Editorial: Gregoire’s budgets show fight not over

Washington Gov. Chris Gregoire released two getaway budgets Tuesday, and with them laid down markers for her successor and for legislators.

Responses could be kindly characterized as “Nice work, but no thanks.”

We agree, but expect the early naysayers will take a second look, especially those who would reject any tax increases. Count Gov.-elect Jay Inslee in that number.

Book 1, as Gregoire calls it, outlines spending within the framework of existing revenues, which will leave the state short $900 million for the next biennium.

To close the gap, she proposes a $100 million reduction in school levy equalization, another $52 million whack to the state’s already hard-hit colleges and soaking up $49 million in liquor sales profit-sharing with local governments. Teachers would again be deprived of cost-of-living pay increases. Thousands of the state’s poor and disabled would lose support services. County and local fairs would be cut, as would watershed planning groups (for a total 83 percent reduction since the 2009-2011 biennium).

Gregoire skims through Book 1, preferring instead to focus on Book 2 and its tragic ending: a 10 percent increase in state spending over the next biennium. There are some compelling chapters here, but this reads too much like pre-recession budgets that grew at double-digit rates unsustainable when the economy tanked.

And those gimmicky taxes on pop, candy and gum are back, albeit tied to new spending imposed on the state by an arbitrator in a case involving home health care workers. More than 60 percent of state voters rejected those taxes in 2010.

The governor also wants to extend a tax on hospitals scheduled to expire in June, and she would repeal a fuel-use tax exemption for oil and gas that refineries consume in the production process.

Those choices will be up to Inslee and a Senate squabbling over leadership before members even get to Olympia.

The biggest challenge will be meeting the Washington Supreme Court requirement that the state fully fund K-12 education spending, with an anticipated down payment of about $1 billion this biennium. Gregoire’s tack is the imposition of a wholesale fuel and diesel tax that would be dedicated to school transportation, thereby freeing up funds for smaller class sizes and expanded all-day kindergarten and preschool. She would also extend a business-and-occupation tax on some professionals and a beer tax surcharge.

The beer and B&O measures enjoyed more than the two-thirds support when enacted by the Legislature in 2010, and Gregoire says she is confident they will pass again.

Gregoire will leave office Jan. 18 after eight years that encompassed a grand ride up for spending and a grim retrenchment. The state has lived within its means, but only by sweeping cash out of accounts that were supposed to fund initiatives like medical research. With only very modest improvement in Washington’s economy expected over the next few years and the Supreme Court bird-dogging education spending, the governor’s budgets do show how hard it will be for Inslee and legislators to hold the line on taxes.