PROSSER -- Gov. Chris Gregoire told a group of Mid-Columbia growers that the state already faces a $1.5 billion shortfall in the 2013-15 biennium.
And she doesn't think the two leading candidates to replace her as governor have the right ideas to fix the problem.
Gregoire, who is not seeking re-election, will end her second term in office at the end of this year, and likely will be replaced either by Republican Attorney General Rob McKenna or Democrat Jay Inslee, a former congressman who resigned his Seattle-area seat earlier this year.
"I have listened to both gubernatorial candidates and they're both dead wrong," Gregoire said during a stop in Prosser on Thursday.
Today is the second day of a two-day Mid-Columbia tour by the governor that on Thursday included stops in Yakima, where she met with a work group planning for the Yakima River Basin Water Enhancement Project; Sunnyside, where she met with growers at denHoed farms to survey damage from a recent hail storm; Lamb Weston in Richland for a tour of the company's potato packing operation and a meeting with members of the Washington State Potato Commission; and Prosser, where she toured Washington State University's Irrigated Agriculture Research and Extension Center and met with growers specializing in several types of crops.
Her tour continues today with ground-breaking ceremonies in Benton City for construction of a pump back station at Red Mountain and Burbank for the new Railex storage warehouse. She also will make a second visit to Prosser to tour the Walter Clore Wine and Culinary Center.
During the Prosser conversation, she encouraged growers to write to their representatives in Congress to stop the $110 billion in automatic budget cuts, known as sequestration, scheduled to go into effect in January as a result of the budget supercommittee's failure to reach an agreement on reducing the federal deficit.
"It cannot -- absolutely cannot -- go into effect," Gregoire said. "I personally believe it will trip us into a recession."
Among the cuts would be up to a 10 percent reduction in the defense budget, which could affect defense cleanup projects such as Hanford.
Of personal interest for farmers are cuts to the U.S. Department of Agriculture as a result of sequestration that could affect agricultural research such as that performed at the Prosser extension.
Vicky Scharlau, executive director of the Washington Wine Grape Industry Foundation, said those research dollars are invaluable not only to the wine industry but to tree fruit growers and other types of farmers in the state.
She noted that a researcher at a university in California has found a correlation between a slowdown in public funding for research and a slowdown in agricultural production.
Gregoire said allowing sequestration to happen likely would make a bad budget situation in Washington even worse.
Her $1.5 billion deficit estimate was based on a projected $500 million shortfall in revenues compared to project expenditures, and $1 billion to meet the K-12 education mandate handed down by the state Supreme Court in the McCleary lawsuit.
"I can probably get rid of $500 million," said Gregoire, who will write her final budget proposal later this fall. "I can't pay the $1 billion price tag for K-12."
She said she doesn't believe that the economy can grow enough to provide sufficient revenues to cover the cost of the McCleary mandate, nor can another $1 billion be cut from the state budget -- the approaches so far advocated by Inslee and McKenna.
"The only way to get out of this is to find sustainable long-term funding for education," Gregoire said.
Gregoire said the best way to strengthen the economy is to put money back into higher education, but she doesn't believe the Legislature has a good grasp on how much higher education can drive the economy.
"What I recommend to you all is to build advocates for higher education," she told the growers.
She suggested inviting legislative leaders and budget writers to see firsthand the kind of research going on at the Prosser extension and how it can translate into products for the market that increase efficiency and reduce risks to farm workers.
"Show them. You will get mileage for it, you all," she said. "We're going to have a tough go next biennium. A billion is a big honkin' bill. If we don't do it, we're in violation of a Supreme Court order. ... But we can't pit higher ed against K-12. That is my greatest fear."