Gregoire says she’s not finished with public service

OLYMPIA – Chris Gregoire entered the governor’s office under a cloud of suspicion in 2005 and took control of a state starting to feel the winds of a strengthening economy in its sails.

When 65-year-old Gregoire leaves office next month, she will have presided over some of the largest increases in state spending, managed through a recession that forced her to abandon or cut some programs she holds dear, and at one time or another angered almost every constituency over something she did or didn’t do.

But she also has the respect of allies and adversaries alike as a tenacious negotiator, able administrator and a person who pays attention to detail.

“In many ways, she’s an anomaly. She has a tremendous capacity to concentrate and work,” said Don Brunell, president of the Association of Washington Business. The organization that functions as the state’s chamber of commerce twice backed her Republican opponent, Dino Rossi, but Brunell, a longtime friend of Gregoire, said the vote among the members was close both times.

“She keeps her nose to the grindstone,” said Mike Hewitt, of Walla Walla, who was Senate Republican leader for much of her tenure and disagreed with most of her fiscal proposals, as well as social initiatives like same-sex marriage.

Gregoire ends 40 years as a state official – as assistant attorney general, director of the state Ecology Department and three-term state attorney general before her 2004 election – but said recently she’s not finished with public service. She doesn’t know what she’ll do next, other than spend more time with her first grandchild, born Nov. 8.

She’s sure what she won’t do: take a private-sector job in a law firm. She knows she’s been mentioned on different “short lists” for an appointment in President Barack Obama’s second term but hasn’t received a call from the White House on any potential post.

If she did? “I would seriously consider it,” she replied, because it’s difficult to say no to a president.

‘Landslide election’

Chris Gregoire’s first few months as governor were among her rockiest. She had lost the initial vote tally and a machine recount to former Republican state Sen. Dino Rossi. She only pulled ahead in a hand recount by 129 votes out of some 2.8 million cast. The state Republican Party sued for a new election, and GOP legislators sat mostly stone-faced as she made her inaugural address.

A few months later, with the lawsuit still pending from what she jokingly calls her “landslide election,” she lists as one highlight of her tenure the passage of a transportation package that included a 9.5-cent increase in the gasoline tax to get money for megaprojects like the Alaskan Way Viaduct and the North Spokane Corridor. The package had died in the closing days of the legislative session, and Gregoire used her negotiating skills – described as knowing the topic down to the fine details and keeping people at the table until a compromise is reached – to resurrect it.

“They said I would never get re-elected. They were wrong,” she said. Opponents gathered signatures to put the tax increase on the November ballot. Voters approved the tax.

Washington was still recovering from the dot-com bust and the post-Sept. 11 recession, and state government had a projected shortfall of about $1.8 billion for the first two years of her term when Gregoire took office. But by 2006, the economy had turned around, and fueled partially by real estate taxes from a housing boom, it had a projected surplus of $1.4 billion.

In a move that still rankles fiscal conservatives, Gregoire and Democrats in the Legislature expanded some programs and started others. To spend the money, they had to suspend a voter-approved limit on the growth of government.

“That allowed them to grow government fast,” said Tim Eyman, the populist anti-tax initiative developer and regular critic of Gregoire. “They created a big bubble, and the bottom fell out when the economy went bad.”

Gregoire defends those spending decisions. More than half was spent on education, from early childhood to colleges, she said. The state created a Department of Early Learning, one of her proudest accomplishments. Teachers received raises and classrooms got smaller, as voters had mandated in an earlier initiative that had never been fully funded. The state expanded children’s health programs. It put $228 million into its reserves. When legislators cautioned against saving much more, she noted: “If you do, you’ll get an initiative to say the money has to go back to the people.”

As she was running for re-election in 2008 in a rematch with Republican Dino Rossi, there were signs of an economic slowdown and potential budget shortfalls. Rossi played them up while Gregoire played them down. The results were nowhere near as close as 2004. But the projections were wrong; the recession was longer and deeper than the state’s economic forecasters envisioned.

Uncharted territory

Former Senate Minority Leader Hewitt describes the difference between Gregoire’s first and second terms succinctly: “In her first term, she couldn’t spend enough. In her second term, she couldn’t save enough.”

