Gregoire changes tone on taxes, cuts

GOP blast governor for blaming state’s woes on Wall Street

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SEATTLE — Echoing President Barack Obama, Gov. Chris Gregoire said “this is what Wall Street has done to our state” when she proposed eliminating health insurance for the poor and reducing even further support for education and public safety.

The shift to populist, national rhetoric was a change for the Democrat, as was her seeming willingness to at least consider tax hikes to help the state deal with a $2 billion budget deficit. While Republicans blasted Gregoire for blaming far away stock traders for state woes and mimicking the recent political strategy of the president, the change in tone was welcomed by some of Gregoire’s fellow Democrats and lib

eral allies. They had complained the two-term governor had been too willing to cut spending to help deal with the effects of the Great Recession.

“We have been hoping she would change her tune on revenue,” said Molly Firth, public policy director for the Community Health Network of Washington. “She has recognized that voters don’t want these devastating cuts … and want a balanced approach.”

Lawmakers will return to Olympia late next month for a special legislative session. In her budget proposal released Thursday, Gregoire suggested things such as eliminating Basic Health and a medical program for disabled adults to save nearly $160 million. Overall, social services would see cuts of about $815 million. And Gregoire hinted she’d be open to asking for more revenue, noting Olympia has cut about $10 billion in spending in the last three years.

Earlier this year Gregoire balked at the suggestion that tax increases could be used to help balance the budget. She pointed out that in November 2010 voters approved an initiative that killed tax increases the Legislature had just imposed on candy, bottled water and soda. Those new levies were designed to bring in about $800 million to close a then-$2.8 billion deficit. And voters also approved a Tim Eyman initiative requiring a super majority legislative vote on new taxes.

But Firth says as the cuts keep coming, the situation for social service is getting bleaker.

“I think it’s time for the people to have a chance for voters to save these programs,” Firth said.

Democratic lawmakers, who control both the state House and Senate, realize getting a two-thirds “yes” vote in both chamber is unlikely during the special session. Backers of revenue want to send voters a referendum asking for a tax, a measure that only needs a simple majority to pass.

“We have to write a budget that actually balances, with draconian cuts in it. My hope is to ask the voters to get some of those cuts back,” said Sen. Ed Murray, D-Seattle and chairman of the upper chamber’s budget panel.

Sen. Joe Zarelli, R-Ridgefield and the GOP’s budget lead, said he was disappointed to hear Gregoire blame Wall Street for the state’s bad budget, adding that even before the recession, state government was growing at an unsustainable rate.

“It’s the same rhetoric out of D.C., I thought we had gone beyond that,” Zarelli said, later saying, “I’m going to deal with what we have, we have X amount of money and we got to figure out how to live within that.”

Gregoire spokesman Scott Whiteaker said his boss wasn’t shifting her view of taxes; rather, she is remaining open to all options.

“All she was doing was expressing a willingness to look at the ideas. She wasn’t expressing any sort of opinion one way or another,” he said.

Rep. Ross Hunter, D-Medina, said he was surprised to hear Gregoire’s willingness of taxes. The state’s current fiscal situation calls for an approach that strikes a balance between cuts and revenue, he said.

“I think there are a lot of people interested in doing revenue, the question is how many? Is there 50? I don’t think there’s much Republican support (in the House),” Hunter said.