PRESS RELEASE

March 21, 2005

Gregoire plays budget shell games to avoid vote of the people

OLYMPIA—Today Governor Christine Gregoire released a self-proclaimed "unsustainable budget." Despite saying she "produced a no-new taxes budget," Gregoire requests tax increases of $203 million (cigarette and partial reinstatement of the estate tax previously thrown out by the state Supreme Court). Not mentioned at her press conference are her plans to increase spending for the current budget by $219 million. This $219 million 2005 spending increase combined with her 2005-07 budget request means Gregoire hopes to increase state spending by $2.6 billion or more than three times the rate of inflation.

To reach her record spending level of $25.8 billion, however, the governor raises the I-601 voter-approved spending limit by $810 million. She does this by playing budget shell games with her 2005 supplemental budget request and by shifting $244 million from dedicated accounts to the general fund for the 2005-07 budget. By artificially raising the I-601 spending limit, the governor is denying the people their right under the law to approve any taxes and expenditures in excess of the I-601 spending limit.

"The governor said 'we must change the culture of state government,' but her budget is a return to the tax-and-spend habits of the early 1990s," said Bob Williams, president of the Evergreen Freedom Foundation. "This budget clearly shows that the governor has abandoned former Governor Locke's priority of government (POG) model in order to return to business as usual."

Gregoire's budget would leave an ending fund balance of $203 million (the exact size of her tax increases). This amounts to a budget reserve of less than one percent to deal with any unforeseen emergencies, such as another earthquake or incident at Mt. St. Helens.

The governor's $203 million in tax increases are earmarked to fund Initiatives 728 and 732. Ironically, these measures were approved by the voters in 2000 under the incorrect statements of proponents who indicated that these measures would not require a tax increase or harm the state's budget. Last year voters defeated I-884 by a margin of 2-1 when asked to raise taxes to fund the provisions of 728 and 732.

Contact: Jason Mercier | Budget Research Analyst | 360.956.3482

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org