a member of the governor’s advisory committee. “We’ll be happy to be part of the discussions. The question will be whether we have a commitment to actually do it.”

            Ferry System on the Table

As an indication of her seriousness, Gregoire said she is willing to consider the privatization of the state ferry system – one of the crown jewels of state-government services, but a service that might also be provided by the private sector. Ten of the 21 state ferry systems nationwide are operated by private contractors, she said.

“I mean to question the ferry system. I've asked the experts to tell us the good, bad and the ugly about what would happen if we do that [privatize the system]. I don't want to compromise one of the best safety records in the country. I don't want to compromise customer service and I don't want to make our ferry system unaffordable to consumers. Having said that, let's look, let's ask.”

On the other hand, it should be noted that the governor helped block a similar proposal this year – the privatization of the state’s liquor stores. Proposals on the table this year would have represented a net gain to the state of up to $350 million. But the effort died in a legislative committee due largely to opposition from labor unions, which represent workers in the state stores. Now, because the state did nothing, a pair of initiatives that would eliminate the state stores appear headed for the ballot. Those proposals would generate hundred of millions of dollars less for the state.

If the governor wasn’t willing to consider privatizing the liquor stores, how serious will the new initiative be?

           Won’t Cross Anybody

Gregoire said the times demand a more aggressive approach to government, but she hopes for the cooperation of labor as proposals for privatization and contracting out are considered.  “We’re in a partnership,” she said. “I have union representation sitting at the table, and their voices have got to be part of the solution. This is not about protectionism anymore. This is about all of us working together to see if we can structure a government that will meet the people's needs for the 21st century and meet the demands of the worst recession in history, so I don't intend to cross anybody. I intend to put out my hand and say join me and be a partner.”

One significant element of the governor’s message is that she appears to be considering a whack at government first, before talking about tax increases. Gregoire told reporters that is precisely her intention. She warned that if the Legislature attempts to solve next year’s budget crisis with a tax increase, it is likely to be challenged with an initiative or referendum.

            I-1107 Illustrates Problem

Gregoire pointed to this year’s Initiative 1107 as an example. The measure, sponsored by the state’s soda-pop distributors, would roll back about $100 million in tax increases imposed this year on soda, bottled water and candy. The campaign is currently gathering signatures and appears a good bet to earn a spot on this year’s ballot.

If you think a tax increase will solve next year’s problem, she said, “show me you can retain the amount of revenue that we raised this session. Do I think [I-1107] might make the ballot? I think it might.

“Do I think it's ridiculous. I do. I drink Diet Coke. I'm willing to pay two cents a can. I'm willing to pay two cents a can for hospice care. I'm willing to pay two cents a can so that I can protect kids’ health care.