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Gov. Gregoire outlines revenue proposal

For Immediate Release: February 17, 2010

OLYMPIA � Gov. Chris Gregoire today outlined her proposal to raise $605 million in new revenue to support needed health, education and community programs across Washington state.

�While there are signs that our economy is stabilizing, we are far from a full recovery,� Gregoire said. �People are still losing their jobs, their health care, their homes. State services are still needed now more than ever before. This proposal maintains basic services while ensuring we don�t jeopardize our economic recovery.�

After presenting an all-cuts budget in December, Gregoire last month presented a list of programs and services she wants to restore through new revenue. This proposal, along with nearly $1 billion in cuts and expected federal revenue through Federal Medicaid Assistance Percentage (FMAP) will fund that list of programs � and leave an ending fund balance of $512 million.

�Until our economy is on a certain and upward path, we will need to be vigilant in managing the budget,� Gregoire said. �This ending fund balance will help cushion against the ups and downs our economy may take. Recovery will not happen overnight and it will continue to challenge us through the next biennium.�

Gregoire�s proposal includes a combination of closing tax loopholes, eliminating tax exemptions and increasing taxes on some discretionary products, including tobacco products, bottled water, carbonated beverages, candy and gum. Gregoire also proposes to increase the tax rate for hazardous substances to protect Washingtonians from the effects of harmful pollutants.

Gregoire considered several criteria while evaluating new revenue ideas, primarily whether it would jeopardize the state�s economic growth and recovery. Additionally, Gregoire considered whether each proposal addressed a long term budget solution, and tried to avoid tax increases on necessary purchases that would unfairly hurt the state�s low income population.

�I know the Legislature must balance its budget, which may represent different priorities, a different approach to revenue and a different ending fund balance,� Gregoire said. �I respect the process and offer my support and assistance.