Gregoire: School programs will require more taxes

OLYMPIA — Gov. Chris Gregoire proposed two “lame-duck” budgets Tuesday for her successor and the next Legislature to consider next year. One cuts programs to stay within the revenue the state expects to collect; the other adds some programs it may need to improve public schools, and would need some extra tax revenue. She called the former “simply unacceptable” because it cuts money for public schools, colleges, local governments and social programs. The latter, she said, was a “balanced solution” that accounts for savings the state has made through consolidations and better management practices, and again cancels raises for public school teachers that were approved by voters in 2000 but rarely funded since. But that budget spends more for early childhood education, and science and math programs in schools; pays for raises to home health care workers reached through arbitration; and tries to meet a court mandate to improve basic education by spending an extra $1 billion on public schools. That money would reduce the size of classes for students in kindergarten through grade three, expand all-day kindergarten in the state and spend more on school operations and maintenance. It would from extending two taxes, the business and occupation tax surcharge on some services and a 50-cent per gallon tax on beer, which will both expire June 30, and levying a new excise tax on wholesale fuel costs. Part of the money for home care workers, $125 million, would come from a new tax on soda, candy and gum. Passing new taxes or extending existing ones requires a two-thirds super majority in next year’s Legislature, and the approval of incoming Gov. Jay Inslee, who campaigned on vetoing any new taxes and finding savings in better management techniques and a growing economy. Inslee’s initial response was, at best, lukewarm. In a prepared statement released by his transition office, he said the budget proposal reflected “the seriousness of the challenges ahead” and acknowledged Gregoire’s “effort and determination to address Washington’s fiscal reality.” But he didn’t mention tax increase and said he would lay out his own priorities. Key legislators showed no eagerness to join any call for tax increases. Sen. Andy Hill of Redmond, the Republicans’ choice to lead that chamber’s Ways and Means Committee, issued a statement thanking Gregoire “for here decades of dedicated service to the people of Washington,” but said the GOP’s priorities include a sustainable budget and Inslee’s campaign promise to veto new taxes mean “we are moving forward under the assumption that additional taxes are not an option.” Rep. Ross Hunter, D-Medina, who has said it may be necessary to consider new taxes to balance the budget and improve education, also thanked Gregoire for “thoughtful work” but didn’t endorse any of her tax proposals. Instead, he said in a press release it shows the problem of writing a budget that “without changing the revenue picture.” Gregoire said the extension of existing taxes are within what she heard fellow Democrat Inslee say on the campaign trail, because they are not new taxes. She doesn’t think he ruled out an increase in transportation taxes, and the fuel excise tax relates transportation, she said, because it would have a strong connection, or nexus, to the proposed use: paying for getting students to public schools. The tax on junk food like candy and soda also has a nexus to its use as well, she contended, because it is related to health care costs that such products can help create. Voters rejected taxes on candy and soda she proposed in 2010, but they also called for the state to pay better wages to health care wages by passing an initiative last year, she said. If Inslee and legislators don’t like the junk food tax, they can come up with another one, she said. “I don’t expect a rubber stamp,” Gregoire said, adding turmoil in the state Senate over who will control that chamber could result in the budget bogging down until members take care of “hard feelings that have not been worked out.”