[Update: Comments from WSRP Chairman Kirby Wilbur added at bottom.]

On Thursday’s announcement by Gov. Christine Gregoire of a late November special legislative session to resolve the state’s $1.5 billion budget woes, Republicans and Democrats in the Legislature traded opening statements in the press, and the candidates for governor added their own comments.

Congressman and Democratic candidate for governor Jay Inslee came out with a quick statement after the announcement, a sharp contrast to his notable silence over the past week as details of the state’s worsening revenue picture came out. Today, Inslee suggested that the Legislature should steer clear of making further cuts to education and took aim at corporate tax breaks including exemptions given to banks lending to first-time home buyers.

“There are still options for the legislature to pursue including finding savings by closing ineffective corporate tax loopholes, such as the exemption for out-of-state banks,” said Inslee.

Ironically, in coming out against the breaks, Inslee put himself at odds with Gregoire. Asked by a reporter at Thursday’s press conference to address those who support closing loopholes, Gregoire’s answer seemed to take dead aim at the congressman’s loophole-cinching solution.

“For the alleged tax loophole as has been described… there is always some advocate, there’s always some consequence and often times it’s a job that will be lost,” Gregoire said. “That may be a big answer in Washington, D.C., but we don’t do what they do.” (Video below.)

On the subject of whether taxes should be the preferred area of discussion, Inslee consulted the progressive thesaurus when advocating for focusing on taxes.

“I hope the legislature seriously addresses the questions about how we put ourselves on a long-term path to economic recovery and how to preserve priorities like education that create economic opportunity, and make responsible investments in our families and future,” Inslee said.

But selling the idea that taxes are investments requires the additional logical step of connecting government spending with a benefit of some sort, a case indirectly made more difficult because of widely-reported failures in the type of federal government investment Inslee supports. Recent revelations of billion dollar losses in failed loans to solar panel manufacturer Solyndra and Seattle’s failure to convert $20 million in federal grant funds into even 20 new jobs may spoil, in the minds of voters, the elegance of Inslee’s equation.

In contrast, Republican gubernatorial candidate Rob McKenna’s comment stuck to safer ground, praising Gregoire’s decision to call the session before January and suggesting that a diplomatic process is what Washington needs.

“No one can be pleased with the situation that our state budget is in, but I do congratulate the Governor for recognizing the need for action this year, and scheduling a special legislative session to start November 28,” McKenna said. “I look forward, as should all Washingtonians, to a speedy and bi-partisan resolution to the current challenge after legislative leaders spend the next two months negotiating with the Governor.”

The dream of a peaceful deliberation and compromise is probably dead on arrival, however, since legislators have been jockeying for the rhetorical high ground since before the state issued a newer, darker revenue forecast last week.

Even before last week’s disappointing forecast was released, State Sen. Joe Zarelli, Senate Republican leader on budget issues, had called loudly for the Governor to assemble a nine-member “Super Legislature” – not unlike the bipartisan Super Congress in the nation’s capital – to recommend budget solutions. Zarelli and State Senate Republican Leader Mike Hewitt made it clear in their joint statement they will seek a dialogue on that model and talks should begin with assessing spending priorities, not raising taxes.

“[The focus] needs to remain on figuring out which state services are priorities and how to provide those as cost-effectively as possible, because that’s how we will move our budget toward long-term sustainability,” said Zarelli and Hewitt. “We know from recent history that as soon as discussions begin about increasing revenue, all talk of reforms seems to evaporate.”

On the other side of the aisle, State Senate Majority Leader Lisa Brown (D) and State Sen. Ed Murray issued a joint statement with a blatant nod to the gun Democrats will be laying on the negotiating table.

“As legislators, we have many tools for balancing our budget,” said Brown and Murray. “Including giving the voters the option of approving new revenue to pay for the services they want.”

The option alluded to is sending a referendum to voters for tax increases, an alternative that key Democrats have floated for several weeks, despite clear signals from State Sen. Joe Zarelli (R) that a referendum should not count on support from Senate Republicans.

A tax referendum could prove to be a double-edged sword for Democrats in 2012 if voters perceive the move as a way to sidestep legislative duties by outsourcing tough political choices.

“The voters of Washington in November 2010 soundly rejected tax increases and new taxes. With a stagnant economy, there is no reason to think they have changed their minds,” Washington State Republican Party Chairman Kirby Wilbur told NW Daily Marker by email. “If the Democrats put an increase in taxes on the November 2012 ballot, I will have to reconsider my beliefs about Santa Claus. That move would guarantee a Republican statewide victory, a new governor and majorities in both houses of the Legislature.”


[photo credit: djfrantic]