The truth behind claims by Rossi, Gregoire

OLYMPIA — When Gov. Christine Gregoire and Republican Dino Rossi debate again Thursday in Spokane, there's a good chance they'll say something that's not quite true.

Context and nuance tend to fall away in the sound bites and shorthand that both candidates use when they face off.

Gregoire, for instance, has repeatedly said, "when I came into office I inherited my opponent's $2.2 billion deficit." And Rossi, talking about the same budget, has said he balanced it "without raising taxes."

Neither of those statements is accurate.

Here are some of the candidates' most common claims and the truth behind them.

The state budget

Gregoire's claim: Rossi wrote a budget in 2003 that left Gregoire with a looming $2.2 billion deficit when she came into office in January 2005.

The facts: Then-Gov. Gary Locke, a Democrat, was a chief architect of the budget. Rossi, chairman of the Senate Ways and Means Committee at the time, also played an important role in making changes and getting it passed.

The projected deficit in December 2003 — a month after Rossi announced he was running for governor the first time — was about $1 billion for the 2005-07 budget.

Several things happened after December 2003 to increase the shortfall.

In 2004, after Rossi had left office to run for governor, the Legislature increased spending. Also that year, the cost to provide certain services, such as health care for the poor, rose.

Then, in 2005, after Gregoire was elected, two state Supreme Court decisions — including a ruling that overturned the state estate tax — dug the hole even deeper.

Add it all up and you get to the $2.2 billion deficit Gregoire blames on Rossi. However, most of it happened after he left office.

Rossi's claim: As chairman of the Senate Ways and Means Committee, he wrote a balanced budget in 2003 that closed a large shortfall and did not increase taxes.

The facts: The 2003-05 budget raised about $14 million from a 42 cent-per-liter surcharge on liquor, according to legislative analysts. It also charged nursing homes a tax of $6.50 per bed, per day.

Most of the debate regarding this issue has been over the so-called bed tax.

Nursing homes with large numbers of residents receiving Medicaid asked the Legislature to levy the tax as a way to get more matching federal dollars and boost their overall funding.

Here's how it worked: The state charged the $6.50 tax but sent most of the money it generated back to nursing homes to offset the cost of the tax.

In the end, the state ended up keeping $24 million out of the deal and nursing homes with Medicaid clients ended up with an additional $34 million in state and federal money, according to the state Department of Social and Heath Services.

However, nursing homes that receive little to no public funding — roughly a third of all beds in the state — had to pay the tax, too, but didn't get enough back to cover the cost. The tax was phased out in 2007.

So the budget did raise taxes, although the bed tax largely affected those who had asked for it.

Gregoire's claim: As chairman of the Senate Ways and Means Committee, Rossi cut $1 billion out of education in the 2003-05 budget.

The facts: Again, both Locke and Rossi created the budget.

Documents provided by the governor's budget office indicate the 2003-05 budget made real cuts in education spending of about $214 million, including a $131 million cut in higher education.

The rest of the money the governor was referring to, according to her budget office, was in reductions in proposed increases in spending. In other words, the state did not reduce funding; the increase was just smaller than planned.

Overall, education spending actually increased $300 million.

Rossi's claim: Gregoire has increased state spending by $8 billion since she was elected, and that created a $3.2 billion budget deficit.

The facts: The state does not have a deficit right now. It has a balanced budget and about $529 million in reserves.

However, the economy is in rough shape and tax-revenue growth is slowing more than expected.

As a result, the state Senate Ways and Means Committee projects the state will fall about $3.2 billion short of what's needed to keep state services at current levels in the next two-year budget, which will go into effect July 1.

That's the gap Rossi is talking about. The shortfall could get even bigger if the economy continues to deteriorate, or it could get smaller if things improve.

Stem-cell research

Rossi's claim: Gregoire advocated a stem-cell-research center during her 2004 run for governor but didn't follow through on her promise.

The facts: Gregoire did talk about creating a Washington Institute of Stem Cell Research. Her campaign Web site at the time said she wanted to create a Life Sciences Discovery Fund, which would help start the stem-cell research center.

But once Gregoire took office, the idea fell off the agenda; it's not clear why. Legislators and others involved in creating the Discovery Fund said there wasn't a strong push for the center.

The governor's office said the idea was dropped because of opposition, adding that Gregoire "was told she would not get the buy-in from the Legislature for such a project." Her office would not say who warned the governor.

Gregoire and the Legislature ended up creating a 10-year, $350 million Life Sciences Discovery Fund that was open to funding stem-cell research but was not limited to that. To date, the fund has not awarded any grants for stem-cell research.

Gregoire's claim: Rossi opposes embryonic stem-cell research. Gregoire also ran a television ad that implied Rossi opposed all stem-cell research.

The facts: Rossi does oppose embryonic stem-cell research. However, he supports research using adult stem cells.

Transportation

Rossi's claim: His proposed transportation plan would provide $15 billion for highway projects across the state, in part by using taxes now going to the state general fund. Rossi has said his funding plan would only "take a narrow sliver of the general fund, 40 percent of the sales tax on new and used vehicles."

The facts: The state Department of Revenue projects that Rossi's proposal would take about $900 million from the general fund in 2010 and 2011 alone. The current two-year general-fund budget is $33.6 billion. Rossi's proposal, then, would amount to about 2.7 percent of the current general fund (keep in mind that the general fund is likely to change with the next budget cycle).

Gregoire's claim: Rossi's transportation plan would cut almost $1 billion out of education. "It's kids' education," the governor said in one debate. "For every single class across the state of Washington, kindergarten through fourth grade, they are going to have five more students in that classroom."

The facts: Rossi's proposal would take about $900 million from the general fund in the next two-year budget. But there is no way to know how much of that would come from education.

Roughly half the general fund goes to public schools and higher education. The rest funds a variety of programs that include health care, the state prison system and debt payments.

The Legislature would have to cut funding or raise taxes to fill the gap, but there's no law that says the whole $900 million would have to come out of public-school funding. And there is no reason to believe the Democrat-controlled Legislature would pack more children into classrooms in order to pay for transportation projects.

Andrew Garber: agarber@seattletimes.com