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Mon August 8, 2011
Update: Gregoire warns of more cuts to come; credit rating stable
Governor Chris Gregoire is telling state agencies to prepare for further budget cuts because of the faltering economy. Her budget office today asked agencies for ideas to reduce planned spending by 5 or 10 percent.
Meanwhile, the Standard & Poor's downgrade of federal debt is unlikely to have much near term effect on the borrowing costs for the state. Although, S&P did deal the city of Tacoma a blow by downgrading it's credit rating on debt backed by the federal government.
Standard & Poor's assigns a AA+ rating to Oregon, Washington and Idaho state governments. That's the same credit rating the feds now have. The State of Washington's rating was reaffirmed just last month. Oregon and Idaho were upgraded to AA+ after proposing balanced budgets in the spring.
Still, Washington's governor is telling state agencies to prepare for more cuts. State budget director Marty Brown asked for ideas to reduce spending by up to 10 percent.
"It's going to be very, very tough. The economy just gets more and more uncertain. I think the agencies when they got the memo probably all went, 'Not again!'"
Brown says it is too soon to say whether state lawmakers will have to return to Olympia for a special session to deal with the budget. A new revenue forecast is due out next month, and Brown says he is not optimistic about what it will show.
Washington state lawmakers already cut some four-and-a-half billion dollars in projected spending during the legislative session that ended a couple months ago.
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