Wash. gov: Tax hikes needed to save programs

AP News
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Posted: Dec 09, 2009 3:05 PM

Making her case for tax increases, Washington Gov. Chris Gregoire on Wednesday presented a bleak plan to balance the state budget by wiping out spending for health care, welfare, and education programs that reach every corner of Washington.

As required by law, Gregoire presented a plan for balancing the state's $2.6 billion budget deficit using only the state's existing tax streams.

But in an open letter to Washingtonians, the second-term Democrat also said she can't let those deep spending cuts stand.

She plans to roll out a second budget proposal early next year, when state lawmakers will begin their work balancing the budget. The second budget will still have major spending cuts, she said, but it will also propose new tax sources to rescue several state programs from the chopping block.

Gregoire did not propose a specific way to finance the programs on Wednesday. But included in her proposed life raft were key programs including:

_ The Basic Health Plan, which provides subsidized health coverage to about 65,000 poorer Washingtonians.

_ General Assistance, a state welfare program for disabled people who can't work or qualify for federal disability payments.

_ Levy equalization, a system that doles out money to school districts that have a lower-than-average base of property taxes.

"These important and integral services do not come free," Gregoire said. "No one likes to pay more taxes. And no one likes to raise more taxes, no matter the state of the economy."

The decision to go to the tax well was not a surprise; Gregoire had talked repeatedly in recent weeks about her unwillingness to run with an all-cuts budget. But the move carries some political risks for the Legislature's Democratic majority, which is heading into a busy election year.

Raising taxes would require changes to Initiative 960, the voter-approved tax-limiting measure passed in 2007. That initiative effectively kept a lid on any tax plans during the last legislative session, but its two-year expiration date arrives this month.

After that, the Legislature can amend the initiative with a simple majority vote. Democrats have enough votes to take that step on their own, although threats to a rural-serving program like levy equalization could attract some Republican votes.

Gregoire has not said which tax sources she might favor for a potential revenue package, although she has sounded dubious about the idea of general increases in sales, property or business and occupation taxes during the nascent economic recovery.

Finding another tax source that can attract enough political support while also raising sufficient money to stave off cuts, however, could be a very difficult job.

Gregoire also announced Wednesday that she was taking administrative action, and would close all or part of several institutions, saving the state at least $70 million. Gregoire said that Ahtanum View, Larch, Pine Lodge prisons will be closed, as well as one wing at the state penitentiary in Walla Walla. Parts of the juvenile institutions at Naselle Youth Camp, Maple Lane School and Green Hill School will also be closed.

Also closed would be two institutions for the developmentally disabled, Frances Haddon Morgan Center in Bremerton, and Rainier School in Buckley, though savings on that won't be known until Rainier closes in 2014, said Gregoire spokesman Glenn Kuper.

"The actions combined will result in millions in savings for state government now, and even more in the future," Gregoire said.