Gov. Gregoire signs the first laws of 2010

OLYMPIA, Wash. — Gov. Chris Gregoire on Monday signed into law a trio of bills meant to trim state expenses and said she’s still finalizing a tax-increase plan to rescue state programs from budget cuts.

The three savings bills — the first to be enacted from the 2010 Legislature — would make only modest cutbacks compared to the state’s $2.8 billion budget deficit.

But Democratic leaders put the “early savings” package on a faster-than-normal path to approval to set the tone for further state spending cuts that will be part of the final budget solution.

The major savings, about $45 million, come from a bill that extends bans on hiring, service contracting, out-of-state travel and larger equipment purchases — with some exceptions.

A second bill bans performance bonuses for many state workers, although some higher-paid employees are exempt, while the third bill extends a wage freeze for many nonunion state employees.

Lawmakers originally intended to include state worker furloughs in the savings package, but that bill ran into fierce opposition from the Washington Federation of State Employees, the state’s major employee union, and appears stalled.

Gregoire and her fellow Democrats in the Legislature are planning to enact a budget that cuts spending and raises taxes to bridge the state’s deficit, which represents the gap between current spending and expected tax revenue through June 2011.

Gregoire has proposed a blueprint that would cut about $1 billion in spending, raise about $780 million in taxes, and rely on fund transfers and other one-time fixes to make up the balance.

She also is counting on some $430 million in federal aid to help soften the blow, but still hasn’t revealed the core tax-raising options that would complete her “buyback” list of rescued programs.

Those details are expected later this week. Gregoire gave no new indications about her plans Monday, but did reiterate that she is worried about a possible general sales tax increase’s regressive nature and effect on consumer spending.

Gregoire said she was working on her tax plans Monday morning as two raucous rallies — one arguing against tax hikes, one pleading for more revenue — unfolded on the Capitol’s front steps.

“I’m trying to listen to everybody, but I tell you — it is really not particularly helpful when the only message I get is ‘Don’t cut, don’t tax,” Gregoire said. “We’re going to have to do both.”

Senate Democrats hope to unveil their own budget proposal early next week. The House would then release its budget proposal, and the three sides will head into intense closed-door negotiations to hash out a final compromise.

They’re starting to run short on time: March 11 is the last day allowed for a regular session under the state constitution, although Gregoire always could call lawmakers in for an overtime session if the work isn’t quite finished.

Senate Ways and Means Committee Vice Chairman Rodney Tom, D-Medina, said he expects to have a difficult time winning votes for a cut-and-tax budget that is sure to irk interest groups across the board.

“Right now, I have 38 votes for it. The only problem is, that’s 38 no votes,” Tom said.

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