BY Joseph Turner
joe.turner@thenewstribune.com

Washington now faces an estimated $8 billion budget shortfall thanks to a steep dive in how much the state expects to collect in taxes over the next 28 months, and that circumstance has legislative leaders openly talking about asking voters to raise taxes to help the state get through a lingering recession.

Arun Raha, the state’s chief economist, told members of the Economic Review and Revenue Forecast Council on Thursday that he expects state tax collection through mid-2011 to be $2.3 billion lower that what he forecast as recently as three months ago.

That would have produced an $8.3 billion gap between tax collections and how much money the state would spend to maintain all state programs at current levels, pay for growing school, prison and Medicaid caseloads, give pay raises to state workers and teachers and boost spending on the programs for the poor.

However, the Legislature and Gov. Chris Gregoire trimmed $300 million from that amount earlier this week by cutting spending for the final six months of the current two-year budget cycle.

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I had a quick interview with Sen. Mary Margaret Haugen, chairwoman of the Senate Tranportation Committee at noon-ish. It lasted the 6 or 7 minutes it took to ride the elevator down from her office and walk across campus to the Legislative Building.

Anway, we chatted about carpool lanes and federal stimulus and the state transportation budgets. Here's the story that will appear in Friday's paper.

BY Joseph Turner
joe.turner@thenewstribune.com

Some of the carpool-lane construction projects in Tacoma that were delayed to death in Gov. Chris Gregoire’s proposed 2009-11 transportation budget might be restored by the state Senate.

The promise of an estimated $342 million in federal stimulus money for Washington highway, bridge, ferry and rail projects has improved prospects that some of the carpool projects on Interstate 5 through Tacoma -- between the Tacoma Mall and the King County line -- might be in line for funding.

“It’s on the list for consideration,” is all that state Sen. Mary Margaret Haugen, D-Camano Island, chairwoman of the Senate Transportation Committee, would say Thursday about the use of federal stimulus funds.

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Brad Shannon at our sister newspaper, The Olympian, has this item that is particularly germane these days.

The Washington Education Association (aka W.E.A.) is part of the unions and other alphabet soup working out in the burbs to see whether voters would buy into a tax increase this year, and these ads appear to be part of the softening up process. Schools are, after all, warmer and fuzzier that pay raises for state agency workers.

(I should note, it's not at all uncommon for the WEA to be running ads during any legislative session.)

Shannon's item is here.

I'll try to get more on this and other topics after House Speaker Frank Chopp meets with reporters at 2 p.m. today and Senate Majority Leader Lisa Brown meets with us at 3:30 p.m. And, of course, at 4:30 is the state revenue forecast.

The name "Nofziger" (from the teacher radio ads) rings a bell. Hmmm. Where have I heard that before?

Pierce County attorneys will be in court next week to defend the County Council’s decision to appoint Jan Shabro as county auditor.

The hearing was scheduled after Pierce County Democratic Party Chairman Nathe Lawver filed a second lawsuit seeking to overturn Shabro’s appointment.

Lawver filed his original lawsuit in January. But that lawsuit seemed to be going nowhere fast and isn’t scheduled for trial until July.

Now Lawver has filed a second lawsuit last week. The second lawsuit is on a faster track. Superior Court Judge Beverly Grant already has ordered Pierce County officials to show why she should not nullify Shabro’s appointment as auditor. That’s what’s on the agenda for a hearing tentatively scheduled for Feb. 27.

The county auditor’s job became vacant when Democrat Pat McCarthy resigned to become county executive at the end of December. In January the County Council appointed Shabro, a Republican, to replace McCarthy.

The lawsuit claims the council broke the law in several ways:

• It claims the council violated the county charter by refusing to choose an auditor from among three nominees submitted by the local Democratic Party. The charter requires the council to fill vacancies in partisan offices by selecting from among three nominees submitted by the party of the person vacating the office.

Lawver claims the council must follow those provisions even though voters made the auditor’s office a nonpartisan position in 2007. Lawver claims that because McCarthy was twice elected as a Democrat the office remains partisan for the purposes of appointing her replacement.

• The lawsuit claims the council violated the county charter in December by approving an “emergency” resolution outlining the council’s own auditor replacement process. It claims no emergency existed. And it contends the county charter does not authorize emergency resolutions.

• Finally, the lawsuit claims the council violated the state Open Public Meetings Act during the auditor replacement process. It claims the council did not give adequate public notice of the resolution adopting the council’s appointment process.