While it’s true that no one could have foreseen the depth and length of the recession, Jason Mercier of the fiscally conservative Washington Policy Center said Gregoire and Democrats controlling the Legislature did know the state has a history of ups and downs in its business cycle and should have avoided creating such a “bow wave” with new programs that would make spending grow with each successive year. The increased spending may have been for good programs, he said, but “there’s nothing in any budget that somebody doesn’t think is a good idea.”

Faced with a steadily worsening economy, Gregoire fell back on what friends say is a strong point: research and ability to absorb information. The problem was, there wasn’t any of either. The state was in the worst recession since the 1930s and there was no playbook. “No one could relate to this recession. You’re kind of on your own,” she said.

Mercier was among a group of agency heads, business executives, union leaders and policy analysts she named to a group in 2010 to look at ways to do the budget differently. It wasn’t window dressing, he said. “She was open to recommendations from outside entities.”

Some of her budgets during her second term were a combination of program cuts and tax increases. Voters rejected some of those taxes in 2010 and reinstituted a supermajority for tax increases; the next year’s budget proposal closed a new gap with cuts. Over her second term, she proposed cutting programs she’d championed in 40 years of government life, from Puget Sound cleanup to children’s health.

“When you’re in a recession and you’re governor, you just have to say, ‘These are the cards I was dealt. Get up. Use your head. Use your heart. … Get it done,’ ” she said.

The state made changes to its workers’ compensation and unemployment insurance systems, consolidated some agencies and studied better management techniques. It cut pay and ordered furloughs for state employees, who had supported Gregoire’s election and re-election.

Greg Devereux of the Washington Federation of State Employees said they faced cuts that were more severe than necessary. “We didn’t see any other groups around the state make the same sacrifice,” he said, adding businesses didn’t give up the tax exemptions they’d been granted over the last several decades. But the budget decisions were made jointly by Gregoire and the Legislature, and the governor at least was quick to tell the public that state employees had done their share or more, he said.

Reaching a budget often meant late-night negotiating sessions with warring factions in the Legislature. Negotiations like that were where Democrats and Republicans agree she was at her best.

“Her entire career, her strength was in negotiating, getting conflicting interests to put a deal together,” said former Senate Majority Leader Lisa Brown of Spokane. The two first met over the negotiating table, when Gregoire was the attorney general who had negotiated a multibillion-dollar settlement with tobacco companies, and members of the Legislature, including Brown, wanted to “securitize” part of it by selling bonds. Gregoire lost and Brown won.

“She took the initiative to say ‘I think I was right but I move on.’ And she did,” Brown said.

Earlier this year, the Legislature deadlocked over the budget, and time was running out on a special session called to settle the spending plan. “It was beginning to look like we just couldn’t get there,” Brown said. “Her style is to thoroughly understand where both sides are coming from. She says, ‘What’s the proposal that meets everybody’s needs here?’ ”

Social issues

Gregoire didn’t have to worry about her own election or re-election on Nov. 6. But the 2012 ballot had a measure that will likely be part of her legacy, a law to allow same-sex couples to marry in Washington. A Roman Catholic, she had supported the change for less than a year, backing instead state laws for domestic partnerships. It was her children’s opinions that families headed by gay couples they knew deserved the same rights as other families that tipped the balance for her, she said at a news conference a few days before the Legislature convened.

Opponents said the state didn’t need such a divisive issue in a year with yet another budget shortfall. “I told her I was going to blame her if we went into a special session for introducing the gay marriage bill. We did, and I do,” Hewitt said.

The issue did roil the Legislature for a month, but Gregoire stood firm, came to the legislative wings to monitor the votes and signed the bill on Feb. 13. On Nov. 6, she was with supporters in Seattle as voters ratified the decision.

“It’s a rare moment that anyone can look out to the faces of people who have suffered discrimination and then say I was a little part of taking that discrimination away,” she said.

Same-sex marriage was an issue whose time had come for Washington, she said. Time will come, too, she said, for a new structure for the state to tax its residents and businesses more fairly, support schools, and better navigate economic ups and downs.

“I’m not calling for new taxes, but the structure we have in place right now is regressive and not fair in terms of business tax and it is absolutely (geared) to yesterday’s economy,” she said. “This won’t be our only recession.”