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Gregoire’s tax support comes late

Shawn Vestal (Jesse Tinsley / The Spokesman-Review)
Shawn Vestal (Jesse Tinsley / The Spokesman-Review)

The next Washington governor needs to find a way to raise money for schools, says the outgoing governor.

There is no way, the outgoing governor says, for the state to meet its basic obligations to education without finding some new source of revenue – or just tearing down the rest of the government.

“The reality is we cannot live up to our responsibilities without new revenue,” the outgoing governor said last week. “That is my opinion. It is sound. I am not playing games. It’s the truth.”

If only the governor had made this kind of case – frequently and forcefully – before she was outgoing. When she was still proposing and signing all-cuts budgets. Instead, in the last two years, the conventional wisdom about taxation has hardened into a reality: Cuts are the only politically possible solution to big budget deficits.

If revenue is so crucial, why didn’t Gov. Chris Gregoire pursue it more vigorously? Gregoire, in her final year as governor, says there’s a lot of wishful thinking wrapped up in that question, and perhaps a refusal to recognize the truth. She started hearing this challenge late in 2010, after she decided to interpret the state’s anti-tax votes as a blanket “no” vote on taxes.

“People were saying to me, ‘You’ve got to raise revenue,’ ” she said Thursday, as she awaited the arrival of President Barack Obama in Seattle. “I was like, ‘Really? Really? It’s been one month since the people of Washington said no to an income tax, no to a nickel on a can of pop and yes to a two-thirds majority for tax increases in the Legislature.’ ”

Since 2009, Washington has closed its budget gaps with some $10.6 billion in cuts and about $600 million in new revenue – a ratio of 17 to 1, according to the liberal Washington Budget and Policy Center. Gregoire did push a proposal last November to raise the sales tax by a half-penny and close tax loopholes – a proposal that fell by the wayside when improved revenue forecasts arrived.

Now both gubernatorial candidates, Democrat Jay Inslee and Republican Rob McKenna, oppose seeking any new tax revenues, arguing instead that they will turn to that magical pot of gold: the closed loophole.

Closing loopholes is every politician’s favorite source of revenue, right up until they have to vote on one. Gregoire is emphatic that it’s an insufficient solution, and she cited the recent legislative session as an example. Before the session, she provided a “laundry list” of possible loopholes to close.

“They produced one and only one,” she said, referring to a relatively small tax break for big banks. “In a year when Democrats and Republicans didn’t want to make any more cuts, they could pass one.”

The crux of Gregoire’s future concerns centers on the state Supreme Court’s ruling that the Legislature has failed to provide “ample provisions” for basic education, which is its obligation under the Washington Constitution. The ruling gives the Legislature a deadline of 2017 to implement a series of reforms passed in 2009, and a task force will work this year to figure out ways to do so. In any case, Gregoire said another $1 billion will be needed for education in the next budget.

Long-term, it will cost more – maybe billions more each year, set against the likelihood of further budget shortfalls. This pressure is exposing everyone’s wishful thinking – the taxers’ desire for more money, the cutters’ faith in painless trimming – but it has not led us anywhere near a productive combination of both strategies. Gregoire says we shouldn’t look for that from the Legislature – the supermajority requirement has put the minority in charge on taxes.

Voters might be more open to the idea, strange as it sounds. When Gregoire was stumping for the half-cent sales tax increase last fall, there was considerable public support – especially when pollsters asked people whether they favored the tax hike versus further program cuts. Sixty-four percent of state residents polled said they either certainly or probably supported the tax.

It’s something to keep in mind the next time someone tells you what the public thinks about taxes.

“Either we’re going to look at new revenue,” Gregoire said, “or we’re going to devastate the state when it comes to public services.”

Shawn Vestal can be reached at (509) 459-5431 or shawnv@spokesman.com. Follow him on Twitter at @vestal13.