State Sen. Mary Margaret Haugen’s message to more than 60 people at a town hall meeting in Coupeville Saturday was to brace for another round of hefty budget cuts.

The Legislature trimmed the budget during its special session in December, then made more cuts in February. And before it convenes again this spring, lawmakers expect to chop a whopping $5 billion from the 2011-2013 biennial budget.

“We’re in a recession, lets face it,” said Haugen, D-Camano. “Nobody wants to say that but it’s time to say we really are in a recession. It has not been this bad since post World War II.”

According to Haugen, more than 200,000 jobs have been lost in this state with only about 20,000 recovered. The Legislature has made billions in cuts but the problem just keeps getting worse. This year, the situation is so severe that shutting down the state’s universities and community colleges would only address half the shortfall, she said.

As has been common over the past few years, the status of Washington State Ferries was a hot-button issue at the town hall meeting. Ralph Young, a Coupeville resident, questioned why the agency claims such a small portion of the state’s total transportation budget of about $8.5 billion and yet is constantly struggling with lack of funding. Why aren’t other transportation projects suffering, he asked?

“All we hear about is ferries are ready to fail because there is not enough money,” Young said.

Haugen, chairwoman of the powerful Senate Transportation Committee, responded by saying that was “a very good question and we’re in trouble with preservation and maintenance too.” But she went on to say that ferries are inherently expensive to operate, and that no transportation service should be judged as being more important than another.

However, Haugen put much of the blame on mismanagement of fare revenue, with agency leaders choosing to invest in the construction of expensive ferry terminals. The division also seems to be overweight with “middle management” employees.

“Let me tell you, they have a whole lot of people working there and we’re not quite sure what they are all doing,” she said.

Haugen is working on three ferry reform bills. One deals with labor and union contracts, another looks at reducing middle management, and the third would establish a 25-cent surcharge on fares that would be dedicated solely for new ferry construction. It is expected to create $5 million every year.

The same bill also seeks to exempt the state from having to pay sales tax on fuel purchases, which is by far the agency’s largest annual expense. Haugen claimed that it would put about $300 million back into the department’s coffers each biennium.

Haugen also reiterated a longstanding promise that the Salish, the second of three Kwa-di Tabil class ferries being built, will go into service on the Coupeville to Port Townsend ferry route during the summer months. But not every at the meeting was so sure.

“You’re saying we’re going to have another ferry … fiddlesticks,” said Al Bowers, of Coupeville.

Ferries is planning to send the boat to the San Juan Islands as a cost saving measure, and Bowers said he doubts whether even Haugen has the power to thwart the plan. If the vessel is needed more on that run and could save the agency money, that’s where it’s going to go, he said.

Haugen said the Legislature has the power to make the rules about what ferries serve on what routes. She knows the Salish will serve on the Coupeville to Port Townsend route during the summer because that’s what will be outlined in state law, she said.

But that’s not to say that there aren’t a lot of hard decisions ahead. Much of the focus in Olympia will be the weighing of services deemed essential to those considered non-essential. Haugen’s personal priorities lie in education, public safety and the preservation of social services, such as those that address special needs groups and seniors.

Services such as the Legislature’s print shop, a 100-worker agency founded in 1854, are being considered for closure as is the merging of departments like the Washington Parks and Recreation Commission and the Department of Natural Resources.

“State Parks has really got problems,” Haugen said.

Although no Whidbey Island parks are facing closure, Haugen said the agency is so strapped for cash that it’s very possible that the Legislature will seek put back into place a $5 use fee. One existed years ago but was removed due to public outcry.

Nothing has been decided yet but Haugen stressed that no state agency or division will go untouched. All Washington residents should expect to feel the repercussions of the 2011 session.

“There’s going to be cuts and it’s going to be felt,” Haugen said.