Work to identify potential savings and efficiencies continues
OLYMPIA — On Day 43 of his administration, Governor Bob Ferguson proposed a plan to save approximately $4 billion. Ferguson’s proposals:
- Maintain all K-12 education investments, and adopt all of Governor Jay Inslee’s proposed investments, a total of more than $15 billion annually. Ferguson’s proposal increases the percentage of the budget devoted to K-12.
- Maintain all public safety investments from the current biennium, and adopt virtually all new investments from the Inslee budget.
- Maintain all investments to address homelessness and housing assistance from the current biennium, and adopt virtually all new investments from the Inslee budget. That totals more than $1.2 billion per biennium.
- Honor and maintain the Collective Bargaining Agreements negotiated with Washington’s hardworking public servants.
- Maintain all current cash benefit assistance programs that benefit Washingtonians, such as TANF – Temporary Assistance for Needy Families.
- Maintain Medicaid eligibility for all Washingtonians. Put another way, if you are a Washingtonian on Medicaid, you will not lose your state coverage.
Since taking office Jan. 15, Ferguson and his team have worked to identify and propose savings to help the Legislature address the state’s projected $15 billion budget shortfall. These savings are in addition to Governor Inslee’s proposal, which reduced the shortfall by an additional $3 billion. Combined, those proposals reduce the shortfall by $7 billion.
“Our state faces a historic budget shortfall,” Ferguson said. “This challenge demands thoughtful leadership and a commitment to fiscal responsibility. My team and I have scoured state spending for savings and efficiencies. We must prioritize while protecting the core needs of Washingtonians.”
Ferguson’s budget savings proposals are built on four key principles:
- Good government efficiencies and reductions to ensure state agencies are running as lean as possible and right-sizing government. Many of these are reductions that should be made even if there was not a budget shortfall.
- Given the budget situation, Ferguson very carefully examined proposed or adopted spending not yet implemented.
- Reconsider recent spending. For example, investments made two years ago for the current biennium. If the Legislature knew two years ago that the state would be facing a $15 billion shortfall, legislators likely would not have made all of these investments.
- During the COVID-19 pandemic, Washington received significant one-time funding from the federal government for various programs. Those one-time dollars are gone. In some circumstances, the state has backfilled those one-time dollars with ongoing general fund resources. Ferguson and his team took a close look at whether the state could take on those obligations for those federal dollars that were meant as a one-time investment during COVID.
Ferguson is also proposing $300 million in savings by requiring most state employees to take one furlough day per month for the next two years. Certain public employees will be exempt, including troopers patrolling our roads and staff working in our prisons and state hospitals.
Ferguson’s identified savings total $3,926,404,000. The full list of Ferguson’s current proposals is available here for the supplemental budget, and here for the 2025-27 biennium.
Good government efficiencies and reductions
Ferguson proposes reductions in government spending that do not directly impact vital services.
For example: During the emergency response to the COVID-19 pandemic, the Department of Health needed warehouse space for supplies. That warehouse is no longer necessary. Ending that lease saves $4.4 million over four years.
The Department of Ecology and State Parks are saving taxpayers $2.4 million over four years by consolidating and sharing office space.
The Forest Practices Board had funding allocated for rulemaking, but does not anticipate rulemaking in the next four years. Ferguson recommends moving that $1.1 million back to the general fund.
Due to declining population at the Special Commitment Center, Ferguson also recommends that the Department of Social and Health Services close one 24-bed unit and consolidate residents into the remaining units, saving nearly $4 million.
The Department of Services for the Blind pays for a certain number of spots in the young adult training programs at the School for the Blind in Vancouver, whether they are filled or not. Ferguson proposes that, if there are not Washingtonians who need those spots, the state opens eligibility to young people in Oregon. The Oregon Commission for the Blind will pay for any spots they fill, an anticipated $52,000 over four years.
Savings from this category also include a 50 percent reduction in out-of-state travel, a 25 percent reduction to in-state travel, and a 10 percent reduction in state agency spending on equipment and other goods and services.
Ferguson also proposes targeted reductions in state-funded marketing and outreach campaigns, as well as studies and task forces that are not essential to public safety or contributing to the social safety net.
Pausing or phasing in new spending
Ferguson recommends pausing or phasing in program expansions or rate increases that have not yet been implemented.
For example, Ferguson proposes saving $144 million by gradually expanding proposed rate increases paid to childcare centers over the next four years instead of increasing the rate all at once in July.
Scaling back recent spending decisions
Another category of savings involves scaling back major recent investments the Legislature adopted before the full scope of the budget crisis was clear.
For example, Washington went from spending $14 million per year as recently as 2021 on Foundational Public Health to spending more than $155 million per year. Ferguson proposes reducing that to $133 million annually.
Limiting replacement of one-time federal funding
Ferguson and his team also looked at programs where the federal government provided one-time funding. That funding is now gone, or soon will be, but in some cases the state has backfilled with ongoing general fund dollars.
For example, the Washington State Department of Agriculture provides assistance to food banks. As recently as 2019, that program received $12 million in general fund support, per biennium. During the pandemic, the state used one-time federal funds to temporarily increase the program. In the 2021-23 biennium, for example, $128 million in one-time federal dollars went into the program. As that federal funding has declined significantly, the Legislature invested substantial funding. Ferguson recommends limiting the general fund investment to $82 million for the next biennium.
Additional agency savings not included in Ferguson’s proposal
In response to Ferguson’s call for money-saving ideas, state agencies identified an additional $1 billion in potential budget savings that Ferguson does not recommend at this time. That information will be sent to the Legislature for their consideration, recognizing that no option can be off the table as work continues to bridge the budget gap.