OLYMPIA -- Gov. Jay Inslee repeated calls for a tax on carbon pollution to secure "a birthright to a healthy Washington" but Republican leaders countered it would be bad for business.

In his annual "state of the state" address, Inslee urged legislators to spend more on education, the environment and what he termed "vital services" , including help for the homeless, health care, mental health facilities and public services. So much more that he's urging the Legislature pass some new taxes to cover some of those costs.

He'd place a tax on carbon pollution, and capital gains tax on some of the profits the top 1 percent of taxpayers receive.

"We can work toward a fairer tax system, and we should," Inslee said. The line drew a standing ovation from Democrats in the packed chamber, but most Republican members sat quietly.

Republican leaders said later the state's revenue from the current tax system is expected to bring in an extra $3 billion. Rep. Norma Smith, R-Clinton, insisted the state could balance its budget without new taxes, and should set aside money for education programs first.

A tax on carbon pollution might discourage new companies from locating in Washington, and force existing ones out, Sen. Ann Rivers, R-Vancouver, said. Instead, the state should encourage business to expand conservation measures, using a carrot instead of a stick.

"Business has found conservation is good business," Rivers said.

Republicans said they wouldn't fight Inslee on every front, and were likely to find areas of agreement on some issues such as forest health and toxic cleanup. Senate Majority Leader Mark Schoesler, R-Ritzville, said Inslee has even adopted their position on freezing tuition at the state's universities and colleges.

As he has in previous speeches, Inslee called for the Legislature to pass a package of major transportation projects that would need some sort of new tax to pay for them. For the last two years, the Democratic-controlled House has approved such a plan, but Republicans in the Senate have balked and the plans died.

This year he's again proposing a transportation package, one that he said transcends rivalries of "east versus west, urban versus rural or roads versus transit."

Republicans, however, repeated a complaint they've had for several years, that it doesn't do enough to reform the large transportation projects that have been plagued with problems, like the tunnelling operation for the Alaskan Way replacement in Seattle where the boring machine has been stuck for more than a year.

While some Puget Sound motorists are angry about longer commute times, House Republican Leader Dan Kristiansen of Snohomish said his constituents are telling him "you guys are blowing my money" on failed projects.

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