Gov giddy over plans for surplus

Gov. Christine Gregoire showed me something I hadn't seen before when she unveiled her budget this week: A governor with unbridled enthusiasm for spending.

For years, governors have talked of the hard choices they had to make in writing the state's two-year spending plan. In tough times, they've increased taxes and trimmed budgets. In good times, they've cut business taxes — billions of dollars worth. But Gregoire seemed as excited by her budget as I was about getting my lights back on after five days in the dark.

"I'm very proud of the budget," she told reporters. "I'm excited about it." She even said she loved her budget.

The conventional wisdom is that governors have it easier when there's lots of money to spend. It's true that saying "no" can be hard. But politically and stylistically, governors can show gravitas in tough times. They earn their stripes that way, biting their lips and looking grim at news of layoffs or acting smart in finding a way out of a dire financial situation.

So Gregoire had a challenge in trying to talk about how an improving economy had given her plenty of money to spend. Of course when politicians increase spending, they don't call it spending. It's investing.

If you wonder why, imagine this line if Gregoire had said "spend" instead of "invest." Her $30 billion plan, she said, is "clearly a budget that says 'invest.' Invest in our economy. Invest in health care. Invest big-time, big-time — a historic investment — in education."

Big-time indeed. More than half the $4 billion increase will go to education, from preschool to university. But there's a long list of things Gregoire wants to spend money on. Among them: more childhood immunizations, higher pay for doctors who see Medicaid patients, Puget Sound cleanup, improvements to state parks. She's adding nearly 3,800 state workers, not including the hundreds of new math and science teachers she wants, too.

She also wants to save some money. She is proposing a new reserve fund and says she'd set aside $600 million.

But long-term projections show that reserve money will be needed in the coming years. When she announced her budget, she said there was a $300 million shortfall predicted for the 2009-11 biennium, and she was comfortable with that. Within an hour, it turned out there was an error and the real shortfall is more than twice as high — even after spending the entire reserve.

The news of a potential $632 million hole down the road was not cause for any changes. That surprised me. Politicians love to relate government budgeting to families' personal finances. A $600 million shortfall at my house would signal some pretty tough times ahead.

But there'll be another Legislature by then, and eight more revenue forecasts that could change the outlook.

Gregoire has decided to bet that the economy will stay strong — at least long enough for her investments to pay off. If not, she'll get a chance to try a little lip-biting.

David Postman is The Seattle Times' chief political reporter. His column appears Fridays. Reach him at 360-236-8267 or at dpostman@seattletimes.com