The Senate Democratic caucus has sent out "talking points" to its members, basically telling them how they should handle any questions they get from constituents about the governor's budget cuts.

Gov. Chris Gregoire has told her budget office and state agencies to make more cuts, enough to shave $330 million off the current 2007-09 budget and to cut in half the projected $3.2 billion deficit for 2009-11.

But even if she cuts it in half, the state still will be facing a shortfall of at least $1.7 billion when the Legislature writes the next budget and that begs the question: Will the Democratic governor and Democrat-controlled House and Senate raise taxes to balance the next budget?

Here's what you're supposed to say: "The governor has said no."

Not, "No way in heck!" Not, "No, I'm a state senator and I don't want to raise your taxes." Not, "Maybe, because I might have to raise your taxes to keep from laying off Federation union members and to give teachers the 5 percent pay raise they're expecting."

No, they're supposed to duck the question. Because it's very much an option for a Senate whose Democrats currently outnumber Republicans 32-17. Oh, yeah. Members also are supposed to be noncommittal about spending the rainy day fund, too.

Here, read for yourself:

Governor Gregoire’s Budget Savings Plan
October 7, 2008

Background
Governor Christine Gregoire announced October 7 that she has taken additional steps to save $330 million in the current biennium. The cuts, which impact state agencies and some programs, are necessary to compensate for a projected shortfall of $3.2 billion in 2011.

[More:]

Cost reductions include:
• Across-the-board cuts in state agencies, exempting certain programs in education, public safety and the protection of vulnerable individuals.
• A freeze on hiring, out of state travel, equipment purchases, and personal service contracts.
• Lower price for the Washington Assessment of Student Learning contract.
• Savings in Healthy Options premiums for children and adults on Medicaid or receiving TANF (Temporary Assistance for Needy Families).
• Slowing implementation of the Working Families Tax Exemption and Family Leave.

Governor Gregoire originally sought $200 million in savings to the current budget but expanded that figure in anticipation of the national economy’s continuing underperformance.

Talking Points
• We agree the state must take prudent actions this two year budget cycle to guard against the negative effects of the national economic crisis.
• Legislative cooperation will be needed to achieve these goals, and we look forward to working with the governor to pass a supplemental budget makes these reductions a reality.

• Even though we currently have a surplus and are better prepared than other states to weather this storm, we acknowledge there is a major gap between what is currently estimated for state revenue and expenditures between 2009-2011. Because these estimates are adjusted every three months, we don’t know what the shortfall will be.
• Again, the Legislature’s job next session will be to work with the Governor to eliminate the shortfall and balance the next two-year budget.
• Because of Governor Gregoire’s budget actions October 7 and in August, we have saved $430 million in the current budget leaving the state with more than $850 million in the bank.
• We should see $605 million in additional savings in the next biennial budget.
• Thanks to the governor’s actions, we are in a much better situation for the next budget. We are in better shape than most states because we have saved to smooth out the bumps in the economy.

• The savings protect critical investments we have made since 2003 in education, health care, community safety, and economic development.

Big picture
• The state’s economy has been hurt by the federal government’s lack of oversight of the country’s financial system.
• The national economic turmoil has caused high fuel and food prices, rising unemployment, and slowing retail sales. This is being felt by all Washingtonians as well as state agencies and institutions.

Q&A

Q: Why was the cut level increased from $200 million to $240 million?

A: The economic turmoil shows no sign of slowing. As a result, revenues will likely continue to decline. The governor wanted to build in additional savings to help us today and in the next biennium.

Q: Are you cutting education?

A: No, we are not cutting education programs. We are moving money from the Education Legacy Account to the General Fund. That account, funded by the estate tax, has been bringing in more money than we budgeted for.

Q: A lot of these things don’t look like cuts…aren’t you just scooping up extra money?

A: In many cases, there is money left over in an account because we have done a good job of cutting back and spending more efficiently. Rather than spending that money for some other purpose, we are pulling it into reserve and will save it for next biennium.

Q: Isn’t there a huge deficit looming?

A: The fact is we have more than $850 million in the bank today because of the governor’s actions. Like over half the other states, the suffering economy has impacted our revenue outlook and ability to deliver services. Today’s actions also will result in $605 million in additional savings in the next biennial budget.

Q: Why did the governor and legislature keep spending so much if you knew there was a deficit looming?

A: Good budgeting and good governing reflect and respond to the real needs of citizens, which grow and develop and change over time. That’s what we’ve done and will continue to do.

Because of the unpaid bills the Governor inherited when she took office, we have invested in important priorities to improve the long-term health of our state. I ask others where they would invest. Would they not make investments to reduce class size? Would they not make investments to improve teacher pay? Would they not make investments to improve the health care of tens of thousands of Washingtonians? Would they not make investments to improve public safety? Would they not make investments to create tens of thousands of new jobs? If not in these areas, then where?

Since the drop in revenue receipts we have taken steps to minimize spending where possible. We have asked state agencies to control costs by instituting a freeze on hiring, out of state travel, equipment purchases, and personal service contracts. Coupled with today’s actions we have saved a significant amount of money—$850 million.

Q: Are you acknowledging there will be a shortfall next year?

A: While we currently have a surplus, the national financial turmoil is hurting Washington working families and Washington’s economy. As a result, revenue receipts are down and it appears likely we will face a shortfall in the next biennium. We will have a clearer idea about how much that shortfall will be when the November forecast comes out.

We are taking steps today to address a projected shortfall. In addition to the savings in the current budget, these actions will save an additional $605 million in the 2009-11 budget.

Q: What do you expect the November forecast to be?

A: It is still too early to tell, but the trend looks negative, due to the lack of consumer confidence caused by the national economic turmoil.

Q: Will you try and use the rainy day fund?

A: We are pleased we have the rainy-day fund, but we would rather not have to use it and will make that assessment once we get the final revenue forecast in November before writing the next budget.

Q: Are you planning to raise taxes?

A: The governor has said no.

Q: What can the federal government do to help our state cope with these economic challenges?

A: We would like to see the federal government make critical infrastructure investments in Washington, extend unemployment benefits to workers, and help people affected by the foreclosure crisis.

Q: Is Washington in a recession?

A: No, but the national financial turmoil is hurting Washington working families and Washington’s economy. Despite this, Washingtonians should be reassured that our state is prepared to weather this storm.