Thursday, July 12, 2012

Impact of state budget cuts on Local Economy, Health

Rep. Sam Hunt (LD 22) describes the impact of the budget cuts on employees in Thurston County. This clearly connects the impact of the State budget on local spending, which means $92.7 million per year less money for our local economy.

A COUPLE OF QUICK FACTS

The state budget has shrunk from $32.6 billion in 2007-09 to $32.2 billion in 2009-11, and the 2007-09 figure includes nearly a billion in federal stimulus funds. In that time state population has grown from 6.45 million to 6.8 million--that's the equivalent of adding another Clark County (Vancouver).

$184 MILLION STATE EMPLOYEE AND K-12 CUTS IN TAKE HOME PAY IN 2011-13

There are 23,835 state employees and 5,400 K-12 employees in Thurston County. Being the seat of government, we obviously have lots of state employees. With the 3% salary cut, increased health insurance costs, and increased retirement deductions, the average state employee will take home $3,690 less in each year of the new biennium. K-12 employees will see an average 3% decrease in their salaries. That is a loss of $92.7 million per year to local families and the local economy.

And it does not include the millions that will not be paid to retirees in Public Employees Retirement Plan 1 (PERS 1) and Teachers Retirement Plan 1 (TRS 1) because of the elimination--not just the suspension--elimination of future cost of living increases for these retirees. This was a request of Governor Gregoire that Rep. Reykdal, Senator Fraser, and I could not support.

I did get the Legislature to approve my amendment to raise the minimum monthly payment from $1,100 to $1,500 to provide some assistance to those who have been retired the longest.



From The Olympian (June 9, 2011) "The cold, hard reality is that the 2011-13 budget calls for the elimination of 4,000 public sector jobs -- state workers, K-12 teachers, college and university faculty and staff. That's on top of the 6,000 teachers and 12,000 state workers the state has already sent to the unemployment office under previous budget cuts..."

A high percentage of the state employee staff reductions will occur here; the number will be in the thousands. The Olympia, North Thurston, and Tumwater school districts will have approximately 100 fewer teachers next school year. Cuts in support staff--classroom aides, bus drivers, cooks, administrators--will be added to that list as district budgets are formulated. And these numbers do not include increased health care co-pays that are sure to occur.

The state budget will have a significant negative impact on the local economy. Our businesses will feel the impact. Think of a couple who work for the state who would like to buy a house, new car or major appliance. Will they be able to do that with $7380 gone from their paychecks? Even going out for pizza or to a movie will require extra consideration in many households. State employees and K-12 staff have not received a pay increase since 2008 when gasoline averaged close to $2 a gallon.

  • Eliminate the Disability Lifeline medical program for 20,000 low-income and disabled Washingtonians (cut $41 million in state funds and $85 million in total funds); 
  • Make cuts to Indigent Assistance DSH for Certified Public Expenditure hospitals and cut 20 percent of their low-income DSH payments (cut $4.8 million in total funds). All other hospitals already lost 40 percent of their low-income DSH payments in the 2011 state budget.

      • Cut Medicaid funding for community mental health delivered through regional support networks by $7.9
        million in state funds and $15.7 million in total funds; cut non-Medicaid funding by $6.6 million in state 
        funds.

      • Cut hospital and physician payments for health care for Department of Corrections inmates by $4.6 million 
        in state funds.

     • Public Health: The Senate budget contains a new cut of $5 million to funding for local public health; Family 
       Planning: The Senate budget cuts funding for family planning grants by $6 million (33 percent)