Raising taxes may be better than budget cuts

OLYMPIA – “Tax increases will be necessary in order to avoid the negative economic effects of deep budget cuts.”

Those are words that very few politicians in Olympia, and definitely not those in close races, like Gov. Chris Gregoire, are willing to utter a few weeks before the election. In fact, both Gregoire and challenger Dino Rossi have repeatedly said they won’t raise taxes in tough economic times.

But the liberal-leaning Washington State Budget and Policy Center – a private think tank – argues that tax increases are likely to do less damage to the economy than massive cuts to state spending. So with the looming specter of a $3.2 billion state budget shortfall in the next two years, the center’s budget analysts offer up some ideas.

Among them:

•Tapping the state’s new $700 million Rainy Day Fund to help pay some of the bills,

• Careful state budget-trimming, rather than across-the-board cuts,

• Revisiting the state’s hundreds of tax breaks to see if they’re really justified. From 1995 to 2007, the group says, state lawmakers approved more than 100 tax breaks totaling $1.6 billion over the next two years.

• Boosting the state’s sales tax. Each increase of half a cent per dollar spent would yield another $1.1 billion in new money.

• But then offsetting that tax hike for some low-income families by offering them a state match for the federal Earned Income Tax Credit.

What that means: Households with two or more kids can earn nearly $40,000 a year and qualify for the EITC. In Washington, that’s 350,000 families that would get an average of $250 a year back from the state. That, the center says, is about twice what the same family would pay in additional sales tax.

“An increase in the sales tax should not be seen as a permanent solution to our fiscal problems,” write study authors Jeff Chapman and Stacey Schultz. But it could buy the state time while working out a long-term solution, they say, including a state income tax.

He’s not a Republican, he’s with the GOP …

A King County judge on Friday threw out Democrats’ lawsuit to try to rewrite the ballots so Rossi is listed as “Republican” rather than the party’s longtime acronym “GOP.”

Republicans, not surprisingly, took a dim view of the case from its start. State GOP chairman Luke Esser called the lawsuit “pathetic,” “diversionary,” “a carnival sideshow,” “shameful” and more.

But not having the word “Republican” next to his name is a real advantage to Dino Rossi, pollster Stuart Elway says. Elway has measured voter support for Rossi and Gov. Chris Gregoire, alternating “GOP” and “Republican” in his description of Rossi.

The result: “When it is GOP Rossi, she (Gregoire) leads by 4 points. When it is Republican Rossi, she leads by 9 points.”

We won’t be needing that second podium …

In a tight race to become state lands commissioner, Democratic challenger Peter Goldmark was handed a gift last week – by his opponent.

The setting was in the Canadian border community of Blaine, where hundreds of business folks had gathered at a resort for the Association of Washington Business’ election-year “policy summit.”

The event and its several debates is a major one for candidates: it’s a big-money crowd, TVW cameras are rolling, and reporters are sending out dispatches to blogs and newspapers across the state.

But as the time for the morning debate between Goldmark and Republican incumbent Doug Sutherland drew near, a ripple went through the crowd: No Sutherland. He’d gotten the time wrong.

After some calling back and forth, Goldmark took the stage alone. For about 45 minutes, he detailed his credentials and, unchallenged, blasted Sutherland’s land management and industry ties.

Sitting in the back of the room, a reporter joked after the one-person debate “It was close, but I give the edge to Goldmark.”

The Capitol press corps exodus continues …

The threat of layoffs and other woes in the newspaper industry continue to shrink the Olympia press corps, as reporters flee to more lucrative and stable public-relations jobs.

Four longtime Capitol reporters have left in the past few months. Veteran Associated Press writer Dave Ammons is now a spokesman for Secretary of State Sam Reed. Two-thirds of the Seattle Times’ three-person bureau here recently left for private-sector PR jobs. And on Monday, the Tri-City Herald’s Chris Mulick announced his own departure to work for the Senate Democratic caucus.

“This is about putting family before all else,” Mulick wrote in a farewell blog post. “…Certainly, the financial troubles plaguing this industry have created considerable uncertainty…With a young family, I’ve no choice but to risk jumping too soon. I simply can’t risk jumping too late.”

His departure brings me an unwanted distinction: The Spokesman-Review is now the sole remaining Eastern Washington newspaper with a bureau in the state capital.

On a shoestring budget, Mulick pioneered online news video from the Statehouse and built a well-regarded blog. He’ll be missed.