OLYMPIA, Wash. (AP) - For most of Gov. Chris Gregoire's first term, Olympia's ruling Democrats were flush and happy.

With their majorities steadily growing and tax collections surging, they were able to pump up priorities like health care, education, environment and unionized workers, while still socking away millions for a rainy day.

Boy, is it ever raining now. On Monday, lawmakers kick off a 105-day session that's already starting to feel like an epic hangover. Their task: Fixing a 2½-year budget gap that some think could reach a jaw-dropping $7 billion.

"It could get worse before it gets better," said Senate Majority Leader Lisa Brown, D-Spokane.

As promised during her re-election campaign, Gregoire has proposed a budget that does not raise taxes to bridge the budget gap, presently pegged at about $5.7 billion.

Instead of raising taxes, she would trim spending by about $4 billion, including service cuts, pension changes, and not paying for various labor contracts, according to an analysis by the Senate Ways and Means Committee.

Gregoire also assumes about $1 billion from a federal bailout, and makes up the rest by transferring money, spending from the new Rainy Day Fund, collecting taxes more effectively and opening more liquor stores.

Lawmakers, as always, will have different priorities.

At The Associated Press' recent pre-session forum, House Speaker Frank Chopp, D-Seattle, used strikingly dire language to describe his opposition to proposed spending cuts in "safety net" programs for the poor.

"If we don't handle this situation correctly, a lot of people could die," Chopp said. "So it's important that we look at the budget not just as a financial document, but as a moral document as well."

Gregoire has, so far, excused herself from any discussion of higher taxes, saying that even the prospect of widespread government layoffs are preferable to dinging businesses and consumers in this historically bad economy. In doing so, she is taking the kind of steps for which she excoriated her Republican opponent, former state Sen. Dino Rossi, in the fall campaign.

The Legislature operates under voter-approved constraints for raising new money, and majority Democrats alone can't get the required two-thirds majority to raise taxes without a vote of the people.

If lawmakers do try putting a revenue package on the ballot, Gregoire has pointedly noted that it would bypass her and head straight to the voters. But the governor might temper that stance by offering less opposition when lawmakers start to tinker with her suggested policy decisions.

"If somebody's got a better idea, we're open to it," said Marty Brown, Gregoire's legislative director. "If a priority that we did not fund is deemed a higher priority than something else, then we're open to that discussion."

But even if the Legislature can't tolerate Gregoire's plan, don't expect discussion of new taxes to spring up right away.

Top lawmakers say they need to go through some heavy-duty budget cutting first, and see what President-elect Barack Obama sends along in a stimulus package before discussing any possible revenue package. In March, they get another update on the state's projected finances, but nobody's expecting that to improve things.

Conventional wisdom holds that the Legislature will eventually combine spending cuts and one-time money with a package of taxes to pay for specific programs, perhaps the previously endorsed teacher pay and class-size initiatives. If the public doesn't want to pay for those things, they could go away, at least temporarily.

All the doom and gloom is quite a contrast from recent legislative sessions, when Gregoire and majority Democrats leveraged a hot economy to spend more, save more, and raise more money. All told, the state budget grew by about a third during Gregoire's first term.

Now, of course, the blame game is in full swing. Republicans have said for years that Democrats were tempting fate by not saving enough money, and say the shortfall should be no surprise.

Democrats are pointing to the national recession, the worst in many years, and point out that everyone is hurting. It wouldn't have been possible, they say, to save your way to $6 billion or $7 billion.

Both sides have a point. When they gaveled the last session to a close, Democrats knew the next two-year budget was already projected to be short by about $2.5 billion. But even that gap would have been relatively manageable without the next $3 billion-plus, courtesy of the national economic collapse.

As much oxygen as the budget will consume, it's still a 105-day session, with plenty of other ideas and projects simmering in the wings.

Statewide elected officials, for example, have been rolling out their wish lists this week. Attorney General Rob McKenna wants to strengthen government "sunshine" laws, and Secretary of State Sam Reed wants to change the deadline for sending in absentee ballots.

Lawmakers already are filing their usual assortment of bills ranging from serious to silly, including property-tax overhauls and an official state candy. Battles also loom over a replacement for Seattle's rickety Alaskan Way Viaduct and King County's stadium-financing tax streams, among others.

The promised federal stimulus package could raise spirits, and Gregoire and lawmakers want a state-specific twin aimed at boosting employment, particularly in the construction sector. Look for that effort to play the role of "good cop" against this year's budget-cutting exercise.

After all, there's got to be some good news, right?

"It is what it is," said Senate Joe Zarelli, the Senate GOP budget chief.

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