Tax increase shouldn’t be seen as first option

A lame-duck governor’s final budget proposal normally doesn’t get a lot of attention, because it’s understood that his successor will have his or her own ideas.

Gary Locke’s swan song, however, got plenty of notice Thursday, for one primary reason: He proposes to raise taxes on soda pop, alcohol and physician services. Democrats in the Legislature offered words of support, while Republican Gov.-elect Dino Rossi – who may or may not eventually take office pending a recount and possible court proceedings – renewed his promise not to raise taxes.

Before any serious thought is given to tax hikes of any kind, the next governor and lawmakers must confront the unsustainable growth in health-care spending. Medicaid spending alone takes up 22 percent of the general-fund budget. While Oregon and California cut back on such spending last year, Oregon by 4.3 percent and California by 2.3 percent, Washington’s Medicaid bill was up 3.6 percent. Eligibility requirements deserve a close look every year to ensure those receiving aid truly need it, and accountability measures – possibly including modest charges – should be in place to encourage wise use of medical benefits.

The cost of state employee medical insurance also is rising, of course, and deserves the same kind of scrutiny private employers must apply in the business world.

Skeptical sorts will see Locke’s tax-hike proposal as convenient political cover for Democrats, who now control both legislative chambers. Count us among them. And ideas like slowing contributions to the state pension system, fund transfers and the use of reserves sound more like accounting gimmicks than tough decisions.

Locke also made curious choices in programs he would pay for with new tax money. Among them is the implementation of the new high school graduation requirement scheduled to kick in with next year’s 10th-graders. Lawmakers last session approved multiple retakes of the test required for graduation, along with support for alternative assessments for certain students. Locke’s plan makes the $4.4 million needed to make it work contingent on a tax increase, suggesting that he doesn’t consider the capstone of education reform much of a priority.

The next governor should refocus the office’s budget priorities on prudent investments and cost savings. Tax increases should be a last resort, not a first option.