Wash. state officials talk gov’t reform, taxes as they prepare to tackle $2.6B budget deficit

Wash. state lawmakers, gov talk reforms, taxes

OLYMPIA, Wash. — The Washington state Legislature should consider major government reforms and a multitude of possible tax hikes — no matter how small — as they try to solve a $2.6 billion budget deficit, top state officials said.

Speaking at an annual legislative forum sponsored by The Associated Press, Gov. Chris Gregoire and top legislators from both political parties on Wednesday outlined their priorities and hopes for a 60-day legislative session scheduled to begin Monday.

While debate over the budget deficit will take center stage in 2010, lawmakers also will have to confront issues such as public safety, environmental protection and the state’s business climate. Political tensions also will be amplified, since most state legislators have to run for re-election this fall.

In their discussion of the budget shortfall — and the need for new taxes to bridge the gap — Gregoire and majority Democratic legislators repeatedly invoked Washingtonians who are struggling during the nation’s economic recovery.

“I will do everything I can to ensure that whatever revenue is raised will not hurt our economic recovery. That is my priority,” Gregoire said. But, she added, “There are people out there relying on state government as a last resort. We cannot turn our back on these people at this critical time.”

Minority Republicans pointed out that Democrats have been in charge during the state’s financial troubles. They accused the majority of missing several chances to prepare for a collapse in revenue, and said the Legislature’s first priority should be ensuring that Washingtonians can go back to work.

“We have not done the best we can do for the citizens of Washington state,” said House Minority Leader Richard DeBolt, R-Chehalis. “That’s the bottom line. And we have to change the way we do business.”

Republicans also pointed to a recent letter from state Treasurer Jim McIntire, which warns Gregoire and lawmakers that they must act quickly to balance the state’s books, or risk running completely out of operating cash.

“With no improvement in the state’s overall cash position, the entire state treasury could be depleted as soon as September 2010,” McIntire wrote. Should that happen, the state could be forced to take out short-term loans for day-to-day operations — a step that could seriously hurt the state’s credit rating.

Senate Majority Leader Lisa Brown, D-Spokane, said lawmakers are planning to act quickly on some initial budget fixes once the Legislature convenes.

Gregoire also is expected to unveil a plan for raising about $700 million in revenue in the near future. She has said the money should be used to save several specific state programs that might otherwise be eliminated, such as the Basic Health Plan for the working poor, a welfare program for the jobless disabled, and subsidies for rural schools.

Lawmakers have not yet said how much revenue they might want to raise. But budget leaders indicated they want to leave more money than proposed by Gregoire in reserves, to deal with increases in state costs or further drop-offs in tax collections.

House Ways and Means Chairwoman Kelli Linville, D-Bellingham, said she was personally open to major reforms, including privatization of government technology services, printing, and even the state monopoly on liquor sales.

“At this point in time, in our economy, I think (liquor)’s something that the private sector can do as well or better than we do — as long as we tax the heck out of it and regulate the heck out of it,” she said. “We don’t actually have to do the job.”

Senate Ways and Means Vice Chairman Rodney Tom, D-Medina, said lawmakers might consider a wide range of possible tax sources, including new taxes on candy and gum, baked goods, and cigarettes.

Although each of those proposals wouldn’t raise a lot of money on their own, every penny will count, he said.

“Ninety-five million dollars buys you a lot of teachers,” Tom said. “So it is real money.”