Things need to change in Olympia.

After the Democrats markedly increased their majority in the state House and Senate in the 2006 election, they promised to show restraint in spending. In fact, Gov. Chris Gregoire said she’s confident her party won’t stray far from a “pragmatic, fiscally prudent agenda.”

A little more than a year after that promise, we now find out that the $1.2 billion surplus that Gregoire’s budget office originally projected has now become a projected $2.4 billion shortfall. This translates into a $600 million deficit by 2009, according to her own budget office.

While the governor has acknowledged the crisis and said in her state of the state address that we need to be “frugal,” she is failing to take the necessary steps to get Washington back on the right economic track.

With a 33 percent increase in state spending since she took office, Gregoire has defied her pledge to not raise taxes, and has actually increased them by $500 million. This has created a $852 million gap even with expected revenue factored in.

Gregoire is now trying to cover herself before this fall’s gubernatorial election on all the issues she’s failed to address by using her supplemental budget — which is why we can’t use any of that money to soften the impending deficit.

Nevertheless, some still argue that our state officials don’t have their priorities wrong and are actually quite decent on taxes and spending.

It’s true that a report by the Washington State Budget and Policy Center shows that Washington state is one of the lower-taxed states in the nation; however, another report by the American Legislative Exchange Council tells a different story.

This report ranks our state 31 of 50 in a State Economic Competitiveness Index report based on 16 factors.

The primary reason for this, the report found, was the high tax burden imposed on Washington citizens. This is why businesses like Boeing have relocated their corporate headquarters to Chicago, and roughly 20 percent of businesses fail each year in the “Evergreen State.”

Gregoire may trumpet the Forbes rating that Washington is ahead when it comes to state business climates; however, the subsequent results vary drastically when compared to other studies.

For example, the Corporation for Enterprise Development conducted a study based on performance, business vitality and development capacity, and gave Washington an overall rating of “unfavorable.”

The bottom line is that even the “glowing” Forbes report “suggests lingering competitiveness concerns for our state, particularly in costs and regulation” said Richard Davis, a spokesman for the Association of Washington Businesses.

Davis also said that policy makers and business owners need to examine the specific, sometimes contrasting needs of high-tech industry groups with manufacturers before making their judgments.

While I agree with Republican calls for spending cuts and a major overhaul of our state’s largely unfriendly business regulation climate, I think that a major stepping stone to reach that point must be a more transparent government.

Our state recently received an “F” rating for open government from the Better Government Association and the National Freedom of Information Coalition.

We must place a greater emphasis on government accountability and efficiency by pushing hard for the continuation of performance audits.

Unfortunately, some would rather dip into the performance audit account in order to reimburse school districts and educational service districts, as seen in a bill discussed earlier this month.

The disregard for the taxpayer by legislators in Olympia is revealing. The Evergreen Freedom Foundation pointed out that nine recent audits identified $3.3 billion in potential cost savings.

With attitudes like that of Rep. Hans Dunshee, vice chairman of the house appropriations committee, who said he sees little need for spending cuts because the deficit apparently “could disappear as easily as it was created,” running rampant in Olympia, this will be an uphill battle.

But in the interest of furthering our state’s vibrancy and economic future, I submit that Republicans and Democrats must continue to pursue reform on government spending, accountability and overall efficiency.

[Reach columnist Tom Walker at opinion@thedaily.washington.edu.]