In Friday morning's paper:

Before unveiling her budget plan Thursday, Gov. Chris Gregoire glanced around the crowded room.

“Before we begin,” she said, “I'd like to ask all of you to remove your shoes and take them outside. Particularly boots.”

That was the first and last joke of the somber 45-minute presentation, as Gregoire laid out a no-new-taxes proposal for deep state budget cuts to close an unprecedented $5.7 billion budget shortfall over the next two years.

“I hate it,” Gregoire said of her budget plan. “Nothing went untouched.”

Among the proposed cuts:

-halting nearly $700 million in planned cost-of-living raises for state workers and teachers for two years,

-cutting the Basic Health Plan, a state health insurance program for the working poor, by 42 percent,

-laying off more than 2,400 state workers,

-at least a 12 percent across-the-board budget cut at the state's four-year colleges,

-a 6 percent cut for community colleges,

-cutting community mental health and chemical dependency services by $53 million,

-doing away with health care and small monthly checks for more than 20,000 people deemed unemployable, often due to mental health problems. At least 2,000 of those people are in Spokane.

-and cutting money for new affordable housing in half.

The depth of the cuts stunned social service advocates, labor leaders and others.

“Some of these programs really are the most extreme form of safety net,” said Nick Federici, a lobbyist for human services groups. “To us, this really is the nightmare before Christmas.”

Gregoire's plan, however, is not the final word. It's more of a blueprint for lawmakers, who will spend the next several months hashing out their own plan.

“The governor's budget is kind of the first foray into the process,” said Jason Mercier, with the conservative Washington Policy Center. “The Legislature is the one that determines what the budget actually looks like.”

The state is still expected to collect more money over the next two years than in the previous two. Revenues are expected to grow 4 percent. The budget “gap” is between those revenues and the cost of maintaining current state services and programs while accounting for increased costs, population and so forth. After several years of spending that outpaced revenues, paring back requires some dramatic cuts.

The governor is sticking by her campaign pledge to not raise taxes, pledging to “squeeze every ounce of value out of every taxpayer's dollar” without asking for more. The state must live within its means, she said, and taxing people more won't help.

“If I got out there and put on a new sales tax, do you actually think I'm going to spur people to buy more? I don't think so,” she said. If lawmakers think voters will support a tax increase, she said, they're free to ask for one.

Still, Gregoire acknowledged “the pain in the numbers” in her proposal -- the state workers who will lose their jobs, the people who will no longer get state services.

“I believe we have done the best we could with as much compassion as we could muster,” she said. And the challenge to people who don't want something cut, she said, is to offer an alternative.

A few lawmakers, including local state Rep. Alex Wood, D-Spokane, say it's time to consider a tax increase to offset the worst of the cuts. For decades, that's how state lawmakers have dealt with recessions.

“I think it should at least be part of the discussion,” Wood said recently.

Senate Majority Leader Lisa Brown, also D-Spokane, has refused to rule out tax increases, and says the depth of the cuts makes it a good time to revisit some of the hundreds of tax breaks that lawmakers have approved in recent decades.

Brown is particularly worried about the health cuts and the General Assistance to the Unemployable program, which provides health care and monthly checks of up to $339 to people who cannot work. Often, Brown said, that's a lifeline to stave off homelessness.

Mary Lindquist, president of the Washington Education Association, said that the teacher's union knows that times are tough. But schools desperately need more money, she said, and teachers deserve cost-of-living increases.

“Just because you take a no-tax pledge, I'm sorry, we're in the worst recession since the Great Depression,” said Greg Devereaux, executive director of the Washington Federation of State Employees. “Everything should be on the table.”

And Gregoire's budget plan may actually make the situation look rosier than it really is, Brown said. The governor's plan assumes that the state will get about $1 billion from the federal government, she said.

“Do we really want to write a budget assuming money we don't yet have?” she asked.

Gregoire defended the move, saying the expected $1 billion is based on her conversations with President-Elect Obama.

“In fact, I think we've low-balled it, to be honest with you,” she said.

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