Locke urges investment

OLYMPIA — Gov. Gary Locke, still aglow from Boeing’s decision to assemble the 7E7 in Washington, on Thursday declared "the state is turning around" and urged lawmakers to invest millions in higher education and tax breaks for the high-tech industry.

The state’s long budget crisis is over, the governor enthused.

Locke, shifting cautiously into the spending mode after chopping the budget during the now-ending recession, unveiled a $193 million supplemental state budget that plows more cash into colleges, health care, prisons and other core state services.

The higher education push, which would add more than 5,000 enrollment slots and finance new campus buildings, is the top priority of Locke’s Competitiveness Council. The governor formed the panel to entice Boeing and others to expand in Washington.

Locke also urged the Legislature to pass $74 million worth of tax incentives for high-tech research and development and to spur manufacturing in rural areas. The tax breaks are set to expire next year.

After spending much of his second term in a cutback mode, the governor was clearly happy to be proposing expansions. The new budget has no cuts or elimination of programs, but adds millions for "the programs people want most" and those designed to spur the economy.

Locke does suggest early release for about 500 nonviolent prison inmates who are behind bars for drug offenses, and reduces the number of low-risk inmates under post-release supervision by about 2,000. This is expected to save $18 million.

Locke uses federal dollars and a big chunk of the state’s $544 million reserve fund to keep the budget in balance without new taxes. Under his plan, the surplus dwindles to $172 million, less than 1 percent of the state’s overall $23 billion, two-year budget.

Locke indicated he thinks the state’s budget crisis is over, but insisted that his "very thoughtful and orderly approach" to budgeting still shows fiscal discipline.

"The economy is turning around," he told a news conference. "Our state government is on solid footing and our transportation system is on the mend. And the Boeing decision to land the final assembly of the 7E7 in Everett is proof that Washington is a great place to do business.

"In short, we’re in pretty good shape," particularly when compared with other states in the West.

Locke spoke just hours before California Gov. Arnold Schwarzenegger formally declared his state is facing a fiscal crisis and invoked emergency powers. Oregon has struggled as well, and voters there may cut more than $800 million in taxes this winter.

Locke insisted that the state can — and should — afford the investments he outlined to help kick start the economy.

Earlier this year, the Democrat teamed with legislative conservatives to pass a $23 billion budget that required spending cuts, salary freezes and suspending voter-approved spending initiatives.

"The tough decisions we made in the last legislative session are paying off," Locke said. "You will have to go to California or some other state for a story about a budget crisis. We don’t have one here."

Budget hawk Bob Williams, president of the Evergreen Freedom Foundation, a free-market think tank, said Locke deserved praised for his "Priorities of Government" approach to tough-nosed budgeting, but said the governor’s latest effort reverts to the old ways of looser spending controls.

"We didn’t see the fiscal discipline this time," he said in an interview. "He gives us a deficit of $450 million by spending that much more than he takes in this biennium. Next biennium, the deficit will be more than $1 billion."

Locke leaves far too skimpy a reserve fund, he said.

Other reaction to Locke’s new budget rewrite was mixed.

State school chief Terry Bergeson, a Democratic ally, found Locke’s K-12 budget lacking a long-term vision for better funding of public education. Locke said he’s hoping to support a citizen effort for a voter-approved financing plan for preschool through college.

Health care advocates and the anti-poverty lobby praised Locke’s proposal for lower premiums for kids’ health care, but urged the Legislature to erase the monthly premiums altogether.

David Rolf of the Service Employees International Union praised Locke for endorsing a $47 million collective-bargaining agreement that would provide a 50-cent-a-hour wage increase for home health care workers who take care of state clients.

Land Commissioner Doug Sutherland complained that Locke left out funds to allow the state to open Department of Natural Resources lands to recreation.

Michele Radosovich praised Locke for boosting funds for legal services for the poor by $3.9 million.

Locke said his budget rewrite amounts to modest "midcourse adjustments" in the two-year spending plan that finances schools, health care, parks, colleges and other state services until June 30, 2005.