Article by Erik Smith. Published on Tuesday, March 09, 2010 EST.

Gregoire Lays Out Her Plan for the Next 30 Days

By Erik Smith

Staff writer/ Washington State Wire

OLYMPIA, March 9.—Two days before the end of the 2010 legislative session, Gov. Christine Gregoire began laying out her plan for the next one – which presumably will start the following day.

            A special session is all but certain now, as Democrats find themselves up against a Thursday deadline to work out all their differences on budget and tax issues. Even if they manage to reach agreement before the deadline, there still wouldn’t be enough time to send the budget bills to the printer. Passing them would take even longer, as powerless minority Republicans are in no mood to let anything pass without hours of fiery speeches on the House and Senate floors.

            On Tuesday, Democrats in the House and Senate were just starting the negotiating process, by appointing committees to go behind closed doors and hammer out agreements on budgets and taxes.

            Gregoire took the genteel approach as she met with reporters Tuesday, declining the opportunity to announce that a special session is a certainty. “We’ll face that on Thursday,” she said.

            But she laid out what she expects to see happen before lawmakers go home – a lengthy list of conditions that ultimately she cannot enforce. She acknowledged that she has the power to call lawmakers back into session, but she can’t tell them what to do.

            “Once I call them into session, I don’t dictate what can be discussed, and furthermore I don’t dictate how many days they get, up to 30 days. So the option is really to call them back right away, or send them home and call them back, if they are not able to do a budget at a later date.

“I really don’t think I can address that today,” she said. “I think that’s an issue for Thursday.”

            What Gregoire Wants

Gregoire said she hopes to see lawmakers take action on education reform and job-creation proposals from her office that have languished so far this session. She also said she wants lawmakers to consider seriously proposals to close state institutions to save money, and to find a way to leave a large enough cushion at the end so that she won’t have to call lawmakers back to deal with a small-scale downturn. She recalled advice from former Gov. John Spellman, who was forced to call lawmakers back to Olympia several times during a deep recession in the early ’80s.

“The last thing we want to do is to send a message that we don’t have anything in reserve to those who will rank us for our bonds, or for that matter to avoid the necessity of coming back into another special session, an admonition from Gov. Spellman to me to avoid in tough economic times.”

Obviously, lawmakers have to come to some sort of agreement on budget and taxes, she said. There are some enormous differences between the House and Senate, particularly a sales-tax increase proposal from the Senate.

Gregoire said she isn’t crazy about that idea.

“The one thing I’ve learned here is that you never say never, and you never say always,” she said. “I can’t tell you how many times I’ve said I don’t like a sales tax. I don’t like a sales tax. I have talked with economists who I think are quite reputable and had them tell me that in a normal time there would be no problem with raising the sales tax, because it is equal among all taxpayers. But at a time like this of dramatic recession, and realizing that we only have seen a small uptick in our housing industry and in our nonresidential [construction], we probably haven’t even hit bottom yet.”

Full Text of Gov. Christine Gregoire’s Statement

“Obviously, the end of the session is in sight. We’re in the home stretch, and I want to thank legislators for very hard work in a very hard and difficult situation.

“It is clearly a historical legislative session, but they have gotten some very important things done. I congratulate them on the constitutional amendment on setting up bail that will go to the voters and a bill that supports the constitutional amendment has passed both houses.

“I’m pleased that we’re proceeding with the 520 bridge. That’s very important to the entire area and to our future economy.

“We’re making progress on government reform, particularly in the area of eliminating boards and commissions

“But the fact of the matter is there’s more work to be done. When I began putting my budget together a year ago, I saw up close and personal how difficult it was for me, let alone trying to achieve 25 and 50 votes. We’re now at the point where we need 25, 50 and one, and there’s a lot of work to be done but I’m very optimistic we can get it done.

“They have been looking at those cuts in the eye as I did, and have concluded that to make an all-cuts budget would be unwise and unfair. We are at a crossroads, in my opinion. We are in some of the hardest, most difficult times our state has faced since the depression, and so now it’s our time to shape the future.

“Those who sit by and criticize, I say come on board and let’s be part of the discussion. Be part of the solution and not part of the problem.

“I want you to know exactly what’s happening around the country. If we look at Arizona, they have had to mortgage their Capitol. They’re closing down the public rest stops. They’re canceling construction projects. They’re using transportation funds to fill their operating budget, which we can’t do here.

“We can look at California whose bond status is now literally junk bond status. We’re not going down that road. We’re managing the crisis, and we’re going to have a final budget that I’m very optimistic that will have the priorities for the economic future for us. I know that’s a bit there’s some difficult decisions to make upstairs.

“I know that we’re facing some potential for a special session. Last year 22 states went into a special session. We managed to deal with the crisis on time last year. So far three states are in a special session.

“What’s more important to me is that they get the job done and get it done well, so we’ll face that on Thursday. But I know there’s a lot of speculation we’re going to have to go longer.

“The one thing I do know we need before anybody goes home is reforms in our K-12 system. We’ll continue the dialogue about that in the next couple of days, but were going to have to be able to make that happen, not only for ‘Race to the Top,’ but more importantly to me, for the success of our children, so that will be a central piece before anybody goes home.

“We’ve also got to set the state on the path to more economic gains and more economic recovery. I submitted a number of bills for job growth in the state. There has not been a lot of work on that, because they have been preoccupied with policy bills.

“Now, the ‘bills necessary to implement the budget’ time has come, so I’m asking the Legislature to step up to the challenge of today and put forward some jobs bills, particularly for our distressed counties, some incentives that will allow our construction workers to get back to work. We have, on average, a 29 percent unemployment rate in some areas in Eastern Washington, and in Southwest Washington it’s as high as 50 percent. So we need to get people back to work so they can spend money, so we can provide the necessary resources for our citizens.

“I still want to prioritize government reform. There’s still some more work to be done in the area of closures of our state institutions, and I’m working with them now to make sure that happens. That will not only help to save some money this biennium, but more importantly it will save monies out into future biennia, as we continue to face challenges in the coming biennium.

“The big remaining challenge, obviously, is the budget. I’m optimistic that both the House and Senate budgets that have now passed clearly recognize and send a signal this is about a balanced approach that which I asked for in the beginning. In other words, we need both cuts and revenue.

“Secondly, I do know that they’ve got disagreement on the level of revenue. I prefer my own level, which is to say somewhere just above 600 [million], and that will be fruit for considerable discussion over the next couple of days. But clearly we have got to merge whatever we’re going to do in that regard. I continue to remain very concerned about a sales tax [increase].

“And third, we need to have an ending fund balance that is healthy. The last thing we want to do is to send a message that we don’t have anything in reserve to those who will rank us for our bonds, or for that matter to avoid the necessity of coming back into another special session, an admonition from Gov. Spellman to me to avoid in tough economic times.

“And we’re going to have to come to an agreement on the ending fund balance in the next couple of days. Once they are able to do those three things, I think then we’ll have some breakthrough and be able to negotiate the ultimate outcome of where we can go and finally sine die [adjourn the session].

“Again, I know they’re in a tough and difficult circumstance. My heart goes out to them. I am one vote and they have to secure 25 and 50 and are struggling to do so. So I stand ready to help them. I am doing so, and I’m optimistic we’re going to get out, and we’re going to get out successfully on behalf of the people of the state.”

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