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State Treasury Response to Budget Shortfalls

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With budget cuts looming for the state, Washington State Treasurer Duane Davidson reminds of his office’s contributions to reducing budgetary gaps in the General Fund, which now also include eliminating cost of living increases for many of his staff.

“My highest priority is upholding the value of fiscal conservative leadership for the Treasury. Although we are not required to follow the Governor’s recent cost cutting mandates, we have continuously gone above and beyond on our own accord,” Treasurer Davidson said.

The Office of the State Treasurer, which serves as a bank for the State of Washington, operates out of its own revolving fund completely separate from the state’s General Fund, yet the office is adopting measures that will align with the Governor’s request to halt a scheduled general wage increase (scheduled for July 1) of 3% to Washington Management Service, Exempt Management Service and other exempt employees earning more than $53,000.

With 60.5 full time equivalents (FTEs) responsible for ensuring the safety and security of state finances, the agency has operated at 7.5 FTEs, or 11.0% below the allotted level of 68 FTEs for years.

In addition to operating effectively at below FTE allotments, the agency is regularly under budget, and has twice in the last year cut its own service fee to provide additional savings to the state. In light of current needs, the most recent reduction in April brought the service fee down to 0.20%, its lowest point in state history.

These two cuts translate to significant savings for the recipient funds which softens the economic impact due to lower interest rate projections. In a letter to the Governor’s office in May, Treasurer Davidson requested that these service fee reductions be recognized as part of the overall calculation of the state’s operating budget.

“While these measures will be extremely beneficial to the state, alone they are not enough. I contend that a call for an emergency legislative session should take place as soon as possible to see what the Legislature can do. This type of severe budget reduction traditionally derives from legislative action rather than such unprecedented executive order as we are seeing now,” Treasurer Davidson said.