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Washington State Schools Anticipating Switch From Fiscal Surfeit to Shortfall

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Less than a year after waging a bitter fight with Gov. Booth Gardner over use of an anticipated $611-million budget surplus, Washington State educators now are having to contend with the potential impact of a projected budget cruch.

As the Pacific Northwest's once-booming economy slows, fiscal analysts late last month revised downward their estimates of state revenues for the second straight quarter.

If present trends continue, the state could face a revenue shortfall of as much as $750 million for the fiscal biennium that begins in June, analysts warn.

The projected revenue shortfall is already leaving its mark on state education programs. Governor Gardner has asked the education department and other agencies to propose ways to trim more than 10 percent from their budgets for fiscal years 1992-93.

Observers say new state education initiatives funded during the years of budget surpluses could be vulnerable during a downturn. The department, for example, has proposed reducing its budget by $26.7 million by eliminating the second year of a $55-million block-grant program to school districts for discretionary programs.

The push for austerity represents a marked turnaround from the situation early this year, when the Washington Education Associ4ation staged a one-day walkout to demand that the budget surplus be used for a pay raise for teachers. Governor Gardner had proposed to divide the extra money between one-time expenditures and the state's "rainy day" fund. (See Education Week, Jan. 10, 1990.)

Competing for Scarce Resources

According to the latest budget projections, the state will receive $25.6 million less in revenues than originally expected for the remainder of the current biennium, and will take in $38.8 million less during fiscal 1992-93.

Even so, analysts noted, the state is still expected to end its current biennium with a $700-million surplus.

But the prospect of trouble during the 1992-93 biennium is substantial, observers said. If the state fulfills all the commitments it made during the current fiscal cycle, and gives teachers and other state employees pay raises of about 4.5 percent, the state could find these demands outstripping projected revenues by some $750 million, they said.

"The economy is still growing, but demands are also growing," said Teresa Moore, a spokesman for the wea

"There is going to be a lot of competition for scarce resources," said Kris Van Gorkom, the assistant executive director of the Washington Association of School Administrators.

Probably the largest funding de8mand stems from growing classroom enrollments, observers said. Largely seen as a by-product of the state's strong economy, precollegiate enrollment has grown from about 750,000 in 1985 to nearly 840,000 this school year. Enrollment is expected to rise to nearly 900,000 by the end of the 1992-93 biennium, according to state officials.

As the statewide walkout last winter showed, state teachers also have become increasingly vocal about salary raises. At an average of $31,876 last school year, Washington teacher salaries rank 23rd in the nation--a marked decrease from seven years ago, when state teachers were the fifth highest paid in the country.

To help pay for more education spending, the wea is calling for new taxes.

But observers see a strong anti-tax sentiment in the state. Governor Gardner is not expected to include any proposals for increasing revenues in the budget package he is to release later this month. And the legislature elected last month is generally viewed as being slightly more conservative, and more reluctant to raise taxes, than its predecessor.

"I don't think the mood is that positive when it comes to taxes," said Perry Keithly, the education department's governmental and budget liaison. "Asking people to raise taxes is like asking people to cut off their arm."

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