An unofficial state revenue forecast is projecting a $7 billion deficit for the next four years.
It is possible this deficit number is even understated based on the amount of economic activity that has been shut down by the Governor’s stay home order the last few months. However, state employees are scheduled to receive a 3% pay raise on July 1. With the state facing a massive budget deficit, the Governor should immediately reopen the state employee contracts to cancel the pay raise before it takes effect.
According to RCW 41.80.010 (5):
“If, after the compensation and fringe benefit provisions of an agreement are approved by the legislature, a significant revenue shortfall occurs resulting in reduced appropriations, as declared by proclamation of the governor or by resolution of the legislature, both parties shall immediately enter into collective bargaining for a mutually agreed upon modification of the agreement.”
Rather than wait for the new Fiscal Year to start, the Governor should act now to secure those budget savings.
The Governor has announced several other actions to reduce state spending including signing a directive to freeze state hiring, personal service contracts and equipment purchases. On May 13, the Director of the Office of Financial Management (OFM), David Schumacher sent agencies a memo asking them to identify a combined $1.9 billion in savings options.
It is clear that we must start taking steps now to confront this fiscal crisis. Even using all of the reserves, if the unofficial forecast holds true, we estimate the state would still face a $4.1 billion shortfall over the next three years.
Therefore, I am directing agencies to identify operating budget savings options from their fiscal year 2021 appropriations. Facing a massive budget deficit and record private sector unemployment, now is not the time for government pay raises.