Sims, Gregoire tangle over income tax plan

SEATTLE – The two main Democrats who would be governor sparred Friday over whether Washingtonians are ready for broad tax reform, including a state income tax.

“An income tax is dead on arrival in Olympia,” said Attorney General Christine Gregoire. “Everywhere I go, I hear ‘Don’t you dare support an income tax.’ “

Her primary election opponent, Ron Sims, says his tax-reform plan would cut taxes for businesses and for 80 percent of Washingtonians while still providing desperately needed cash for the state’s schools and colleges.

“It’s an emergency. The sirens are wailing,” he said. “It is time to come to the aid of education in Washington.”

The two-hour lunch debate, hosted by the Seattle City Club at a downtown hotel, drew about 350 people. The clinking of plates and silverware died away as Sims and Gregoire outlined their biographies and plans.

Gregoire talked about her upbringing in rural Auburn, and how she was inspired by her mother to become the first in her family to graduate from college. Gregoire described how she, as AG, was lead negotiator in a massive lawsuit against tobacco companies.

“Everyone pretty much laughed,” she said. “No one had ever been able to achieve even a dime” in settlements from Big Tobacco. She wrung billions of dollars from them, a victory she called “the largest single settlement in the history of the world.”

Gregoire pledged to improve the economy, get more children health insurance and to expand the state’s colleges to make room for more students.

“We need to put Washington back to work, healthy and well-educated,” she said.

Sims, a Spokane native, took a different tack. Year after year, he said, politicians pop up, promise more health care and more money for education. They get elected, he said, then don’t follow through on their promises.

“We’ve been hearing this for 13 years, all the great things we want to do with education,” he said. “But there is no free lunch.”

It’s time, he said, for a bold leader. And his bold – some would say politically foolhardy – approach is to call for sweeping tax reforms. He’d cut the state sales, business and property taxes. Instead, he wants to launch a state income tax that would vary by income. Under his plan, a family of four earning $50,000 would pay no state income tax. Simply being able to deduct the state income tax from federal taxes – as Idahoans do now – would save Washingtonians $1.5 billion a year, he said.

“I’ve grown up all my life hearing people say ‘We’re not ready,’ ” he said, recalling how people initially laughed at the idea of a world’s fair in Spokane three decades ago.

“It transformed Spokane, because people believed,” he said.

Gregoire countered that reliance on an income tax hasn’t helped Oregon, which has cut a month from the school year and slashed the number of state troopers nearly in half.

Plus, she said, a state income tax would require an amendment to the state constitution, meaning approval by two-thirds of state lawmakers and a majority of voters.

“We can’t be talking about promises that can’t come true,” she said.

On jobs and the economy, Sims outlined a three-way plan. Improve education to grow a well-educated workforce. Improve the state’s transportation network. And do away with the business tax to encourage businesses to grow or move here.

“We’re not going to sit on the Idaho border and watch Post Falls grow,” he said. “Those jobs are going to be in Spokane County.”

He said the state can expect 317,000 new jobs in the next four years “if the state just stays out of the way.”

Gregoire’s economic plan predicts 250,000 new jobs in four years. A key part of it is diverting $500 million of the state’s tobacco settlement money in 2008 to a biosciences program. That, plus venture capital, could turn Washington into a cutting-edge powerhouse, she said.

She said she’d also promote alternative energy, which would spur agriculture in central and Eastern Washington.

The state’s job, she said, is to “tear down barriers, give incentives and become a good partner to business.”

On the environment, Sims said the state must clean up the Spokane River and Puget Sound. “When I was a kid, it (the Spokane River) changed color every day, and we thought that was neat,” he said.

Gregoire said the state has to address both water quality – in Lake Roosevelt, the Spokane River and Hood Canal, for example – and quantity.

“It is our future economy,” she said.

The state must allocate water “very gingerly,” she said, and shouldn’t expect to rely so heavily on hydropower. Her office has battled the federal Department of Energy to clean up Hanford, where contamination could leach into what Gregoire called “the lifeblood of the Northwest” – the Columbia River.

One of the most personal questions Friday came from a woman in the audience, who asked what the two candidates would tell her lesbian daughter, “a second-class citizen” because she cannot marry.

Sims said he supports the right of loving, same-sex people to marry one another.

Gregoire’s in a tougher spot as AG. Two current lawsuits are challenging the state law. Because of that, she said, it would be wrong to state her personal opinion now.

“I have to defend the law. I took an oath of office,” she said. “But let me just say this: Let Washington be a state where everyone is welcome, respected and won’t think of themselves as a second-class citizen.”