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October 12, 2010 at 11:53 AM

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Gregoire says she'll vote for income tax

Posted by Andrew Garber

Gov. Chris Gregoire on Tuesday told reporters she supports I-1098, the income-tax initiative on the November ballot that targets high-wage earners.

"If I wasn't in the economic crisis of a lifetime, I might choose otherwise but I'm voting yes," she said at the end of a news conference dealing with her recent overseas trade mission. "It may not be the best vehicle, but I don't have another vehicle."

The governor and state lawmakers face a projected $4.5 billion budget shortfall next year. Gregoire said cuts to state services, including education are likely without additional revenue.

The state has estimated the tax would bring in more than $2 billion a year by 2013.

It's not clear, though, that I-1098 would bring in money in time for the next two-year budget. The measure, if approved, is expected to be challenged in court.

I-1098 would create a 5 percent tax rate on annual incomes exceeding $200,000 for individuals and $400,000 for couples, and a 9 percent tax rate on incomes that top $500,000 for individuals and $1 million for couples.

It also would cut the state portion of everybody's property taxes by 20 percent and newly exempt 118,000 businesses from the business-and-occupation tax on gross receipts by increasing the state credit to $4,800.

Gregoire has opposed an income tax in the past. In 2009, when Democrats in the state Senate were discussing an income tax on the wealthy, the governor issued a statement saying "as I have stated before, I do not support a state income tax. The new proposal will undoubtedly raise constitutional and legal challenges and probably wouldn't bring in new revenue in time to address the economic crisis we face."

On Tuesday, Gregoire said: "I'm asking the voters to consider it. What's the alternative? More cuts to education that we simply cannot afford."

Ballots go out this week, and must be postmarked by Election Day, Nov. 2.

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Jim Brunner
Covers politics.

Keith Ervin
Covers the Eastside.

Andrew Garber
Covers politics and state government from Olympia.

Emily Heffter
Covers local government.

Mike Lindblom
Covers transportation.

Kyung Song
Covers politics and regional issues from Washington, D.C.

Lynn Thompson
Covers Seattle City Hall.

Bob Young
Covers King County and urban affairs.