General tax increases such as a hike in property taxes or talk of an income tax are off the table, Sen. Rodney Tom said Wednesday at AWB's annual Legislative Day in Olympia.
"Pretty much everything else is on the table, to be quite honest with you," said Tom, D-Bellevue, including a re-examination of tax incentives to make sure they're doing what they were designed to do.
His comments came during the first of four panel discussions planned throughout the day. Rep. Gary Alexander, R-Olympia, and Victor Moore, the state budget director, joined Tom on the panel.
None of the speakers offered much in the way of specifics, however, because they said lawmakers have not yet settled on a plan for closing the state's estimated $2.6 billion budget shortfall.
Tom compared the work of lawmakers to NBA players who don't begin playing in earnest until the fourth quarter.
The budget picture should become more clear next week when the latest revenue forecast data is released, Moore said.
Another variable is potential federal funding. When Gov. Chris Gregoire released her budget, the federal health care overhaul was moving forward and was expected to provide Washington state with funding, Moore said.
The federal health-care plan is now stalled, but Washington could still receive $435 million in Medicaid funding, he said. An additional $450 million in federal funding is possible.
Alexander criticized lawmakers for waiting on potential federal funding to solve the state's budget problems, referring to the "so-called train of bullion coming from the other Washington."
It's not clear when the train is coming, how much money will be on board, whether it will come at all and what conditions will come with whatever gold is on board, Alexander said.
Instead, state legislators need to make the hard decisions now to reduce the size of government, he said.
Some highlights:
- Tom questioned whether the state should be in the business of selling liquor. Privatizing liquor stores could help generate revenue, he said, though he admitted the idea is not "universally accepted" within the Democratic caucus.
- Alexander said dramatic rate increases in unemployment insurance taxes are killing businesses and preventing them from hiring workers.
- Tom praised the federal Race to the Top program, saying it stands to have a greater impact on the public education system than anything else in recent memory.
- In response to a question about bank failures, Moore said it's a "big risk" to the state and officials are aware of it. The commercial real estate market, which is part of the banking sector's troubles, will take longer to recover than residential real estate, he added.
- Alexander said he does not support the idea of a state bank as a solution to banking sector troubles.
- Lawmakers are looking at the 2010 supplemental budget as part of a three-year budget, not simply a supplemental budget, Tom said.
- Moore said he does not expect to breathe a sigh of relief when the legislative session concludes because he will quickly begin negotiating with public employee unions and almost immediately start work on a challenging two-year budget. "I don't have a great answer for the next biennium," Moore said. "I'm the state budget director and I don't see a clear path."
- Moore agreed with the others that Washington state government needs a "smaller footprint." The changes in the economy are fundamental, and the state does not expect a quick return to pre-recession levels of tax revenue. "We have to start re-defining how we deliver services," he said.
AWB Legislative Day continues this afternoon with panel discussions of labor and the workforce, health care and environmental issues.
Attorney General Rob McKenna is the luncheon speaker and will help award the 2010 Better Workplace Awards.
