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Gregoire’s budget: Making a list

Washington State Governor, Christine Gregoire Credit: Wikimedia Commons

In reality, Gov. Chris Gregoire's 2013-2015 budget proposal is more of a list of fix-it ideas than a package likely to begin its way through the Legislature.

Her plans to fix the state's education woes are somewhat similar to ones that Democrats are hatching in the Legislature.

Gregoire unveiled her budget proposal Tuesday — which includes proposed wholesale fuel and junk food taxes, while preserving a hospital bed tax, a business and occupation surcharge and a beer tax that are scheduled to expire next year.

It is hard to say how much of Gregoire's proposed budget will actually gain a foothold in the Legislature in January, since she will not be present to push for it. Her proposal does outline hurdles that Gov.-elect Jay Inslee, the Democrat-dominated House and a Republican-oriented Senate will face.

Gregoire said her staff looked into numerous bureaucratic and legislative nooks and crannies to avoid cuts in state money to local school districts, local governments and colleges  —  as well as to social programs.

"We've looked everywhere to find better (budget fix-it) ideas. We have not found any better ideas," she said.

Inslee and Gregoire did not consult with each other on her budget package, meaning he will unveil his own proposal in January. Inslee has been declaring he will not raise taxes, a stance that Gregoire says is not realistic with the state's budget shortfalls. However, Gregoire said Tuesday that Inslee has not ruled out keeping existing taxes from expiring. On Tuesday, Inslee released a statement that voiced no pro or con opinions on Gregoire's proposal.

Meanwhile, an alliance of 23 Republicans and two maverick Democrats control the Senate, united in their own no-new-taxes stance. The House Republicans   —  a minority  —  hold that same position. House and Senate Democrats believe new taxes and other revenue sources are needed to meet a massive shortfall in education funding that the Washington Supreme Court ruled that the Legislature must fix by 2017-2019.

Rep. Gary Alexander, R-Olympia and the House's Republicans chief budget writer, said, "The fact that her budget increases spending by about $3 billion and includes around $1.2 billion in new taxes leads me to believe her proposals are dead on arrival. Her budget tied student transportation funding to one of the most volatile funding sources —  a tax on the wholesale price of gas. She also ties certain health care funding to new taxes on beer, candy, soda and gum  —  something the voters soundly rejected just a couple years ago."

Gregoire's proposal would increase the operating budget from $31 billion in 2011-2013 to $34.1 billion in 2013-2015  —  a $3.1 billion increase. That is close to earlier  predictions that the 2013-2015 operations budget would be in the neighborhood of $33.5 billion. Gregoire's proposal would also leave $882 million left over, compared to $460 million for 2011-2013.

Her proposal assumes a $1.375 billion shortfall in non-education programs — an original $975 million shortage, $275 million in new policy additions and an extra $125 million in the upcoming biennium due to an arbitrator awarding salary increases for more than than 40,000 home health care workers of SEIU Local No.775 in October after a four-year wage freeze.

Gregoire proposed $1.45 billion in cuts, budget shifts and tax measures to tackle the $1.375 billion shortfall. She proposed the soda, candy and gum taxes to raise the $125 million for the SEIU arbitration award. She would eliminate $360 million in cost-of-living salary increases for teachers. She would repeal $63 million in tax exemption. A hospital bed tax due to expire would be kept, retaining another $276 million. The rest would be tackled with budget shifts and unspecified program cuts.

All this does not include what Gregoire maps out as a $1 billion shortfall in what the state needs to meet its constitutional obligations to fund education.

She called for shifting the school transportation costs to the state's transportation funding and raising $367 million for the transportation fund with with a wholesale fuel tax of 1.85 cents per $1 worth of fuel in 2013-2015, growing to 4.62 cents per $1 worth of fuel in 2017-2019. She also called for not letting expire a 0.3 percent business and occupation service surcharge and a 50 cents per gallon beer tax — which would take care of $636 million of the $1 billion education funding shortfall predicted by her staff.

On Monday, a bipartisan education funding task force made its fix-it recommendations — with its Republican members dissenting. The task force's recommendations include a list of several proposals with the idea that some — not all — might gain a foothold against the Republicans' and Inslee's no-new-taxes stances. Meanwhile, Republicans want to limit measures to trimming what they contend are low-priority social programs and excess fat elsewhere.

Meanwhile, the task force and Gregoire unveiled different financial figures on similar issues and proposals, such as:

  • Gregoire assumes a $1 billion education shortfall for 2013-2015, while the task force is looking at a $1.4 billion to $1.6 billion education shortfall for the same biennium. Gregoire's non-education shortfall figures are more recent than the task force's figures, with her putting the non-education shortfall at $1.375 billion. Using Gregoire's non-education figures, the total 2013-2015 shortfall would range from almost $2.4 billion to almost $3 billion, depending on which education figures are used.
  • Republicans on the task force propose raising $924 million for the education shortfalls with cuts in non-education programs; they envision no tax increases.
  • The task force's figures on retaining the hospital beds, beer and B&O taxes say that would amount to $650 million to $800 for the biennium. Gregoire's calculations put the figure at $912 million.
  • Gregoire and the task force both call for moving school transportation costs to the state's transportation fund. Gregoire earmarked the proposed wholesale fuel tax to help the transportation fund on this matter. The task force has no specific revenue source identified for the extra burden on the transportation fund.
  • Democrats on the task force call for teachers and administrators to receive salary increases. Republicans on the task force oppose those increases. Gregoire would eliminate the teachers' cost–of-living salary increases, which the legislature has done for several sessions to balance previous budgets.
  • The task force calls for eliminating up to $250 million in tax exemptions for 2013-2015; Gregoire is targeting $63 million in tax exemptions for the biennium.
  • The task force has sent up a trial balloon of a capital gains tax on more than the first $10,000 in such earnings, which is projected to raise $650 million to $1.4 billion a year.
  • The task force floated another trial balloon of several types of property tax changes. The results would raise between handful of dollars to $2.6 billion a year. This proposal includes a state-local levy swap that Inslee opposed on the campaign trail.
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