Gov. Gregoire looks to broker last major deal

Under plan, states would be able to collect taxes from online retailers

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photoGov. Chris Gregoire

OLYMPIA — Gov. Chris Gregoire's time in office may be best remembered for the major deals she helped broker, often in late-night bargaining sessions in which negotiators were ordered to find a resolution.

Now the Democrat, two months away from leaving state government, is looking to finalize one more big agreement.

Over the past year, Gregoire has been working to build support for a congressional plan that would allow states to collect sales tax from online retailers based elsewhere. Similar efforts in Congress over the past decade have all failed, even as online sales have become more common.

Gregoire said the current lame-duck Congress is perhaps the best time to pass the measure, with some Republican governors and lawmakers signaling their support. She said the issue is a matter of fairness, helping states collect taxes that are due and helping local businesses compete on a level playing field with online counterparts.

"I will tell you that our companies in this state are suffering mightily because of this fundamental unfairness," Gregoire said.

A deal would also provide Washington with hundreds of millions of dollars in revenues, helping deal with budget shortfalls in a state dependent on the sales tax.

Gregoire, who is working along with Republican Tennessee Gov. Bill Haslam, believes any agreement will have to be part of larger negotiations to avoid the so-called "fiscal cliff" -- in which a batch of tax increases and government spending cuts are set to take effect in the new year unless Congress acts. If Congress fails to reach agreement to that issue, she doesn't see a pathway for the online sales tax measure.

Working with a bipartisan team of senators, Gregoire said she is prepared to testify or do any other advocacy work that may be needed on Capitol Hill. She leaves office in January.

Gregoire is no stranger to high-stakes negotiations, as they have come to define her tenure as governor. Much of her work in recent years has been mediating budget disputes between caucuses in the state Legislature, but last year she also spent months of behind-the-scenes work trying to negotiate the end of a tense disagreement between the grain export company EGT and longshoremen. Both sides praised the governor for ending that conflict, which had involved damaged property and arrests.

Gregoire's negotiating work began before she was governor. In 1998, when she was serving as attorney general, Gregoire helped negotiate a $206 billion settlement between tobacco companies and 46 states. Since then, she's also brokered other major deals: She helped secure a Columbia River water plan that had eluded both sides for decades. She hosted late-night meetings to find a compromise that overhauled the state's workers' compensation system. And she finalized new tribal compacts that allowed a limited expansion of gaming.