House Dems say they may put tax increase on ballot

OLYMPIA — With another dismal state revenue forecast expected today, House Democratic leaders now say they'll likely propose sending voters a tax package this year to help deal with a staggering shortfall in the state budget.

"I'm assuming there will probably be something that goes on the ballot," said House Ways and Means Committee Chairwoman Kelli Linville, D-Bellingham. House Majority Leader Lynn Kessler agreed.

Senate Majority Leader Lisa Brown, D-Spokane, said Wednesday she expects to bring ballot-measure ideas to her caucus for consideration.

Lawmakers have said for weeks that a proposal to create a new tax, increase an existing tax or eliminate certain tax breaks was possible. But this is the first indication they've gotten serious about developing a tax measure for the ballot.

No details were available about what a ballot measure might look like, except that it likely would be targeted to pay for a specific state service, such as health-care coverage for low-income people. It's also unclear when it might be on the ballot.

Democrats said the continued deterioration of the economy has them worried about balancing the budget through cuts alone. Democrats control both the state House and Senate, and the governor's mansion.

State tax collections keep dropping, and many lawmakers expect the new revenue forecast today to project a shortfall of at least $8 billion. The last revenue forecast issued in November pegged the shortfall at nearly $6 billion.

The shortfall is the difference between how much tax revenue the state expects to collect over the next two years compared to the amount of money needed to maintain state services at current levels and cover expenses such as pay increases for state workers.

Congress recently approved a stimulus package that's expected to send the state several billion dollars to help build highways and pay for Medicaid and other basic services.

Even so "we're starting to get the impression that even with the federal stimulus, the budget shortfall will be much greater than what the governor was facing when she wrote her budget," Brown said.

Gov. Chris Gregoire proposed a $33.5 billion two-year budget in December. At the time, the governor proposed more than $3 billion in cuts to help close the gap, including reducing health-care coverage for the poor and suspending pay increases for teachers and state workers.

Gregoire has opposed tax increases, but Democratic lawmakers said that even deeper budget cuts could cause unacceptable harm to residents and the economy.

"We're concerned about the fact that cutting state services that deeply could not only compromise the safety net at a time when people need it the most, but also exacerbate the job-loss problem because so many jobs are tied to providing those services and programs," Brown said.

Linville agreed. "The standard for me about something going on the ballot is we've attempted to do this through cuts. But some of the cuts that are being recommended are the kinds of cuts that irreparably damage our service delivery or individuals," she said. "If that's what we're left with, I think in good conscience I couldn't say we shouldn't go out to the voters."

If the Legislature does ask voters to increase taxes, the proposal would go directly to the ballot without a signature from the governor.

Republicans in the House and Senate have been saying for months that Democrats would end up proposing a tax increase. Senate Republican Leader Mike Hewitt, R-Walla Walla, said his caucus would oppose any effort to put a measure on the ballot.

Hewitt contends the state would not be in such deep trouble if Democrats had not increased state spending by more than 30 percent in the past four years. The current mess, he said, "is self-inflicted."

Brown would not discuss what kinds of taxes could go on the ballot, but said "people are looking at a collection of things that could be considered green. It could be anything from bottled water, because of the negative effects of bottles, to things in the dirty-energy sector of the economy."

Kessler said one possibility would be for the Legislature to ask voters to increase taxes to pay for subsidized medical coverage to lower-income families. "Maybe we put the Basic Health Plan out," she said. "And we say ... do you want to help support people who are working but have no access to health insurance?"

Anything put on the ballot should have public support, Linville said, "but it has to be something we're willing to live without if the ballot measure doesn't pass."

Andrew Garber: 360-236-8268 or agarber@seattletimes.com