Patricia Terry believes dramatic changes are needed to staunch the financial crisis in Washington, while Barbara Bailey is determined to rein in state spending.

Democrat Terry is challenging Rep. Bailey (R-Oak Harbor) for Position 2 in the 10th Legislative District this November. The district includes Camano and Whidbey islands, Stanwood, and the surrounding areas north to Burlington and south toward Marysville.

The candidates recently spoke on a range of issues including the economy, healthcare, ferries and the possibility that Island County might approve a public utility district this fall to buy out Puget Sound Energy.

With just a few weeks to go, Terry is optimistic about her chances to unseat six-year veteran Bailey.

But the tone and tenor of the campaign has changed.

“With the economy in a bit of free fall, fundraising has become quite a challenge,” she said. “There’s a lot of fear out there, lots of folks don’t understand how things got so bad, so fast.”

She has found that the rapid change in the economic outlook has surpassed all other issues on the campaign trail.

“It’s taken people by surprise and, especially for the many retired in the district, they’re worried about their pension plans,” she said.

Terry said the state needs to research alternative funding ideas as soon as possible.

“Generating income beyond taxation has to be a priority,” she said. “I favor long-term solutions that focus on our local situation.”

For example, she has an idea for a new bonding system that would allow investors, small and large, to take advantage of three areas within the state, a timely strategy considering the bailout mess on Wall Street.

“People could put their money into our state’s infrastructure such as bridges and roads, education or healthcare,” she explained. “This wouldn’t be philanthropy; folks would expect, and get, a return on their investment.”

But if something went wrong, the buck stops in Olympia, not New York City.

“You’d know where to go and whose door to knock on for answers,” Terry added.

She’s also concerned about the focus on the presidential race and the contest for governor.

“Both of those races are taking up a lot of energy,” she said. “People need to be sure and examine the entire ballot when they cast their vote.”

She said she’s encouraged by the response to her campaign from the endless number of public forums she has attended, most recently at South Whidbey High School on Wednesday.

“The crowds are so energizing, even after a long day,” she noted.

She has received support from local county Democratic parties and the House of Representatives Democratic campaign committee.

“The fact that the Democratic party has endorsed me has been a huge help,” she said. “Their good wishes and financial support has made all the difference.”

Terry, a registered nurse for more than 30 years, said her experience in healthcare and management has been a real asset.

“The economy and healthcare are the two concerns

I hear about most on the campaign trail,” she said. “Either not having insurance or being underinsured, plus overall job insecurity are things I hear about every day.”

She said she supports the idea of a public utility district for Island County.

“All utilities should be public,” she said. “I’m glad it will be on the ballot for the voters to decide.”

Terry has been ringing doorbells in parts of the district that have traditionally voted Republican in the past.

“I purposely seek out people with different political views because

I know I’ll be representing them in the future,” she said confidently.

She said that the problem with the ferries — notably the Keystone-Port Townsend run — highlights a larger issue.

Terry said the ferry system should be converted into its own state agency, apart from the state Department of Transportation, and maintenance checks and a replacement schedule should be implemented and acted upon.

“Before, I don’t think the ferries were seen as a highway system. They are now, and the silver lining is this has changed mainlanders’ concepts of the ferry system,” she said.

Though she earned a master’s degree in public administration, Terry said her real strength lies in her ability to relate to people, something she learned as a nurse.

“Nurses are good listeners, and I’m listening closely to what people are saying.”

Bailey, too, has shifted her focus to the economy. This is her fourth election campaign, and she said her concerns about government spending are reaching a receptive audience.

“Our governor and the legislature simply must control state spending,” she said recently. “If the state can’t control spending, it can’t control taxes on our citizens.”

She added that addressing the state’s $3.2 billion budget shortfall is the key to avoiding tax increases and creating more jobs.

She doesn’t hesitate to blame the governor and a Democrat-controlled legislature for many of the state’s ills.

“The Democratic opposition in the legislature enjoys making promises to the people, but without a way to pay for them, the promises won’t become a reality,” she said.

Bailey said there should be a clear funding mechanism in place for any state or federally-mandated program. She explained that when a bill is passed, there is supposed to be funding within the bill. She said bills are run through the legislative process that says if funding is absent, the law is null and void.

“So the Democrats make the promise, pass a bill and it goes nowhere,” she said. “There is a disconnect between laws passed and the budget.”

One of her pet peeves is unfunded mandates, which she describes as the Democratic opposition in the legislature making promises to the people without funding them. “The promises won’t become a reality and that’s wrong,” she said.

Unlike her opponent, Bailey refused to openly support a public utility district in Island County.

“People need to study the issue, see how much it will cost initially and for long-term maintenance,” she said.

On the other hand, she has lots to say about healthcare.

She has found that fewer than 50 percent of kids eligible for current state programs are not using them.

“The way to fix the system is to enact insurance reforms through a free marketplace,” she explained. “We can achieve lower cost through better technology, which includes the transfer of information.”

She said that whenever she goes from one doctor to another, it takes forever to process the paperwork.

“If you improve communication between doctors, their offices and hospitals, you will reduce costs,” she said.

Another topic she’s mad about is the ferry system.

“I just heard that it will be another two months before the state submits a bid for new boats because of more design modifications,” she said. “Maybe we’ll have a boat on the Keystone run by April 2010, maybe not.”

She blames the sluggish nature of government contracting.

“No matter what the project, there always seems to be a delay,” she said.