Governor delivers straight talk to Vancouver high school students

Thirty-two students at the Clark County Skills Center got an impromptu civics lecture Monday morning from Gov. Chris Gregoire on the hard state budget choices she faces due to Washington’s ongoing recession.

The students may not have absorbed all the numbers, or her explanation of how the state and the nation got into this mess, but it was hard not to get her bottom line:

“The last thing I wanted to cut is education, but it’s half the budget.”

Haley Taylor, a student from La Center High who’s studying at the Skills Center to become a dental assistant, asked the governor why she is proposing to cut $150 million from the state’s $300 million levy equalization budget. The state aid helps property-poor school districts match programs offered by districts with richer tax bases.

La Center stands to lose half its levy — about $291,000 — under the governor’s proposal.

“It greatly impacts us,” Taylor said. It could cost her school 5 percent of its staff and might force the La Center district to cut bus transportation, she said.

“Do you think it’s necessary to cut half the equalization?” she asked Gregoire. “When you cut now, you’re actually cutting our future.”

Gregoire explained that when she had to cut $2 billion from the current budget, she had few options for cutting school funding. The Washington Constitution requires the state to fund basic education, but levy equalization is not considered part of the basic education mandate.

“We could increase class size in grades 4 to 12 by two, but that would take legislative action,” the governor said. Shortening the school year also would cut into basic education, she said.

So she threw the question about the equalization levy back to the assembled students. “If not that, what? We’re already cutting health care, we’re cutting food. … I have people coming to me saying, ‘Don’t cut domestic violence (services), ‘Don’t cut supervision of people on parole.’ I agree with every one of them. This is a burden that everyone must bear.”

A small group of protesters from the Occupy Vancouver movement gathered along Northeast 28th Street after being told they could not meet personally with the governor.

Rachel Whitney, whose son is a first-grader at Franklin Elementary, said she was concerned about the proposed cuts in levy equalization. Vancouver Public Schools would lose its entire equalization levy next year — more than $8.4 million — under the governor’s plan.

“Maybe they could close some loopholes instead of cutting- -education,” said Sue Kautz of Vancouver.

In her lecture to students, Gregoire explained that 64 percent of the $64 billion two-year state budget, including federally mandated Medicaid spending, pensions and debt service, is off-limits to cuts. And with a quarter of the biennium already gone, she said, she’s faced with cutting that $2 billion from a pot of $8.7 billion — essentially just social services, “nonbasic” education and public safety.

“That’s really hard,” she said.

One consequence, she said, is that the state likely will terminate its Basic Health Plan for low-income Washington residents, many of whom have jobs that do not provide health coverage.

“We used to cover 100,000,” she said. “Now we’re down to 40,000.” The state had hoped to use Basic Health as the prototype for Washington’s health insurance exchange, which would become available to people without employer-provided coverage in 2014 under the federal health reform law. Now, she said, that won’t happen.

“We have 100,000 on the backlog who can’t get health care, and when we transfer” to the federal plan, those people won’t be able to take part, she said.

In all, she said, the state has slashed $10.5 billion in spending over the past three years.

A sales-tax state

The governor tested students’ knowledge of what pushed the nation into recession. Most who answered weren’t sure. She walked them through the story: “We got mortgages where we couldn’t afford them. We lived off a credit card.” When Wall Street collapsed in 2008, she said, it took much longer than expected for the economy to recover — and then came August’s showdown in Congress over increasing the nation’s debt limit, a fight that damaged the nation’s credit rating.

“Consumers stopped buying,” she said. “We are a sales-tax state. That is our source of revenue. We don’t have an income tax; voters don’t like it. When you’re a sales-tax state, your revenue is derived by people who buy products. We fell off a cliff.”

The state’s aerospace, technology and agriculture industries are booming, she said, but small businesses — “the backbone of our communities” — continue to struggle, and so does state revenue.

Gregoire said voters last year limited the Legislature’s options to address the revenue shortfall that has resulted from the lingering recession. They said no at the ballot box to a temporary income tax on high earners, no to a 2.5-cent tax on soda, and yes to reinstating a measure that requires a two-thirds vote in each legislative chamber to raise taxes or other revenue.

And so, the governor said, she has run out of options.

“We have to ask ourselves, ‘Is this what we want to do?’ Or, as some have asked me, do we want to consider new sources of revenue?” In answer to a later question, she said she is not ready to announce her support for any specific new revenue source.

“I’m using the same due diligence on revenue” proposals as on budget cuts, she said. “I’m letting everyone give me ideas. Ultimately I will tell the Legislature what I think they should do.”

The governor said she won’t propose any cuts in state support for school transportation because she has decided that qualifies as part of basic education.

She also referred to a letter signed by the superintendents of 30 Southwest Washington school districts last month, which asked among other things that the state take over the role of collective bargaining with teachers from financially strapped school districts.

“I’m acutely aware of the burden that’s being placed on school districts with collective bargaining,” she said. “I don’t think any idea should be taken off the table. It’s a new day. It’s a different time.”

Putting a softer finish on her straight talk with students, she told them during a group photo, “Whatever you do, don’t be satisfied with a high school diploma. Get as much education as you can.”

“Do not let these tough times get you down,” she added. “I know you feel this generation has let you down. I accept responsibility for that. But you live in the greatest country in the world. We’ll do all we can.”