Gov. Ferguson has released a list of budget savings options totaling $19.8 million in 2023–25 and $1.844 billion in 2025–27. According to the governor, the savings he presented today would total $3.926 billion over four years, and they are in addition to the savings former Gov. Inslee included in his Book 2 (preferred) budget proposal ($3 billion over four years).

With the combined savings, Gov. Ferguson said that this would get the state halfway toward solving the budget shortfall, which he defined as being $15 billion over four years. As I have explained, this number includes billions of dollars in new policy proposals—both the cost of the collective bargaining agreements with state employees and other new spending items that Inslee included in his proposed budget.

The savings numbers come with a huge caveat. The reductions are the result of Gov. Ferguson’s direction to agencies to identify savings. As I wrote about the directive, Gov. Ferguson asked for cuts to the level of spending in former Gov. Inslee’s budget proposal instead of to the maintenance level. I noted at the time that agencies would be able to comply with the directive by cutting policies proposed by Inslee that haven’t even been enacted. And indeed, the $1.844 billion in savings includes many “savings” that represent merely not funding something proposed by Inslee.

(One example: Gov. Ferguson books $22.9 million in savings to the Early Childhood Education and Assistance Program. The description of this savings item is, “Governor Inslee proposed an 18% rate increase in school day slots. This item reduces the rate increase down to 10%.” This is not a reduction; it is a smaller increase than Inslee wanted.)

That said, the list of reductions does include many true savings items. Gov. Ferguson said that the decisions about what savings to include were guided by “four key principles”: Finding good government efficiencies, examining appropriations for programs that have not yet been implemented, looking at whether the state should continue programs seeded with one-time federal relief money, and reconsidering recent spending increases. These are indeed good places to start.

Some examples of Gov. Ferguson’s savings ideas are:

• Furloughs for state employees (one day a month for the biennium);
• Reductions to several provider rates that had been increased in recent years;
• General reductions to equipment, goods and services, management, and travel; and
• Target reductions to higher education institutions.

Importantly, Gov. Ferguson said, “our work . . . is not done. We have not had much time to go through a very large budget. We need more time to go even deeper. That’s what we’re going to be doing for the next two months.” This is promising, and I look forward to seeing additional savings ideas that would reduce the projected maintenance level shortfall and potentially realign state spending so that it reflects current priorities.

Regarding recent spending increases, Gov. Ferguson said, “If the Legislature two years ago knew that we’d be facing a $15 billion shortfall, I’m confident some of those investments would not have happened.” When a member of the press asked him to elaborate, Gov. Ferguson said, “there will need to be . . . an assessment of how we got here, what can we change in how we budget to avoid having this conversation every two years.”

We made that assessment last year: Anatomy of the Projected State Budget Shortfall. As we concluded in our report,

The Legislature has known that revenues would come in more slowly beginning in 2023–25. Nevertheless, the state increased spending by 15.8% at a time when revenues were expected to increase by just 3.5%. On top of that, the Legislature drew down reserves to fund a level of spending unaffordable in the future.