Note to Guv: Tax Hikes Will Still Hurt the Economy

Meeting with statehouse reporters, Gov. Gregoire appeared to open the door to tax hikes, softening the no-new-taxes stance she wisely took last year. From Andrew Garber's Seattle Times story:

"I didn't want revenue last year because I couldn't figure out how you could do a revenue package that wouldn't hurt the economy. I'm still stuck in that rut but I've told leadership to come make your case," Gregoire said.

"I've told them come on in and convince me that's the right thing to do and that people will support it. At some point the people, I assume, don't want us to take any more cuts. I'm already hearing about 'why did you cut education?' Well there aren't any options."

Garber points out:

Her tone this morning was different from last week when she addressed business leaders at the Association of Washington Business policy summit. At the time Gregoire wouldn't rule out a tax increase but told the gathering, "Tell me a tax that you're going to increase that will give you $1 billion that doesn't hurt business, hurt individuals, hurt our recovery."

In The News Tribune, Peter Callaghan reports on the governor's thinking.

Unlike last session when Gregoire said she thought any tax hikes would lengthen and worsen the economic recession, the Democratic governor said that might not be the case now. That's because state economist Arun Raha said the state – and nation – are pulling out of the recession.

The folks at the Policy Summit would have been quick to point out to her that a fragile recovery can easily topple under new taxes. And, of course, most businesses in the state are already looking at tax hikes in the form of higher workers' comp premiums. These things add up.

More in this Brad Shannon story in the Olympian.