The Capitol Record (the state's news blog) posted Gov. Chris Gregoire's video response to the $2.6 billion budget shortfall. They write:

Gregoire explains that there are $2.6 billion more in cuts necessary — but the cuts can’t be made from 70 percent of the budget, which are protected areas (like school funding) or federal pass-through money designated for specific programs.

“What is in that 30 percent we can cut? It’s programs, like public safety … financial aid, mental health services. It’s care for seniors … if we cut their programs, what do they do? The answer is, they go homeless. Those are not good options,” she said.

No mention of new taxes. (Morning Fizz reported last week that Gregoire owned up to the reality of the need for new revenue during a Seattle post-election panel in Fremont.)

The $2.6 billion is a torpedo after Olympia patched up a $9 billion hole in the budget earlier this year.

Last session, trying to meet the then-current level of state services for the 2009, 2010, and 2011 budgets would have sent the state $9 billion into the red. To balance the budget, Olympia made $3.6 billion in real cuts (mostly from health care and higher education), deferred or transferred around $2.3 billion in costs, and relied on $3.2 billion in Obama stimulus money. The result was a $33 billion budget with about half a  billion set aside as surplus.

Now, thanks to the recession, even meeting that scaled-back budget would put the state $2.6 billion in the red.

In other words, the state has to find $2.6 billion in cuts. And they can't take the scalpel to the whole $33 billion budget. There’s only about $9.3 billion of discretionary state funding eligible for cuts (including "fat" like, um, the basic health care plan). The rest of the budget, 70 percent of it, funds things like basic education requirements, federally matched programs, and stimulus-related programs.