Governor on economy: “We are in uncharted territory.”

OLYMPIA — Gov. Chris Gregoire once was asked by a reporter if there was anything she didn’t like about the job. Yes, she said. She hated getting the news that a child in the state’s care had died. Four years later, Gregoire says there’s a second thing she doesn’t like: getting notice after notice that companies are about to lay workers off. “And it comes in a wave, every day,” she said. Gregoire spoke Thursday to dozens of politicians, business leaders and other Spokane-area officials on an annual lobbying trip to the state capitol. Some 85 people from the region are spending three days in the capital pushing local priorities and trying to keep Spokane on lawmakers’ radar. The message from Gregoire and top lawmakers: Things are bleak now, but Washington is well-positioned to rebound quickly. And as in the other Washington, Olympia is trying many things to kick-start the economy. “No one knows what to do right now, to be perfectly honest with you,” the governor said. “We are in uncharted territory.” The state’s economy relies heavily on foreign trade, she said, and the global economic slowdown has sharply curtailed imports and exports. Lawmakers are wrestling with a $6 billion budget shortfall over the next two years. And Gregoire said she doesn’t expect improvement in the state treasury until December. Previous Spokane delegation to Olympia brought long wish-lists of construction projects and policy changes. Local leaders would meet with lawmakers and fan out in the marbled halls to press their cases. And it has helped move legislation and steer tens of millions of dollars into the region. “You’re unified, you’ve got an agenda and you show up, which I think is 80 percent of life,” House Speaker Frank Chopp told the group. This year, though, expectations are tamped down. Some are mainly trying to avoid budget cuts. “I think everyone’s very realistic about this,” Rich Hadley, CEO of Greater Spokane, Inc., the trip’s organizer. “People are coming to get the inside scoop and in some places defend their budgets.” Lawmakers and the governor are trying to build a springboard for the economy by spurring “green jobs” and building transportation projects, Senate Majority Lisa Brown said. To help now, Brown said, they’re trying to cut requirements for local schools and relax the rules on some local government spending. The group quizzed Gregoire and lawmakers about taxes, business issues, economic development and the prospect of cuts to local college programs. Gregoire, who in December proposed a budget with no tax increases, said it’s hard to think of a tax that wouldn’t worsen the recession. Boost property taxes at a time when people are losing their homes? Increase taxes on struggling businesses? Increase the sales tax when consumers are reluctant to spend? Chopp wouldn’t commit to not raising taxes, saying he wants to see how federal dollars and state budget cuts look. “Obviously, we prefer not to raise any taxes whatsoever,” he said. Brown has also refused to rule out tax hikes. State Rep. Dan Newhouse painted a less bleak picture, pointing out that state revenues in 2009-2011 are actually expected to be up slightly from 2007-2009. “It’s not that we’re totally out of money,” said Newhouse, R-Sunnyside. “We just have to be smarter about how we spend that money.” Democrats are focused heavily on creating construction jobs and environmentally friendly work, he said. Republican lawmakers are pushing for things to preserve existing jobs, he said, such as cutting business regulations. “It’s easier to maintain a job than to create a new one,” said Newhouse. Neighboring Idaho is very aggressive about attracting businesses, he added, and Washington needs to do the same thing.