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The roiling financial climate and statewide budget pressures could spell a busy season for the lobbyists and legislators guarding the Washington State wine industry’s interests. With the state budget deficit for the current fiscal year, which ends June 30, pegged at more than $5 million, funding to support education and research will take the spotlight.

"We’re projected to take in more money in the next biennium than ever in the past," said State Representative Dan Newhouse (Republican) from the 15th Legislative District, who is a member of the House Agriculture and Natural Resources Committee. "But if we don’t change some things on the spending side, we’re going to be short. It’s up to us to make sure that things like research are a priority for state spending."

About $10 billion of the state’s budget is discretionary spending, according to Jim Jesernig, a partner in the lobbying firm Coyne and Jesernig. He works with the wine industry to promote its interests with the legislature. The biggest piece of that discretionary budget, he said at the Wine Industry Summit, is higher education. And when the state reduces noninstructional spending, that means research.

At the direction of Governor Chris Gregoire, Washington State University already is searching for $10.5 million to cut out of expenditures allocated for the current fiscal year. That means $300,000 from the College of Agricultural, Human and Natural Resource Sciences, according to Dean Dan Bernardo, including $250,000 from the Agricultural Center. More cuts could be demanded before the fiscal year ends June 30, 2009. But the current round will continue to be felt in the future, he added, because the $10.5 million call-back becomes the new baseline for next year’s budget.

Still, he said, research remains relatively secure. "In terms of agriculture research, about 40 percent of our budget comes from state funds," he said. "The state is a big wedge, but it’s not the majority of our funding." Dr. Bernardo said the rest comes from the federal government (about $6 million), and nongovernment granting agencies and industry (about $25 million). However, a lot of the nonstate money requires a dollar-for-dollar match from state funding, he said, which makes Washington’s share of the research expenditures an economic development issue. "It’s the multiplier effect," he explained. "The state’s investment of $29 million generates $65 million."

The 2008 Agriculture Appropriations Bill approved by Congress, often called the Farm Bill, made federal money available for the first time for specialty crop research, including tree fruits and wine grapes. That is particularly important to Washington State, according to Bernardo, because the amount of money spent on research in the state is disproportionate to its stature as a producer. "We’re already short in terms of stable funding for agriculture research," he said. "We are about 28th in the nation. Obviously, we’re not 28th in terms of our size and complexity, and the diversity of the crops we produce. We’re about second."

The Farm Bill allocated $20 million over four years to support the National Clean Plant Network, which maintains virus-free plants for specialty crops, including grapes and tree fruits. That includes $237,000 dedicated to the Northwest Grape Foundation Service, also known as the Foundation Block. This is a "bank" of virus-free and pathogen-free wine grape plants maintained at WSU’s Irrigated Agriculture Research and Extension Center in Prosser, preserving them in case of a devastating weather year or a catastrophic pest infestation. The Foundation Block is also funded by assessments collected from the industry, including from certified nurseries.

New funding sources might cushion the impact of state-mandated budget cuts, but current economic woes could still mean painful long-terms effects on ag research. Tree fruits and the viticulture and enology efforts will remain a high priority, Bernardo said, but he’s concerned about protecting the infrastructure necessary to support future research from today’s spending cuts.

"More than 80 percent of our budget is people," he explained, including crop technicians and vineyard workers who provide much of the labor to support research. While he is looking for ways to meet the university’s budget directives, he said a big focus will be retaining academic staff, the tenure-track professors who will be the brains behind future research. Sacrificing that talent during a recession, he said, "in ag parlance, is like eating your seed corn."