Governor Gregoire unveils budget

Governor Christine Gregoire today unveiled her proposed state budget for the upcoming biennium. In terms of new revenue, the Governor has proposed the following:

• Boosting the state cigarette tax by 20 cents a pack, or $2 a carton. The tax is now $1.425 cents a pack, one of the higher rates in the country. The proposal would generate $79 million in the next two years.


• Partially restoring the state's estate tax, which was recently struck down by the state Supreme Court. Her plan would tax only estates of over $2 million and would exempt farms. The plan would raise $129 million.

It's a shame the governor didn't include other ideas, such as expanding the sales tax to cover some businesses that are enjoying a free ride thanks to the fact they are exempt from the sales tax. But at least the budget calls for new revenue.

The Governor had this to say about the GOP's "live within our means" rigidity:

Gregoire said her proposal "gets us out of the rut that the national recession left us in. In government, there's a feeling that if we just hunker down and make do with the status quo, we can get by. Trouble is, the status quo kills you. You might think you're holding your own but you're not.

And, finally, more budget details, borrowing heavily from the AP:

The extra money helps the Legislature restart both of the state's voter-approved education initiatives: Initiative 728, which gives local school districts grants for class-size reduction and other local priorities, and I-732, which provides annual cost-of-living raises for teachers.

The two initiatives were largely suspended two years ago during the recession, but today the economy is recovering and the state should keep its commitment, Gregoire said. The cost for both is $277 million in the next two years.

Gregoire also proposed $42 million to help struggling high school students catch up and $50 million to offer better special education to students with disabilities.

The governor's plan provides $220 million for a salary package for state employees. The raise will be 3.2 percent in the first year of the biennium and 1.6 percent in the second. The average increase would be $40 a week before taxes.

Her proposal includes more money for health care, including coverage for 47,000 more children, and maintains coverage for 100,000 people under the state-subsidized Basic Health Plan. The children's coverage costs $59 million; the BHP appropriation is an additional $49 million.

College enrollment slots are proposed for 6,600 more students. Tuition increases are proposed, along with $27 million in additional student financial aid.

Gregoire provides $80 million for community mental health clinics to replace lost federal dollars.

The governor reduces prison costs by $36 million and proposes construction of a new prison at Connell, a $270 million project that would be built by the private sector and then leased back to the state, which would operate it.

Gregoire proposed $75 million in parks projects.

The governor said her tax package is just 39 percent of the $517 million the state recently lost from two adverse decisions by the state Supreme Court.

"The tax losses deepened an already severe budget shortfall amid growing demands for education, health care and social services," the governor's office said in releasing the new budget-and-tax plan.

More analysis of the state budget to follow.