OLYMPIA — Gov. Chris Gregoire, facing a possible budget deficit of more than $2.5 billion, said Thursday she’s ordered state agencies to dig for savings — with higher taxes a last resort in her budgeting plans.
In comments about the upcoming 2009-11 state budget, Gregoire also said voters should have the final say on tax or fee increases, if any are needed to balance the budget.
“I said it four years ago, I’ll say it again now: The last thing you want to do is go for taxes when you’ve got an economic downturn,” Gregoire said.
The Democratic incumbent’s penny-wise words were panned by her Republican opponent in this fall’s election, former state Sen. Dino Rossi.
Rossi’s campaign said that, after sounding like a tax foe in the 2004 campaign, Gregoire proposed a raft of new taxes and approved the Legislature’s even larger $500 million tax package for the 2005-07 budget.
Throughout the last legislative session and in the months since, Gregoire and most top legislative Democrats have been vague about the prospect of tax hikes.
After Gregoire’s budget office declined to estimate what the 2009 balance sheet might look like, Republicans asked nonpartisan Senate budget staffers to draw up their own projections. The latest version predicts a budget hole of close to $2.7 billion.
Gregoire doesn’t put much stock in those numbers, but has said a $2 billion shortfall is possible. Rossi and the GOP have hammered her on the topic, saying taxpayers are sure to feel the pinch with Democrats in control.
But on Thursday, Gregoire sounded rather thrifty. She said the early work of putting together state agency budgets has been focused on holding the line on spending, with only high-priority, proven programs in play.
“So they’re going through, and they will literally put priorities down and at some point along the line, the line will be drawn,” she said.
Asked if that meant tax or fee increases are a last resort in her budgeting plans, Gregoire replied: “Absolutely.”
The governor added that she sees higher taxes as a moot point, since a sagging economy means lawmakers are unlikely to meet a two-thirds vote requirement for raising taxes.
Voters also have ordered that tax hikes go to the ballot for at least an advisory vote, and Gregoire said she supports voter approval.
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