Gregoire: Living large is no longer an option

OLYMPIA — The state's big spending days are over — at least for now, Gov. Christine Gregoire told lawmakers on Tuesday, urging them to sock away money for a possible recession.

Her annual State of the State Address was a marked turnaround from a year ago when she advocated a $4 billion increase in state spending and argued "the status quo in Washington is not good enough."

This year, worries about the economy — and the 2008 election, critics say — have the governor saying it's time to hunker down.

"Media across the state have called my budget frugal. It is. But just like families, we are making wise investments for the future and we are saving for less prosperous times," Gregoire said. "For too long, state government has spent in the good times, and then made painful cuts when our economy has slowed. We are getting off that roller coaster."

There were no big surprises in the address, which at times sounded like a campaign stump speech. Gregoire had already spilled most of her plans to reporters during the past couple of months.

She wants to save $1.2 billion of a projected $1.4 billion surplus in the state's two-year $33 billion budget adopted last year. She would spend the remainder on cost increases for existing services and relatively low-cost initiatives such as cracking down on sex offenders and offering counseling to homeowners hit by the mortgage crisis.

There also was no reference to the 2008 governor's race, although Gregoire faces what's likely to be a tough rematch against Republican Dino Rossi, who narrowly lost to Gregoire in 2004.

But the governor laid out what likely will be campaign themes once the session ends. She talked about her record since taking office in 2005 and the increased spending during her term on education, transportation and health care.

"In the past three years, we have tackled tough problems and we have made progress to improve the lives of Washingtonians, and we are not done," she said.

The economy has responded, Gregoire said. "The fact is, we have made the changes needed to dramatically turn our state's economy around and make it one of the strongest in our nation."

Democratic lawmakers agreed with Gregoire's rosy assessment.

"It was one of the few State of the State speeches where I felt the accomplishments were for real," said House Majority Leader Lynn Kessler, D-Hoquiam.

But Rossi, who gave his own "state of the state" speech via webcast on Monday night, sees things differently.

He accused Gregoire of squandering a huge budget surplus and setting the state up for a certain shortfall.

"We have a government today that has become more expensive and less effective. Despite a massive increase in spending, Christine Gregoire's administration has not made our education system better, has not improved transportation, and has not made our communities safer," Rossi said.

Sen. Janéa Holmquist, R-Moses Lake, agreed. "Unlike Gov. Gregoire, I don't believe our state government is on the right track and fear it has lost sight of what is truly important: you, your wallet and your rights," she said, giving a televised response on behalf of Republicans in the Legislature.

Republicans also said Gregoire is going too far in claiming credit for the state's strong economy. Most of the credit for that belongs to policies put in place before she was elected, they contend.

"I think she just happened to be in the right place at the right time," said Sen. Joe Zarelli, R-Ridgefield, Clark County.

Gregoire ended her speech by calling on lawmakers to "give a well-deserved rest to partisanship and politics."

But state Democratic Party Chairman Dwight Pelz, who attended Gregoire's speech, made it clear he doesn't think the governor's call for a partisan truce extends beyond the Capitol.

"2008 is going to be a year that we are going to run a tough campaign to re-elect a great governor," Pelz said. "The Democratic Party is geared up."