Gregoire’s budget offers no easy way out of deficit

OLYMPIA — Gov. Chris Gregoire on Wednesday proposed a state budget she said she’d never sign and talked about something she’s said she wouldn’t do — raise taxes.

The plan put forth by the second-term Democrat erases much of a $2.6 billion deficit by ending major programs serving the state’s poorest and most vulnerable residents and slashing funds for public schools and college students.

It eliminates the Basic Health Plan, a state subsidized health insurance program for 65,000 low-income individuals, and the General Assistance-Unemployable program which provides cash grants and medical care for some of the state’s most destitute.

Her proposal drains the pot of financial aid for college students and eats up remaining dollars for smaller classes in public schools. No money is allotted to rural schools through levy equalization and it zaps a slew of programs aiding the elderly and those in foster care.

Overall, it rebalances the current budget that runs through mid-2011 by making $1.7 billion in spending cuts and tapping reserves and other government funds to cover the rest. As required by law, it blots out the red ink using only revenues now collected by the state.

For Gregoire, it’s too painful a spending plan for the state to live with and for her to sign.

“Let me be very clear: I do not support this budget,” she said. “As required by law, it is balanced. For me, it is unjust.”

She said she’d issue a second version in early January with her ideas for more revenue. She estimated it would take $700 million to cover programs she wants preserved while still carving $1 billion from government spending.

Some Republicans found appealing elements in the proposal. They also wanted to see a budget she preferred as they insist the deficit can be eliminated by changing how government is run rather than by how much it can raise.

“It doesn’t look as bad to me as it does to her,” Rep. Gary Alexander, R-Olympia, the ranking Republican on the House budget committee, said of the plan. “It certainly looks like this is an opportunity the governor is using to get support for tax increases.”

Sen. Joe Zarelli, R-Ridgefield, Alexander’s counterpart on the Senate budget writing panel, said he was disappointed to “get a budget that is woefully under-thought-out because at the end of the day she’s going to do a budget looking at new revenue.”

Gregoire pledged in two campaigns to not raise taxes. Last year she said any tax increase would hurt the state’s ability to recover from the recession.

Yet there she was Wednesday making her case for raising revenue with a string of examples of how individuals, communities and businesses would suffer if all the cuts in her proposed budget were carried out.

She didn’t have specifics on how to raise the money. She said she’ll look at closing tax loopholes, ending tax exemptions and possible new or higher taxes. She sounded opposed to increasing the property or business and occupation taxes but willing to consider a boost in the sales tax. A penny increase in the sales tax would raise around $1 billion a year, according to estimates by the Department of Revenue.

“I’m struggling with the sales tax. I’m not going to take it off the table, but I’m struggling with it,” she said.

Shortly after she finished, teachers, health care workers and those supervising programs for foster children and seniors held a news conference at which they said the proposed cuts would have devastating effects on those they serve.

Sandeep Kaushik, spokesman for the new Rebuilding Our Economic Future Coalition, said Gregoire’s budget proposal is unacceptable and would lead to a “veritable tsunami of heartbreak.”

Neither he nor any of the 10 people who spoke at a news conference endorsed a new or higher tax.

“It’s too early at this point to know what type of proposal and what sum we’ll organize behind and support,” Kaushik said. “There are a lot of options on the table.”

Democrats hold the majority in the House and Senate and their leaders have said tax and fee hikes will be debated next session.

Senate Majority Leader Lisa Brown, D-Spokane, said Wednesday she was glad the governor didn’t issue a second budget with specifics. It shows she wants to work with legislators and citizens on a “real plan that gets our votes and her signature.”

Brown said she’ll be interested in what does emerge from the governor next month.

“It’s clear that more revenue is needed to avoid putting our values, our future and real people at risk,” she said. “The governor has said that this is the first book in a series of two. Like many others, I eagerly await the sequel.”

Reporter Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com.

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