By STEVE BROWN

Capital Press

OLYMPIA -- A $368 million wholesale excise tax on gasoline and diesel fuel is among the proposals in Gov. Chris Gregoire's last state budget.

John Stuhlmiller, Washington State Farm Bureau's director of government relations, said that's a bad idea.

"If you add any price to fuel, that's not a good thing in this economy," he said.

Holli Johnson, legislative liaison with the Washington State Grange, said the added cost will surely be passed along to the consumer.

"I can't see that being good for the farming community," she said.

Another proposal, repealing a fuel use tax exemption provided for fuel produced and used internally by extractors and manufacturers, will not have a direct impact on agricultural producers. Repealing the exemption would generate $63 million in additional state revenue and $23 million in additional local revenue during 2013-15.

The Legislature and incoming Gov. Jay Inslee, a Democrat, will face a $900 million budget shortfall for the 2013-15 biennium, according to estimates by the Washington State Economic and Revenue Forecast Council.

That figure does not take into account several large obligations nor that the state will need to spend as much as $1 billion on basic education in the next biennium to begin complying with a state Supreme Court decision.

Gregoire acknowledged that her proposals will carry no authority over the budget process, but she said, "This plan is a sensible, sustainable budget for Governor-elect Inslee and the Legislature to consider next month."

Even a budget from an outgoing governor has value, Stuhlmiller said.

"She's saying, 'I wish you well. Here's a framework.' The new governor and new Senate majority coalition will want to put their own mark on it," he said.

Stuhlmiller said he appreciates the proposal to provide $546,000 in grants from the state and $1 million in grants from the federal government for the Voluntary Stewardship Program.

The grants would help Thurston and Chelan counties implement the program on a pilot basis to protect critical habitat while maintaining agricultural production.

"We're working hard to get dollars in the budget, because (the program) goes away in a year and a half if we don't," he said.