OLYMPIA — Gov. Christine Gregoire said this morning she wants to raise $203 million in taxes to help balance the state budget.

Gregoire wants lawmakers to raise the cigarette tax by 20 cents a pack and proposes a partial restoration of the state estate tax. She calls it a "softer" estate tax than what the state Supreme Court recently invalidated because it would exempt family farms and tax only estates valued at more than $2 million.

The state could get by without a tax increase, Gregoire said in a statement, but added, "Getting by is not good enough."

"In government, there's a feeling that if we just hunker down and make do with the status quo, we can get by," she said. "Trouble is, the status quo kills you. You might think you're holding your own, but in fact you're backsliding."

The tobacco tax would continue to increase, Gregoire said, up to an additional 80 cents a pack.

Gregoire said the rest of the proposed budget shortfall should be made up through spending surplus funds in some state accounts and cuts in existing programs.

Gregoire expressed mixed feelings about the plan. She called it a "legacy budget" because of spending on education.

But she also conceded it was difficult to find programs to cut.

"There's no question, we had four years and $4 billion of cuts. So it's hard to find things to cut that don't cut areas that would cause us problems," she said.

That led to using fund transfers and other budget moves to balance the bottom line.

She said she wants to work with lawmakers this year to work toward a "structurally sound, sustainable budget."

"This is not it."

The proposed budget for the state's two-year 2005-2007 budget includes cutting $82 million from health and human service programs and $38 million from K-12 school programs.

The plan calls for saving $66 million through cutting middle management and lowering costs for supplies and equipment.

But the bulk of the savings comes from moving money around state accounts and other moves that would not mean any cuts in services. That includes: