Making Changes Families Can Count On: Governor Gregoire Invests to Stabilize Spending and Save for Tomorrow

For Immediate Release: December 12, 2006

Rainy day fund will help to stabilize state spending and get the state off the rollercoaster cycle of budgeting

SEATTLE � Governor Chris Gregoire today at a Washington State Employees Credit Union in Seattle announced she will get the state off the spending rollercoaster by saving money today in a new rainy day fund so that Washington is better prepared for possible economic downturns in the future.

�The Washington rainy day fund will work just like your family savings account. We will build it up with automatic deposits when times are good and we can feel secure knowing that there is extra money available to meet basic needs if times suddenly turn bad or if a disaster strikes,� said Governor Gregoire.

For too long, government spending has been on a rollercoaster ride � funding programs when times are good, then drastically cutting those programs when times are bad, only to have the cycle begin again. The economy will continue to run in cycles, but our state budget does not have to mirror these booms and busts.

In last year's supplemental budget, Governor Gregoire kept her commitment to get off the budget rollercoaster by setting aside $947 million to help make future pension payments, pay for growing health costs for children and low income adults, and continue to reduce class sizes in public schools. This year, Governor Gregoire proposes to keep our savings secure with constitutional protection.

�Washington citizens want off of the budget rollercoaster,� said Senator Joseph Zarelli. �I�m excited the governor has decided to lend her support to the constitutionally protected rainy day fund. Setting aside money in preparation for a slowing economy makes perfect sense, regardless of political affiliation.�

Governor Gregoire�s rainy day fund will:

• Start off with $262 million that Governor Gregoire will deposit as a part of her budget proposal;




• Grow with future automatic deposits of one percent of the state�s general revenue each year � about $150 million annually;




• Be constitutionally protected so that it can only be dipped into if a three-fifths vote of the Legislature authorizes it;




• Be available by a majority vote of the Legislature during a natural disaster or if the Governor has declared a state of emergency;




• Keep government accountable by ensuring that, even in tough times, we can keep our promise to Washingtonians to have safe streets and neighborhoods, affordable health care, stunning natural scenery, world-class education and a thriving economy.

�Saving for the future is one of my top priorities, just as it is for every Washington family,� said Governor Gregoire. �This rainy day fund will help our state ride out the natural ups and downs of the economy while still delivering on my promise to Washington students and families.�

Governor Gregoire last December promised to make targeted investments that make a real difference for Washington families and set aside some new revenue to address critical needs next year in health care and education. She did just that, saving substantially for the future and putting aside $947 million to help make future pension payments, pay for growing health costs for children and low-income adults, and continue to reduce class sizes in public schools.

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