APNewsBreak: Gregoire pushes immediate stimulus

Gov. Chris Gregoire, diving into her second term after a convincing election victory, is pushing a $300 million economic relief package aimed at helping families who are struggling to make ends meet.

Gregoire said she's also working with legislative leaders on a second round of emergency economic stimulus projects for Washington, which she wants to have passed immediately after lawmakers convene their new session in January. A major focus would be on construction jobs, possibly including expansion of community colleges.

Washington, along with the rest of the nation, is mired in an economic downturn that has cut jobs, hurt home values and crimped credit markets. State government is feeling the pinch of reduced tax revenue, and Gregoire is working on plans to bridge a projected $3.2 billion two-year budget deficit.

In an interview Monday with The Associated Press, Gregoire said she's taking immediate steps to free up millions in federal dollars that would subsidize energy costs, boost the salmon industry and spur the sluggish construction and housing markets.

The immediate stimulus package is made up of:

- More than $200 million in tax-exempt bonds for housing programs. The money can used for rental housing for poor families, assistance for first-time home buyers, and refinancing of mortgages at risk of default.

- About $85 million to help low-income Washingtonians pay heating and energy bills and make weatherization improvements to their homes. Since the money is funneled through utility companies, Gregoire hopes it also will create jobs.

- Another $13 million in aid for the salmon fishing fleet, meant to help those hurt by the sudden collapse of the Pacific Coast salmon industry. Gregoire said she's pushing federal officials to release that money faster.

The governor, sounding hoarse from a long and bruising re-election campaign, said the three-pronged approach represents "what we have in our tool chest right now - a stimulus package for us."

Congressional Democrats are hoping to pass a national stimulus package of about $100 billion in a lame-duck session later this month. On Monday, Gregoire submitted her wish list for that package, asking for spending on public works projects, assistance for homeowners hit by the national mortgage crisis, and more money for Medicaid, unemployment benefits and food stamps.

Gregoire also told the AP she's convening a special board of economic advisers early next month, drawing on top minds from academia and business to find ways the state can "stir our own economy."

Gregoire's staff is preparing an austere, no-new-taxes budget proposal for the upcoming Legislature, which will have to solve a projected deficit of about $3.2 billion. State economic forecasters meet next week to report on recent trends, and their verdict could make the deficit even larger.

Gregoire, describing herself as an optimist, said she's looking at the budget gap and faltering economy as an opportunity to fundamentally rethink the role of state government in Washington's economic health.

Without going into specifics, Gregoire said she hopes to identify government functions and programs that might be better handled in the private sector or the nonprofit arena.

"This should not be simply a budget-cutting exercise. We should be thinking about, how do we grow our economy, how do we create jobs, and what reforms we can put in place," Gregoire said. "Government is really going to have to get back to the absolute, essential basics."

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On the Net:

Governor: http://www.governor.wa.gov