Gov. Gregoire proposes half-cent sales tax hike

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by Associated Press

KING5.com

Posted on November 21, 2011 at 11:19 AM

Updated Monday, Nov 21 at 6:23 PM

Poll:
Gov. Chris Gregoire is proposing a half-cent sales tax increase that would end in 2015 in order to avoid some cuts. If it goes before voters, would you approve it?

OLYMPIA, Wash. -- Gov. Chris Gregoire proposes $1.7 billion in cuts to state government but suggests a temporary sales tax increase to prevent some of the more severe reductions, which include shortening the school year.

Gregoire's proposal to address a projected $1.4 billion deficit was released Monday. It also includes reductions in university support and the elimination of medical programs for 55,000 low-income residents.

But Gregoire, entering her final year in office, proposed up to $835 million in revenue to buy back some of the cuts. She said the priority is a voter-approved temporary half-cent tax increase that would bring in $494 million through 2013. That tax increase would expire in 2015. Gregoire said that under the bill she will present to the Legislature, she wants a special election to vote on the tax to take place in March.

The majority of the money raised by the sales tax would go to education to put back into higher education and ensuring the school year isn't shortened. It would also restore money to public safety.

Gregoire said that she believes that if citizens know there is a real need, and that if the money will go to specific programs, they will support it.

"I know these are tough times for everyone, but our future cannot wait," she said.

In a joint statement issued after the governor's proposal, Senate Majority Leader Lisa Brown and Sen. Ed Murray praised the governor for "exploring every viable option, including additional revenue."

"The governor's proposed budget reflects how few options remain open to the state," wrote Brown, D-Spokane, and Murray, D-Seattle and chairman of the budget-writing Senate Ways & Means Committee.

Senate Minority Leader Mike Hewitt, R-Walla Walla, said a tax increase was not the answer.

"To talk about raising taxes at a time when people are out of work and can't afford it suggests an insensitivity to what the citizens of this state are going through," he said in a news release.

The education cuts account for roughly one-quarter of Gregoire's reductions plan. She proposes shortening the school year by four days, saving $99 million, and reducing support for poor school districts by $150 million.

The state would reduce support for higher education by $160 million -- a 17 percent reduction for the top universities. Past cuts have already driven up tuition to the point that it is expected to double during Gregoire's eight-year tenure in office.

Another $340 million would be saved by delaying a large payment to school districts until the next two-year budget cycle.

In addition to the sales tax increase, Gregoire's other revenue recommendations to the Legislature would bring in an additional $341 million, including $59 million in administrative savings that could pass with a simple majority. However, $282 million of her recommendations would require two-thirds support from the Legislature or would have to go to a public vote.

Those recommendations include a business and occupation tax on oil companies and financial institutions with windfall profits. Gregoire also wants to repeal the sales tax exemption for residents who live in states without a sales tax, like Oregon.

Other major reduction proposals include:

-- Eliminating the Disability Lifeline program and the Basic Health Plan, saving about $130 million. Those programs provide medical services to 55,000 people.

-- Allowing low- and moderate-risk offenders to be released 150 days early from their prison term and reducing supervision for offenders to one year except sex offenders who will be supervised for two years. Offenders are currently supervised for up to three years. The changes would save $41 million.

-- Reducing state funding for subsidized child care by $50 million, ending aid for about 4,000 families who get subsidized care while parents work.

State lawmakers return to the Capitol on Nov. 28 for a special legislative session to consider Gregoire's proposal and to address the state's projected deficit ahead of the regular legislative session that begins in January.

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