Locke: New taxes likely
Wednesday, December 1, 2004 7:50 AM PST
By Associated Press
Printable version
E-mail this articleOLYMPIA -- Gov. Gary Locke won widespread praise for producing a no-new-taxes budget that filled a $2.6 billion hole last year. But new taxes may be unavoidable this winter as lawmakers deal with a new shortfall, the lame-duck governor said Tuesday.
Democrat Locke, a former House appropriations chairman, called his first news conference in his newly reopened Capitol suite, and returned to a familiar theme that has plagued Olympia for years: spending demands far outstrip income.
Locke said no final decisions have been made, but left little doubt that he'll propose a 2005-07 state budget that uses both spending cuts and revenue increases to patch a projected $1.6 billion shortfall.
The state's two-year general fund budget has been running about $23 billion.
Gov.-elect Dino Rossi, a Republican former Senate budget chairman who partnered with Locke to write the no-new-taxes budget last year, rejected Locke's premise.
"We don't have to raise taxes to do this," Rossi told a Bellevue news conference. "There is a way to put a budget together to make it work. We're already working on it. Rest assured, the sky is not falling."
His Democratic opponent, Attorney General Christine Gregoire, hasn't conceded and is expected to seek a manual recount. During the campaign, she said the state is recovering from a recession and that it's the wrong time to raise taxes. She didn't slam the door on taxes, however, and some legislative Democrats say new revenue should be considered.
Locke began making the case for a tax hike as part of the solution.
"Our $1.6 billion problem threatens our ability to provide critical state services and puts our future at risk," Locke said. "There are some incredibly hard choices to make and we will be considering many options as we make the final decisions."
Locke releases his budget proposals on Dec. 16. If history is a guide, the lame-duck budget will be an important starting point for the new governor and incoming Legislature.
Locke said he hasn't settled on the proportion of taxes and cuts he'll propose -- or decided on the revenue sources he'll suggest.
"It may not be a general tax increase. It may be sin taxes (on such items as tobacco, cigarettes and candy) or fees for various services," he said.
Locke acknowledged that voters this month trounced a proposed 1-cent sales tax hike that would have raised $1 billion a year for education. People supported the spending, but didn't want a sales tax hike that big, he said. A smaller sales tax increase might be more palatable, he said.
Locke said the $1.6 billion gap includes unavoidable increases for health care and pension contributions, plus newly negotiated public salary increases, higher education improvements and full funding for voter-approved education initiatives.
The state has a "structural problem" of a revenue system that doesn't meet the basics, he said.
To put $1.6 billion in perspective, that's what the entire four-year university system costs or roughly what the state pays for prisons, Locke said. Deep cuts could hit health care programs and education and could mean more students being turned away from colleges, he said.
The budget office is working to identify the must-do functions of state government.
"We will let the folks know what we can afford to provide within expected income and it will be up to the people of Washington to say if this is acceptable to them," he said. "People have to decide what they expect and demand of state government services and how to pay for it."
His views brought a sharp reply from the Evergreen Freedom Foundation, a conservative think tank.
"Despite once again citing the numerous awards and accolades his budget reforms have received, Locke is clearly unwilling to fight for a true priority-based budget," said Bob Williams, foundation president.
Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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