Gregoire, lawmakers may clash on more federal aid to Wash.
OLYMPIA, Wash. (AP) - Will Uncle Sam rescue Washington's budget? It's one of the biggest questions bouncing around the Capitol after the first week of the 2010 legislative session.
Gov. Chris Gregoire certainly hopes so. Having given lawmakers enough political cover to openly pursue new revenue, the second-term Democrat is now eager for another federal bailout to take the place of a major tax hike.
The Democratic base, not so much.
As the Legislature's budget-writers roll up their sleeves to work on the state's $2.6 billion budget deficit, advocates for labor, the environment and the poor are arguing loudly for new tax streams to pay for ongoing state programs.
Their argument: Any federal windfall that Congress and President Obama might unleash this year is only good until the money's gone. After that, you're still left with a mountain of unpaid bills, on top of billions in stimulus aid and other one-time money used to prop up the budget last year.
"We're very concerned that if we get this one-time shot of federal money, that will - how would you say it? - put less pressure on the Legislature to deal with a revenue package," said Rick Bender, president of the Washington State Labor Council.
Heck, if Democrats' only choice is between higher taxes or another federal bailout, even a leading Republican lawmaker thinks they'd be better off seeking new revenue for their favorite projects.
"At least that money's going to be there again in the future," Senate GOP budget chief Joe Zarelli, R-Ridgefield, said last week.
Talk of a second federal bailout reached new heights after Gregoire unveiled her latest plan for patching the budget deficit.
Her proposed solution would cut about $950 million in spending, hitting various social services, work study for college students, and programs to shrink class sizes in public schools. Another chunk, roughly $900 million, comes from tapping reserves and raiding smaller accounts that aren't part of the main operating fund.
But she's also calling for about $780 million in spending to preserve key state programs. That "buy-back" list includes the Basic Health Plan, which provides low-cost health insurance for the working poor; State Need Grant financial aid for college students; and Levy Equalization, a system of subsidies for public schools with a lower-than-average property tax base.
At the Legislature's request, Gregoire didn't suggest any major new tax sources to pay for those programs. She did, however, outline about $105 million that could be reaped from tweaking the tax code.
That's where the federal money comes into play. While the details are still fluid, Gregoire says her conversations with Washington's congressional leaders and the Obama administration indicate that the state could reap nearly $1 billion in federal aid this year.
In Gregoire's mind, that money should be used to replace potential tax hikes. She still has a list of tax options on hold, but wants to avoid using it, worried that squeezing more money out of the private sector will crimp the nascent economic recovery.
"I can't see taking federal dollars, buying $1 billion, raising taxes for the remainder - my $700 million - and sitting here one year from now, in the identical or a worse crisis," Gregoire said.
"If given the choice, I wouldn't put taxes out there," she added.
Some of the Democratic majority's biggest supporters, however, don't see it that way. Instead, they're urging lawmakers to consider federal aid as a supplement to tax increases.
At least one top Democrat appears to be sympathetic to that point of view.
"We believe that the federal dollars are going to be very helpful," said Senate Majority Leader Lisa Brown, D-Spokane. "But they're not going to take away the need for some ongoing revenue."
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Associated Press writer Rachel La Corte contributed to this report.
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Gov. Chris Gregoire certainly hopes so. Having given lawmakers enough political cover to openly pursue new revenue, the second-term Democrat is now eager for another federal bailout to take the place of a major tax hike.
The Democratic base, not so much.
As the Legislature's budget-writers roll up their sleeves to work on the state's $2.6 billion budget deficit, advocates for labor, the environment and the poor are arguing loudly for new tax streams to pay for ongoing state programs.
Their argument: Any federal windfall that Congress and President Obama might unleash this year is only good until the money's gone. After that, you're still left with a mountain of unpaid bills, on top of billions in stimulus aid and other one-time money used to prop up the budget last year.
"We're very concerned that if we get this one-time shot of federal money, that will - how would you say it? - put less pressure on the Legislature to deal with a revenue package," said Rick Bender, president of the Washington State Labor Council.
Heck, if Democrats' only choice is between higher taxes or another federal bailout, even a leading Republican lawmaker thinks they'd be better off seeking new revenue for their favorite projects.
"At least that money's going to be there again in the future," Senate GOP budget chief Joe Zarelli, R-Ridgefield, said last week.
Talk of a second federal bailout reached new heights after Gregoire unveiled her latest plan for patching the budget deficit.
Her proposed solution would cut about $950 million in spending, hitting various social services, work study for college students, and programs to shrink class sizes in public schools. Another chunk, roughly $900 million, comes from tapping reserves and raiding smaller accounts that aren't part of the main operating fund.
But she's also calling for about $780 million in spending to preserve key state programs. That "buy-back" list includes the Basic Health Plan, which provides low-cost health insurance for the working poor; State Need Grant financial aid for college students; and Levy Equalization, a system of subsidies for public schools with a lower-than-average property tax base.
At the Legislature's request, Gregoire didn't suggest any major new tax sources to pay for those programs. She did, however, outline about $105 million that could be reaped from tweaking the tax code.
That's where the federal money comes into play. While the details are still fluid, Gregoire says her conversations with Washington's congressional leaders and the Obama administration indicate that the state could reap nearly $1 billion in federal aid this year.
In Gregoire's mind, that money should be used to replace potential tax hikes. She still has a list of tax options on hold, but wants to avoid using it, worried that squeezing more money out of the private sector will crimp the nascent economic recovery.
"I can't see taking federal dollars, buying $1 billion, raising taxes for the remainder - my $700 million - and sitting here one year from now, in the identical or a worse crisis," Gregoire said.
"If given the choice, I wouldn't put taxes out there," she added.
Some of the Democratic majority's biggest supporters, however, don't see it that way. Instead, they're urging lawmakers to consider federal aid as a supplement to tax increases.
At least one top Democrat appears to be sympathetic to that point of view.
"We believe that the federal dollars are going to be very helpful," said Senate Majority Leader Lisa Brown, D-Spokane. "But they're not going to take away the need for some ongoing revenue."
---
Associated Press writer Rachel La Corte contributed to this report.
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