OLYMPIA — Gov. Christine Gregoire yesterday announced plans to cut 1,000 state government middle-management jobs in a move widely seen as a prelude to a budget proposal that will include more cuts and a tax increase.

Saying the state has "too many people pushing paper," Gregoire said the job-cuts proposal would save $50 million. "We must reduce bloated middle management."

Gregoire announced other cost-saving measures as well, such as changing the way state agencies buy goods to get cheaper prices and closing the state film office. Most of the items she outlined, including the layoffs, require approval by the Legislature. Altogether they're projected to save a little more than $120 million, an amount that does little to offset a budget shortfall estimated at more than $2 billion.

However, Gregoire said that's only the start. "There's got to be more cuts than I've announced today, without question," she said.

The governor maintained she still hadn't decided whether to propose a tax increase; however, Democratic leaders in the House and Senate expect a "modest" tax proposal in the budget Gregoire is expected to release Monday.

Senate Ways and Means Chairwoman Margarita Prentice, D-Renton; House budget chief Helen Sommers, D-Seattle; and House Majority Leader Lynn Kessler, D-Hoquiam, all said there's a general expectation that the governor will propose some sort of tax increase.

Options that have gotten the most discussion lately by lawmakers include so-called "sin taxes," on items such as cigarettes, and bringing back an estate tax that was knocked out by a recent state Supreme Court ruling.

Gregoire has talked at length about preparing a budget without new taxes but has always left open the possibility of a tax proposal to help balance the budget.

The governor said she's waiting to see if a revenue forecast due today shows the state is taking in more tax money than expected before making a decision. Most budget writers expect a boost of a few hundred-million dollars.

The governor in recent weeks has committed herself to protecting certain proposed increases in spending, namely around $600 million for pay raises and benefits for state workers and teachers.

Gregoire yesterday also said that in her budget "I'm not going to turn my back on the children of Washington, I'm not going to turn my back on education and health care for our citizens. "

Republicans yesterday applauded Gregoire's cost-saving measures but said they don't go far enough. "It's a great first step," said Senate Republican Minority Leader Bill Finkbeiner, R-Kirkland.

Most of the managers affected by Gregoire's layoff proposal are part of a program called the Washington Management Service, which was started by the Legislature in 1993 to foster the development of managers. The program, which has about 5,400 managers, accounts for roughly two-thirds of all state middle managers.

Some of the middle managers have bumping rights and would be able to take other jobs. However, Eva Santos, the newly appointed state director of personnel, said the state would keep cutting until 1,000 jobs were eliminated.

The state workers union applauded the proposal.

"It's out of control. Rank-and-file state employees absolutely hate it [the Washington Management Service] and believe the resources could be better used delivering front-line services," said Tim Welch, a spokesman for the Washington Federation of State Employees union.

Dorothy Gerard, assistant director of the state Department of Personnel, said the management service represents the "core of ongoing leadership in state government. Most of the people who are in those positions have worked their way up through the ranks," she said.

Andrew Garber: 360-943-9882 or agarber@seattletimes.com