Gregoire: State needs new revenue

She signs budget, says successor must find money for education




Local angle

State Sen. Joseph Zarelli, a leader of the Republicans’ budgeting efforts, said the GOP’s Senate coup was instrumental in the success of the fiscal reforms included in the state supplemental operating budget signed by Gov. Chris Gregoire.

“It’s safe to say none of these reforms would have reached the governor’s desk were it not for the bipartisan Senate coalition, which insisted that these breakthrough measures move all the way through the lawmaking process before there could be a budget vote,” Zarelli, R-Ridgefield, said in a statement released Wednesday.

On the afternoon of March 2, minority Senate Republicans gained support from three philosophically conservative Senate Democrats and used an uncommon procedural move to pass their own budget. This new budget stalled in the House, which has a stronger Democratic majority, and led to a another month of negotiating.

During this year’s session, Zarelli was a strong advocate for the pension reform bill and the four-year balanced-budget measure that lawmakers passed with the budget.

“I’m confident that time will prove these reforms were worth the effort put in by so many people, including the three Democratic senators who stood with us all the way,” Zarelli continued in his statement. “I hope next year we will see another set of reforms go before the new governor, because there’s a lot of work still to do to get the state’s finances under control.”

OLYMPIA -- Washington Gov. Chris Gregoire challenged her potential successors Wednesday to pursue new revenue in support of education, saying that she wished the state had committed more money to schools in this year’s budget.

The leading candidates to replace Gregoire -- Democrat Jay Inslee and Republican Rob McKenna -- have both said they don’t see the need for new revenue. But Gregoire said the budget they will have to adopt shortly after taking office is already in need of $1 billion for education.

“To the candidates that are running: We can say, ‘No new revenue.’ But the reality is, we cannot live up to our responsibilities without new revenue,” Gregoire said.

Inslee and McKenna believe the state can save money in some areas, such as through efficiencies and lower health care costs, and shift more cash to education. And Inslee said he thinks the state can grow its revenue with a strong economy.

Gregoire dismissed that idea, saying political leaders need to be realistic. Economic growth will be slow, she said.

“The idea that we’re going to turn the economy around in a split second and get ($1 billion) -- there is absolutely nothing in terms of a forecast that would suggest that to be true,” Gregoire said.

The Washington Supreme Court determined in January that the state isn’t meeting its constitutional obligation to amply pay for basic public education. The Legislature has created a task force that will examine this year how to address that.

Gregoire’s comments came as she signed what is likely to be the last spending plan of her eight-year tenure. She will propose a new budget before leaving office in January, but it will likely be left for her successor to finalize.

In the midst of the recession, state government has shrunk by thousands of jobs and the Legislature has curtailed spending while pursuing only sporadic taxes and fees. New taxes are particularly challenging to pass because of a voter-approved initiative that requires a two-thirds majority to approve them.

The current budget spends $1.1 billion less than a version approved last year, though it avoids further cuts in education. Budget negotiators relied on a $238 million accounting maneuver in which the state will temporarily claim control of local sales taxes before they are redistributed back to jurisdictions at their usual time.

Gregoire also approved major policy bills that conservative lawmakers had pushed. One of those requires that lawmakers pass budgets that are projected to remain balanced over a four-year period, instead of the current two years. Another will reduce benefits for future state workers who take early retirement, saving the state some $1.3 billion over 25 years.