OLYMPIA, Wash. - Outgoing Washington Governor Chris Gregoire is proposing to extend two temporary taxes for three-and-a-half years in order to make a $1 billion down payment on a recent Supreme Court ruling that found the state is not adequately funding public schools. Much of that new money would go to reduce K-2 class sizes, speed up the phase-in of all-day kindergarten and help districts with basic operating and maintenance costs.
Gregoire, a Democrat, also wants the legislature to enact a new wholesale excise tax on gasoline and diesel that would ratchet up over the next six years in order to "fully fund" Washington's new obligations to pick up more of the tab for school bus transportation.
The tax proposals are part of the Governor's final budget blueprint before leaving office.
Her successor did not embrace the plan. In a statement, Governor-elect Jay Inslee thanked Gregoire for her “thoughtful effort” and said he will “lay out his own budget priorities that reflect his vision for state government.”
Gregoire also proposes to close a $900 million shortfall in the next two year budget with a combination of cuts and revenues. On the revenue side of the ledger, Gregoire would repeal a fuel use tax exemption that she says primarily benefits oil refiners. That would raise $63 million in the next budget. Gregoire would also extend the Hospital Safety Net Assessment, also known as a "bed tax," to raise $276 million over the next two years. Hospitals have traditionally lobbied for the Assessment because it triggers additional Medicaid match dollars from the federal government.
In a press release announcing the budget, Gregoire says without these additional revenues the state would have to:
- Eliminate the state-only funded Food Assistance program for legal immigrants who do not qualify for the federal food stamp program
- Reduce levy equalization money, which goes to property-tax-poor school districts, by $100 million
- Cut higher education by $52 million across-the-board
In response, State Senator Andy Hill, R-Redmond, the apparent new chair of the budget-writing Ways and Means committee, put out a statement that says in part, "we are moving forward under the assumption that additional taxes are not an option."
In her final budget, Gregoire also proposes to increase funding for some of her signature programs.
- $50 million for additional early learning/pre-school enrollment slots
- $20 million to expand science, technology, engineering and math (STEM) at public colleges and universities
- $19 million for cash-starved state parks
In recent weeks, Gregoire has lamented that she was unable to dedicate more money toward the clean up of Puget Sound. However, her proposed operating, transportation and capital budgets, taken together, fund $500 million worth of projects aimed at protecting Puget Sound.
Gregoire's last budget could serve as a roadmap for Governor-elect Jay Inslee, also a Democrat. However, he campaigned on a no-new-taxes platform. Additionally, the coalition of Republicans and two Democrats who recently announced they will form a majority to lead the state Senate have said taxes will not be part of their solution to the state's ongoing budget woes.