I spent a couple of hours yesterday sitting in on meetings between state officials and a large group of business/political/community leaders from Spokane. Among the things that came up:

-Gov. Chris Gregoire said she expects the state's revenue picture to keep getting worse for a while. The March, June and even September revenue forecasts, she believes, will all be worse.

"The hopes are that it won't be down in December," she said.

-If she mentioned a source on this I missed it, but by way of good news, Gregoire also said that Washington is the second best-positioned state to emerge quickly from the recession.

-She said that the likely federal infrastructure money -- $535 million -- was less than the billions the state had been hoping for.

-And she also repeatedly cautioned that that other federal money will come with a lot of strings, conditions and restrictions attached, rather than just being a big check that state budget writers can use to backfill any cuts.

"They (the feds) have kind of learned the lesson of giving $350 billion to Wall Street with no strings attached," she said.

-Also, one observation: this is a business-organized trip, but this year, business people were pretty scarce among the 85 Spokane-area folks who made the trip. Far more numerous: local government officials (mayors, city council members) and people with a direct stake in how the state's budget pie is divvied up (WSU, hospital folks, community organizations, the Armed Forces and Aerospace Museum, SIRTI, the MAC, etc.). In a year of cuts, organizer Rich Hadley said, many were there largely to play defense.

Here's the print version:

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 off workers.

“And it comes in a wave, every day,” she said.

Gregoire spoke Thursday to politicians, business leaders and other Spokane-area officials on their annual lobbying trip to Olympia. 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, but Washington is well- positioned to rebound quickly. And as in the other Washington, Olympia is trying various tactics to kick-start the economy.

“No one knows what to do right now, to be perfectly honest with you,” Gregoire 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 delegations 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 helped move legislation and steer money 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 down. Some groups are mainly trying to avoid budget cuts.

“I think everyone’s very realistic about this,” said 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.”

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 make the recession worse. Raise property taxes when people are losing their homes? Increase taxes on struggling businesses? Boost the sales tax when consumers are reluctant to spend?

But 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 increases.

Rep. Dan Newhouse painted a less bleak picture, pointing out that state revenues in 2009-’11 are expected to be up slightly from 2007-’09.

“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 want to create construction jobs and environmentally friendly work, he said, while Republicans are pushing to preserve existing jobs with tactics such as cutting business regulations.

“It’s easier to maintain a job than to create a new one,” Newhouse said.

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