Gov. Gary Locke, with only a few weeks left in office, is expected to propose a tax increase of about $500 million tomorrow as a way to soften the blow of a projected $1.5 billion budget deficit...

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OLYMPIA — Gov. Gary Locke, with only a few weeks left in office, is expected to propose a tax increase of about $500 million tomorrow as a way to soften the blow of a projected $1.5 billion budget deficit.

It’s an unusual move for the governor, who opposed a major tax increase even when the state faced a much bigger gap in its budget in 2003. Lawmakers say Locke has discussed raising the money through “sin taxes,” such as beer, wine and tobacco.

Marty Brown, Locke’s budget director, wouldn’t discuss specifics but said taxes are on the table now because “the low-hanging fruit is gone.” For example, in 2003 legislators suspended Initiative 728, meant to reduce school class size.

“We’re getting down to priority services at this point,” Brown said. “After doing this four years, it’s hard to do without new money.”

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By law, Locke is required to present a balanced budget to the Legislature, even though he’s leaving office and a new governor will come in next month.

It’s not clear if lawmakers will pay much attention. They’re still wondering who the new governor will be: Republican Gov.-elect Dino Rossi or Democrat Christine Gregoire. A hand recount is expected to finish next week.

The reality is that the new governor will want to put together his or her own budget. Locke’s budget at best is a template to get started.

Rossi has said there’s no need to raise taxes to balance the budget.

“The last thing the people of Washington want is a tax increase,” Rossi spokeswoman Mary Lane said yesterday. “You don’t tax your way into economic prosperity.”

Gregoire, during the campaign, said this isn’t a good time to raise taxes, given the struggling economy. She declined comment on the tax proposal yesterday.

The idea of a tax increase gets mixed reviews from lawmakers.

Republican state Sen. Bill Finkbeiner, R-Kirkland, outgoing Senate majority leader, said his caucus opposes any tax increase.

“We think it’s a bad idea,” he said. “It’s going to be a tough budget to write, but it’s a doable one to write without new taxes.”

The November election, however, put Democrats in control of both the Senate and the House.

State Sen. Margarita Prentice, D-Renton, the incoming chairwoman of the Senate Ways and Means Committee, said she’s open to Locke’s proposal. She said he used the $500 million figure in a briefing to lawmakers earlier this month.

“I am not in a position to rule anything out. Everything will be on the table. I’m sure I’ll end up supporting things I probably really hate,” Prentice said. “Obviously there’s going to be some cuts in services and obviously there’s going to have to be some increased revenue. The answers are not going to be simple.”

State Rep. Helen Sommers, chairwoman of the House Appropriations Committee, also said she had heard the $500 million mentioned as a goal. Like Prentice, she doesn’t rule out a tax increase.

“It’s going to be harder than two years ago because we don’t have as many places to go,” she said. “I believe we need new revenue.”

The deficit outlined by Locke’s budget writers comes from a problem familiar to anyone struggling to balance a family budget: Washington’s income isn’t growing fast enough to cover all its projected expenses.

Big-ticket items include money to pay for Initiative 728, which would reduce school class size, and for the cost-of-living raises teachers won when voters approved Initiative 732. Both initiatives were suspended last year as a way to save money. Funding I-728 alone is expected to cost the state $237 million over the next two years.

Health-insurance costs for state workers are expected to add $370 million to the budget. Pension contributions will add $427 million.

Like many Democrats, House Majority Leader Lynn Kessler, D-Hoquiam, said she’s not ruling out tax increases, but noted “it’s going to be difficult to sell.”

“We’re the ones who are going to have to vote for it,” she said. “Our members aren’t closed, but they are very cautious.”

Andrew Garber: 360-943-9882 or agarber@seattletimes.com