Someone had to go first, and Gov. Chris Gregoire apparently drew the short straw.
The governor took the lead for law-makers Wednesday, offering a tax package to help fill the $2.8 billion hole in the state budget. Her plan: raise $605 million in targeted tax increases and recapture $154 million more by effectively invalidating a recent court ruling that favored out-of-state businesses.
Gregoire had previously retreated from offering a second version of the all-cuts budget she proposed in December. But it had become apparent that Democrats in the Legislature, deeply divided over the size of a tax package and rightly fearing a backlash, weren’t going to make the first move.
“At the end of the day somebody’s got to step off the curb,” Gregoire told reporters.
And so she did, right into the path of a moving bus. Several of them, actually. Republicans and businesses say her plan is irresponsible for raising taxes. Liberal Democrats say it’s irresponsible for not raising more taxes.
At least Gregoire got the debate started.
The governor places the burden where it should be: on budget cuts. She would still trim $1 billion from the short-term cost of state government, using the additional tax revenue to “buy back” crucial services such as health care for the working poor and state need grants for college students.
Gregoire also relied largely on smaller, targeted taxes. They have the unfortunate effect of concentrating the pain on a few industries, but they would be easier to roll back once the state is out of this crisis.
The same can’t be said for the flawed proposal to triple the state’s tax on petroleum, pesticides and other chemicals that Gregoire embraced. Its justification is stormwater cleanup, but most of the money would flow to the general fund – and legislators would likely find it hard to turn back that tide in future years.
Lawmakers also should beware diminishing returns. A tobacco tax that adds $1 to the price of a pack as Gregoire has suggested is likely to drive smokers to shop for their smokes elsewhere.
Unfortunately, perfect solutions exist only in hindsight this year. As much as the economy has battered Washington, so too has lawmakers’ inability to say no during flush years. Now the state has few outs that won’t leave the safety net in tatters and higher education in shambles.
Perhaps the best attribute of Gregoire’s plan is how it undercuts her fellow Democrats’ call for greater reliance on new revenue. Every additional tax dollar they take is another roadblock to recovery – of the state economy and of state coffers.
Legislators can’t tax themselves out of this hole. A sustainable budget still depends on making meaningful changes to the way state agencies operate. Lawmakers – Democrats and Republicans alike – have put forth some sweeping proposals for reshaping, reorganizing and reforming government. The extent to which they survive the session will indicate how serious the Legislature is about not taking the easier way out.
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