Gregoire wants to ask voters for half-cent sales tax increase

OLYMPIA — Gov. Chris Gregoire on Monday proposed asking voters to temporarily increase the sales tax by a half-cent to help balance the state budget and avoid cuts that would shorten the school year, reduce services for the disabled and let hundreds of convicted criminals out of prison early.

The governor wants to put the three-year sales tax hike on the ballot next spring. If approved, it would raise $494 million through June 30, 2013.

While that won’t completely erase the projected budget shortfall, it will soften the blow of some of the reductions needed to solve what is now a $2 billion problem facing the governor and lawmakers.

“One-half penny to invest in education, public safety and our most vulnerable fellow Washingtonians — that’s what I’m asking for,” Gregoire said. “After three years of cuts, now is the time to build a better future for our state, for all of us to take responsibility and, yes, to spend a half-penny more.”

Senate Minority Leader Mike Hewitt, R-Walla Walla, called the proposal “insensitive” to residents struggling to keep a job and pay the bills. He said a general tax hike is not what lawmakers should focus on first when they begin their special session next week.

“The governor sent the message out like Chicken Little and the sky is falling and we’ve got to have revenue,” Hewitt said. “We’re going to look at (budget) reforms before we look at revenue.”

Gregoire on Monday issued a plan to rebalance the budget and re-establish a reserve by hacking $1.7 billion in state spending. She then put forth options she backs that would raise $835 million in new dollars, including those generated by the sales tax hike.

“I have seen the ramifications of the cuts. I cannot live with it. This is the single best idea,” she said of the sales tax hike. “It is everybody stepping up.”

The proposed increase would be the first in the state’s portion of the sales tax since 1983. It would add a nickel to every $10 purchase starting next summer and lasting until July 2015.

Gregoire wants the money to “buy back” cuts she’s proposing. She’s suggesting the sales tax measure would be voted on in a March special election, which would cost the state $8 million to conduct.

If lawmakers put it on the ballot, she will “hit the road” to convince voters of the importance of its passage. It won’t be an easy sell in the Legislature, where Republican leaders are dead set against any general tax increase.

“Increasing taxes at a time when our economy is just starting to recover is simply not the right direction to take,” said. Rep. Barbara Bailey, R-Oak Harbor.

Democrats may need to rely on their majorities in the House and Senate to push it through over objections of GOP members. That means corralling backing from the coalition of moderates known as the Roadkill Caucus.

Sen. Steve Hobbs, D-Lake Stevens, a caucus leader, sounded supportive if it’s not the only action taken in the special session.

“If we’re going to take her idea of a half-penny increase and ask voters if they want to go down that route, there has to be a balanced approach,” he said.

Another problem for Gregoire may be assuring residents the money generated will only be spent to offset specific cuts. Since the dollars would go into the state’s general fund, they could be funneled into any program or service — and Gregoire won’t be around after next year to keep an eye on those dollars.

“You have to have an extreme amount of trust in Olympia to believe that the money you will give them will be spent on what they say it will,” said Tim Eyman of Mukilteo, whose successful initiative last year all but required tax hikes go before voters.

Gregoire’s sales tax proposal largely overshadowed details in her proposed supplemental budget. That plan axes $507.5 million in spending on education from kindergarten to college. It shortens the school year by four days to save $99 million and slashes $152 million in payments to school districts through the levy equalization program.

Gregoire had backed larger class sizes to save money rather than taking days off the school calendar. Superintendents of school districts in Snohomish County and the rest of the state argued a shorter school year would be a better way to preserve the quality of classroom instruction. She said Monday she was swayed by those educators’ voices.

Superintendent of Public Instruction Randy Dorn wasn’t one of them. He blasted her budget proposal.

“From the perspective of the schoolchildren in the state — and that’s my perspective — either voters need to approve more revenue or the state Legislature needs to find another way to avoid these cuts,” he said in a statement.

Gregoire’s proposed budget pares $160 million from higher education while investing $7.6 million to expand the enrollment of engineering students at the University of Washington and Washington State University.

She is proposing to save $44.5 million by eliminating the Basic Health Plan and $50 million by providing less subsidized child care for the working poor.

And, she proposes to save $27 million by reducing the amount of time most convicted criminals are supervised in the community to 12 months. Sex offenders will be supervised for 24 months. She also logs $14.2 million in savings by letting out inmates considered a low or moderate risk of re-offending up to five months early.

To read the highlights of her budget proposal, go to www.ofm.wa.gov/budget12/highlights/highlights.pdf.

On the chopping block

Here are some of the largest savings in the governor’s budget proposal:

$160 million: Reduce aid to community colleges and universities*

$152 million: Lower levy equalization payments most school districts*

$89.6 million: End medical services for Disability Lifeline

$99 million: Shorten the school year by four days*

$50 million: Reduce funding for subsidized child care for low-income families

$44.5 million: Eliminate Basic Health Plan

$37 million: Cut legislative and judicial agency funding by 10 percent

$36 million: Reduce state share of employee health benefit costs

$42 million: Reduce funding of certain long term care and developmentally disabled services*