Gregoire calls for tax hikes

A gas tax on distributors is included, and the governor says "I expect them to do this without passing this on to consumers."

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OLYMPIA -- Gov. Chris Gregoire proposed higher taxes on gas, soda, candy and gum Tuesday in order to avoid more government cuts and to help fund education in response to a court order.

In her final budget plan, Gregoire said a budget without new revenues would force the closure of state parks, eliminate food assistance programs and cause additional cuts in education.

The new wholesale tax on gasoline and diesel fuel -- paid by fuel distributors but likely passed on to drivers -- would eventually rise to 4.62 percent. The governor also wants to extend taxes on beer and business taxes paid by doctors, lawyers, accountants and others.

"We need revenue if we're going to meet our constitutional and moral responsibility to fund education," Gregoire said. The total revenue from the new tax and tax extensions would be about $1 billion for the cycle that starts in July.

Gregoire noted that the country's top oil companies have made billions of dollars in profits this year, "so I expect them to do this without passing this on to consumers."

She said she saw no other way to find the large amount of money needed to properly invest in the education system.

Gregoire said the candy and soda tax was a way to pay an award issued by an arbitrator in October to give pay raises to the state's home-care workers.

"Do I think these people need and deserve raises? Absolutely," she said. "I just can't do it at this point. So I've tried to find a revenue source that had a direct nexus."

Rep. Ross Hunter, D-Medina and chairman of the House Appropriations Committee, said Gregoire's budget proposal "exposes the basic structural problems that will make it difficult to build an operating budget that meets the needs of Washington's citizens and business community without changing the revenue picture."

But House Republican's point person on the budget, Rep. Gary Alexander of Olympia, said that the plan is likely "dead on arrival."

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