Gregoire to seek half-cent sales tax hike

OLYMPIA — Voters could be asked to approve a half-cent sales tax increase next March to help replace a portion of the $1.7 billion in cuts the Legislature will be asked to make when it convenes next week for a special session. Gov. Chris Gregoire said this morning she would propose an “all cuts” budget that will effect schools, colleges, social services for the poor and elderly and public safety. “You will see more devastating cuts,” Gregoire said. At the same time, she will ask legislators to send voters a ballot measure that would increase the state’s sales tax from 6.5 percent to 7 percent for three years, starting in August. That would raise an estimated $494 million in fiscal 2013, which the referendum would be required to be split so that $411 million went to education, $42 million went for long-term care and developmental disability services and $41 million went for public safety. The referendum would need a simple majority from both houses of the Legislature to be put on a statewide ballot in March, and a simple majority from voters to become law. To pass it simply by Legislative action would require a two-thirds majority of both houses. At a morning press conference, Gregoire laid out her proposed supplemental budget which would cut: $500 million from public schools and colleges $384 million from social and human services $274 million from health services $111 million from general government $87 million from prisons and other public safety programs $16 million from natural resource program Among the cuts to education that she’s proposing are the reduction of levy equalization payments to some school districts and the elimination of those payments to others. She’s also asking the Legislature to save $99 million by eliminating four days from the 2012-13 school year; that’s an alternative to raising class sizes in grades 4-12, which she had suggested last month. State colleges and universities would see a $160 million reduction in state support through mid 2013. Those three cuts would not take place if the sales tax increase is approved. Democratic legislative leaders commended Gregoire for her proposals to raise taxes but didn’t rush to support a higher sales tax. “The governor’s proposed budget reflects how few options remain open to the state,” Senate Majority Leader Lisa Brown of Spokane and Ways and Means Committee Chairman Ed Murray of Seattle said in a prepared statement, adding the proopsal would be added to their discussions. House Speaker Frank Chopp of Seattle said he was “heartened” Gregoire proposed tax increases. “We owe it to our school children, to our citizens with disabilities and, frankly, to the future of our state to have a discussion about alternatives.” But Senate Minority Leader Mike Hewitt, R-Walla Walla, said the state should look for significant reforms. “Instead, her ‘solution’ is to go straight for revenue. “To talk about raising taxes at a time when people are out of work and can’t afford it suggests an insensitivity to what the citizens of this state are going through,” Hewitt said in a prepared statement. Some groups denounced the proposed cuts to state services. “Harmful cuts that will hurt people of all ages and weaken our economy are not the only option,” the AARP said in a prepared statement. The Washington State Budget and Policy Center, a progressive group, said the sales tax increase was a short-term solution, but the state needs a long-term reform, such as a capital gains tax that the organization is pushing. Gregoire said a capital gains tax isn’t really an option for generating revenue in the short-term because without an income tax, Washington doesn’t have an easy way to collect it.