SAN FRANCISCO — Washington lawmakers will meet in an emergency session Monday to get an early start on tackling the state’s $2 billion budget gap, with an agenda that includes a half-cent sales tax increase.
Gov. Chris Gregoire called the session. She wants the Legislature to approve a referendum giving voters the option to raise the sales tax to 7% from 6.5%, which would raise $494 million a year.
The tax would expire in three years and would be mostly spent on education, with some leftover for health and human services and public safety.
Those programs would feel the brunt of Gregoire’s proposed $2 billion in spending cuts in her supplemental budget. She also proposed creating a $600 million reserve.
“No governor in modern times has had to weigh cuts of the magnitude I am proposing. But I have no choice,” Gregoire said in a statement.
She noted the state has had to reduce existing and projected spending by more than $10 billion over the last three years.
Lawmakers will also have another issue on their plates.
Treasurer James McIntire is pitching a rescue plan to the Legislature to prevent a $42 million default.
The treasurer said he hopes to prevent contagion from a default on bond anticipation notes issued by the Greater Wenatchee Events Center Public Facility District that are due Dec. 1.
Under the plan, the state would provide a 10-year loan to the district at an interest rate tied to The Bond Buyer’s 20-bond index plus one percentage point. Jurisdictions in the district could repay the loan with a sales tax increase of up to 0.2% approved by either Wenatchee voters or the City Council. This would also allow the district’s members to issue bonds at a lower interest rate to repay the loan.
The legislation would have to be pushed through the Legislature and signed by the governor in only three days during the emergency session.