2010

It's not often you hear politicians complain about the shoddiness of their own work. So it was almost refreshing to hear Gov. Christine Gregoire speak candidly about her new budget proposal last week.

“The decisions that produced this budget… do not represent sound public policy for our state, nor do they serve our citizens well,” the governor wrote in a letter to Washington citizens. “We cannot ride out this recession and come out ready to rebuild our economy on top of this budget.”

Great.

But there was a reason for Gregoire’s surprising candor.

By law, her proposal for the supplemental budget — which is a kind of continuation and update to the two-year budget passed by the Legislature earlier this year — must consist of nothing but cuts. In other words, she couldn’t entertain the idea of raising taxes or other revenue in order to plug the estimated $2.6 billion shortfall that has opened since the first budget was passed. And she isn’t allowed to cut from many government services, like basic education.

That meant Gregoire was forced to recommend some fairly drastic actions. Her proposal would completely eliminate the state’s General Assistance Unemployable (GAU) program, as well as its Basic Health Plan (which Sen. Maria Cantwell has offered as the model for a federal health care plan). It would suspend levy equalization assistance, which helps school districts in rural areas raise money. It eliminates money for watershed planning, cuts 25 positions out of the Washington State Patrol and takes a sizeable bite out of funding for higher education.

“This… eliminates or reduces many vital services, some to the bone,” Gregoire wrote.

But unlike the last legislative session, when the governor frustrated her own party by ruling out tax increases to help solve what was then a $9 billion shortfall, the governor now says taxes are back on the table. At a Greater Spokane Incorporated legislative forum last week, Gregoire’s legislative affairs director, Marty Brown (a veteran of her budget team), told a standing-room-only crowd that the governor would submit a second budget proposal in the New Year that would include ideas for additional revenue and would more closely refl ect her government priorities.

Forum moderator Denny Heck, founder of Washington’s TVW public affairs network, indicated Gregoire would try to buy back at least parts of the health plans and the General Assistance program in what’s being called “Book Two” of the budget. Some are suggesting the governor seeks around $900 million in such “buy-backs.”

“She’s not at all happy with what we had to do [with the first budget],” Brown said. “It’s not a budget that moves our state forward.”

Sen. Chris Marr (D-Spokane) says legislators should set the tone in the fi rst week by examining their own costs — their own pay, how much they contribute to their health insurance plan, their own offices’ budgets — and looking for savings. “The public has an expectation that we start with ourselves,” he says. “We could make a statement that would indicate the frame of mind of the Legislature.”

Marr says he believes Washington voters sent the government a message with the rejection of Tim Eyman’s Initiative 1033, which would’ve choked funding to local and state governments. “I think the public told us with 1033, ‘OK, we believe you,’” he says. “But I don’t think the public was [necessarily] telling us [they’re] endorsing a revenue solution.”

Before they can even think about revenue solutions, however, the Legislature will have to grapple with another Eyman initiative. In 2007, voters approved by a narrow margin Initiative 960, which required a two-thirds majority (rather than 50 percent) for the state to pass any bill that would raise taxes. The measure has indeed made it harder to raise revenue over the last two years, but it has now expired — and the Legislature needs only a simple majority to toss it out.

“The first thing we gotta do is overturn 960 in some form,” says Rep. Alex Wood (D-Spokane), noting, however, that “the public’ll go crazy.”

“There’s a lot of trepidation about a wholesale lifting of 960,” says Marr.

He suspects the Legislature may instead lift the two-thirds requirement for certain types of tax increases, or suspend it on a case-by-case basis.

In any case, Democrats will likely need to get around 960’s requirements in order to buy back the cherished human service programs cut in Gregoire’s initial proposal. (For all their talk about examining their own budgets and closing tax “loopholes,” these things don’t add up to $900 million.)

This is especially true considering there’s no federal stimulus money coming to the rescue this year. Wood says many of the programs now on Gregoire’s chopping block were on the Legislature’s last year before around $3 billion in federal dollars preserved them.

“All those [cuts] that people viewed as too unpalatable last session or that stimulus dollars shielded us from are back on the table,” says Marr. “And it’s going to be much more difficult to walk away from cuts.”

But Marr says he thinks increases in the state’s main taxes — sales, business and occupation and a part of the property tax — won’t fl y. Sen. Lisa Brown (D-Spokane), meanwhile, says she’s open to one-time fixes, including a temporary bump in the sales tax (as long as it’s coupled with a tax credit for working families).

The one route you definitely won’t see legislators take this session, though, is an income tax. Brown made big news last session for discussing the idea of abolishing the state’s regressive sales tax and replacing it with an income tax, which is viewed by many on the left as more fair to lower-income families. But Gregoire and Brown both said this week that now isn’t the time for such a change.

“We can’t wait,” Gregoire told the Tri-City Herald. “We need solutions now.”

Finding these solutions in 60 days — and repairing the safety net Gregoire was forced to shred — will be the name of the game in the upcoming session, which begins Jan. 11.