This Washington

Gregoire Calls on Voters to Approve Half-Cent Sales Tax Increase

By Josh Feit November 21, 2011

Gov. Chris Gregoire is asking the legislature to send a temporary half-cent sales tax increase to state voters.

Gregoire's proposal would raise the sales tax temporarily from 6.5 cents to 7 cents.

It would last three years and  raise $494 million: $411 million for education, $42 million million for long-term care and developmental disability services, and $41 million for public safety.

"This is what the people are being asked to pay for with a half a penny," Gregoire said. "I believe Washingtonians are tired of tearing down the foundation that our grandparents and parents built."

Using education funding as an example, Gregoire made her case: "I don't know of a Republican or Democrat that wants to cut levy equalization [between poor and rich school districts]. Well, you can't do it without revenue."

Gregoire said more cuts would "not reflect Washington values."

Asked why voters would go for a tax increase now, given that they just rejected a batch of taxes in 2010, Gregoire said in 2010 voters weren't looking at another $2 billion in cuts after already making $10 billion in cuts in the last three years. "They weren't looking at parolees getting out early and with no supervision. They weren't looking at no services to our most vulnerable citizens. They weren't seeing the fact that we are shredding the budget. This is a new day."

An animated Gregoire rushed over to a pie chart poster when asked about state employees. "I don't know how you can say that," she responded to a reporter who suggested that public employees' refusal to reopen contract negotiations was the problem. Pointing to the chart, she said 19 percent of the recent cuts have come from state workers. "I've told CEOs this week [who've presumably argued for state workers to take cuts], 'you try and lead a demoralized work force,'" she said loudly. "Do you want protection from parole officers? Do we want teachers for our kids? It's time for us to spend a half a penny to invest in the future."

Gregoire also took on the assessment that government is already taking in too much in taxes. She pointed out that in 1994, state revenue collections represented $64 for each $1,000 of personal income, but by 2010 that figure had fallen to $49.

Asked about the regressive nature of a sales tax—that is, poorer people will share more of the burden---Gregoire said, "give me an alternative." She ran through a series of other options that she said she'd ruled out—increasing state business and occupation taxes (she said it would hurt business); a capital gains tax (she said she didn't have the infrastructure or numbers to make the case for it); and closing tax loopholes (she dismissed the popular "$172 million" big bank fix proposed by liberals saying that once you took community banks out of the mix, which liberals support, it wasn't worth that much). (True.)

The governor actually pitched repealing the bank exemption—for $18 million, she said—as part of a a separate $282 million proposal she made to the legislature this morning of potential money makers she thinks the legislature can go after if they believe they can get the two-thirds vote required for raising taxes or closing tax loopholes. Also on that list: increasing the B&O tax rate on oil companies with windfall profits, for $131 million. This package wouldn't go to the voters, but Gregoire attached another list of services that could be restored if the legislature adopted the $282 million proposal.

"When was the last time we raised the sales tax in this state?" she asked rhetorically, "1983. By my Republican friend former governor John Spellman. During a recession not as deep and long as this one. This is not a partisan issue."

(Of course, even though the state hasn't raised the sales tax in all that time, cities, counties, and transit agencies have done so repeatedly to pay for services the state does not or will not provide, like health services for veterans, transit hours, and criminal justice. In Seattle, Gregoire's proposal would raise the sales tax rate from 9.5 percent to 10 percent).

Gregoire is asking the legislature to make an all-cuts budget now during the special session while also approving  the sales tax proposal to send to voters for a March 13 special election. The nearly half-billion package would buy back many of the cuts, such as the up-to 17 percent cut to four-year colleges and universities. She pointed out that the state's four-year colleges and universities have already been cut 46 percent since the recession began.

Gregoire ended the terse press conference with a joke: "Happy Thanksgiving"—a quiet reference to her all cuts alternative.

Here are the specifics of Gregoire's proposal, including exactly what the $494 million would buy back.
Education (K-12 and higher ed):
•Stop a $100 million cut which would shorten the K-12 school year from 180 to 176 days.
•Stop a $152 million reduction to the state’s levy equalization program, which provides financial support to school districts in property poor counties. The Governor’s tiered proposal would reduce school district levy equalization payments by 10 percent to 100 percent.
•Stop a $160 million reduction in state support for higher education. The Governor’s budget would reduce support to the six public four-year colleges and universities by up to 17 percent and would cut the state’s 34 community and technical colleges by 13 percent.

Public Safety:
•Stop the early release (150 days) of offenders assessed at low to moderate risk of reoffending, including sex offenders.
•Maintain the length of post-prison community supervision for all offenders.

Human Services:
•Prevent 1,600 individuals from losing all personal care and other services, and restore service hours, for some of the most vulnerable clients whose care has been reduced over the past three years.
•Restore nearly $13 million in home care and residential provider rates.
•Invest more than $15 million in programs that keep elderly and developmentally disabled individuals in their own homes and with their families.
•Maintain the length of post-prison community supervision for all offenders. The length of supervision will be reduced to 12 months for all offenders, except sex offenders. Sex offender supervision will be reduced from 36 to 24 months.
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