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I'm told that the House and Senate Transportation Committees are putting together a longer list of project that will be built over the next two years, thanks to the economic stimulus package approved by Congress and President Obama.

That may come out as early as next week, but it won't necessarily be the final say. Gov. Chris Gregoire announced her "Washington Jobs Now" program last month, and it was basically a recast version of the transportation and capital budgets that she proposed in mid-December.

Federal money allows for state highway, bridge, ferry and other projects to be built. But I don't expect to see the final 2009-11 transportation budget until April.

The meetings between Sen. Mary Margaret Haugen, Rep. Judy Clibborn (transportation chairwomen) and Transportation Secretary Paula Hammond and her No. 2 David Dye earlier this week probably were to make sure everyone's pretty much on the same page. That is, general agreement on what projects should be added to the list.

UPDATE: Their meetings were to talk about the supplemental state transporation budget for 2007-09, Haugen said. Part of the estimated $342 million that the state is getting for its own transportation projects as part of the federal stimulus package has to go to bid by June 30. So, the state is going to try to add projects to the list.

Some of it will be done in 09-11.

Twenty-two of them signed a letter to Senate Majority Leader Lisa Brown and many of them will be meeting with Brown today (about an hour before Brown meets the press.)

Of course, these economists will be preaching to the choir. Brown, an economist, said before the 2009 Legislature session that tax increases have a "de-stimulating" effect on the economy. But that doesn't mean she thinks we should not raise taxes as part of the remedy for what is expected to be an $8 billion budget problem. Far from it.

The main point of the economists is that cutting state spending on services too much is way worse for the economy (not to mention people) than raising taxes.

And Brown has said from the start that a tax increase is one of the tools available to lawmakers, but it's not where they will start. She and other legislative leaders said a bit more in a story in the Times.

Here is Andrew Garber's story in today's Seattle Times.

And here, thanks to the Washington State Budget and Policy Center, is the letter the tax-favoring economists sent to Gov. Chris Gregoire, Brown and House Speaker Frank Chopp.

Your answer might tell a lot about you – such as your age, education, politics and region.

That's what the Pew Research Center discovered when its pollsters asked this question: Would you rather live in a neighborhood with more Starbucks or more McDonalds?

McDonalds wins overall but broken down by demographic group, liberals prefer coffee while conservatives prefer fast food. Men like burgers and women are closely divided. The younger you are the more likely you are to prefer more Starbucks.

Here is the graphic on the poll question.

Sen. Rosa Franklin, D-Tacoma, introduces a state income tax bill almost every legislative session. This one was no exception.

But largely because Initiative 960 requires a 10-year projection for any bill that proposes to raises taxes or fees, her bill got more scrutiny this time. I wrote about it earlier.

Below is an opinion piece that Franklin sent to The News Tribune's OP-ED page. There's no limitation on space here in the blogosphere, so I'm "printing" it.

Let’s talk about taxes—without the scare tactics

By Sen. Rosa Franklin

Washington’s tax structure was developed more than a century ago for an economy based on agriculture, manufacturing and local commerce. It was appropriate then and for many decades, but over time it has become less and less appropriate—and adequate—for the needs of our modern economy.

The sales tax, which accounts for more than half of our state revenues, is a regressive tax; those who earn the lowest wages pay the highest taxes. For example, those who earn less than $20,000 per year lose nearly 16 percent of their income to state and local taxes; those earning between $40,000 and $130,000 pay 6 to 8 percent in taxes; those who earn more than $150,000 pay only 4 percent in taxes.

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Next week in Seattle, the state Department of Transportation and others are holding a couple open houses to let folks see what Gov. Chris Gregoire, Seattle Mayor Greg Nickels and King County Executive Ron Sims have in mind for replacing the Alaskan Way Viaduct on Seattle's waterfront.

Wish I could go, but there's this pesky thing call the Legislature that's in session in Oympia, 60 miles away from Seattle. Guess I'll just have to look at the pictures on line at WSDOT's Web pages.

The trio has hatched a $4.24 billion plan to replace the viaduct with a 1.7-mile deep bore tunnel under Seattle. The state's share would be $2.82 billion, plus any cost overruns on the tunnel. That's the recommendation.

The Legislature will decide whether to go along with it.

Take the first look at the bored tunnel hybrid plan to replace the Alaskan Way Viaduct; open houses on Feb. 23 and 24

SEATTLE – WSDOT, King County, and the City of Seattle will share information about the plan to replace the Alaskan Way Viaduct and Seawall at two open houses next week.

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