The state is running out of money and legislators from the 10th district are scrambling for ways out of the financial hole.

Three legislators — Sen. Mary Margaret Haugen (D-Camano), Rep. Barry Sehlin (R-Oak Harbor) and Rep. Barbara Bailey (R-Oak Harbor) — came to South Whidbey Saturday morning to deliver the bad news. In the midst of a legislative session expected to find more than $2.5 million in cost savings by the end of spring, the three did not have much positive news for about 30 voters who turned out for a “town hall meeting” at the Bayview Senior Center.

Rep. Sehlin was blunt with his audience. He said to even make up a $1 billion shortfall, the legislature would need an additional $450 in revenue out of every household in the state. That number was not adjusted to include business and industry tax contributions.

His prediction for the biennial budget the legislature must pass this session was this: A portion of the cost for services will have to be bourne by counties, property tax payers and private agencies.

“The reality is there is going to be a number that the county is going to have to absorb,” he said.

The meeting followed a forum held the previous Thursday at which local mental health, public housing, juvenile court and drug treatment officials discussed proposed state cuts in health and human services areas. One official at the meeting said one proposal could cut $40 million from mental health services alone. On Saturday, Rep. Bailey said another $60 million could be sliced out of children and family services.

A member of the state House’s health and family services committee, Bailey said some of these service may have to be provided by “faith-based” organizations. She said the legislature should look at what services are available from these organizations and consider eliminating similar state-funded programs.

“One size does not fit all,” she said.

Sen. Haugen had a more sober assessment of the situation. She said the reality is that many people will not receive the services they need, which will wind up costing taxpayers more money.

“We all know we treat most of our mentally ill in prisons,” she said.

Cutting expenses and avoiding new taxation was something all three legislators seemed to get behind. Haugen said alternatives, like the omnipresent idea of imposing a state income tax, “will not fill the bucket.”

Ray Gabelein, a member of the South Whidbey Board of Education, agreed that new taxes are not a good idea, even as he urged the three legislators to “put education first” as they work on the budget.

“We can’t tax our way out of recession,” he said.

At the same time, she said the state’s transportation budget — which is being considered by legislators along with the general fund and capital budgets — is in serious trouble since the failure of Referendum 51, a measure that would have increased the state gas tax to fund transportation construction and maintenance. Without more money, she said, ferries, highways and public transit will start grinding to a halt.

“We’re going to try to pass something,” she said.

The legislators did not shift blame for the budget shortfall onto recent tax-cutting initiatives, instead blaming a slow economy and lower-than-expected tax revenues. Asked whether the legislature might try to make up some of its losses by putting a “freeze” the initiatives — as they might on initiatives calling for more funding for schools and for cost-of-living adjustments for teachers — Sehlin asserted that initiatives are only a problem for counties. He said the general fund budget lost only about $100 million in general fund income due to I-695, a measure that reduced the price of automobile tabs.

“That’s not going to solve this problem,” he said.

Saturday’s meeting was one of three on Whidbey Island the legislators attended. They said they called the meetings to take feed back on current issues and to give voters a progress report on the legislative session.