As state lawmakers enter the year with another partisan budget battle, the Main Street Alliance of Washington is bucking the cliche that every small business owner wants lower taxes and less government spending.

“Washington is a great place to live, work and run a business,” Joshua Welter, the alliance’s director, said. “We want to keep it that way and make it better, not see how quickly we can race to the bottom.”

In January, the alliance sent an open letter to Gov. Gregoire and the state Legislature. It called for an end to further budget cuts, and a renewed investment in health care, infrastructure and education.

Such investment would help rebuild the state’s economy by allowing small businesses to grow and create jobs, according to the alliance. The Main Street Alliance is a public policy advocate that supports and promotes small business owners.

Lawmakers opened the 2012 legislative session facing a familiar scene: a state budget still deep in the hole, even after billions in cuts.

In her State of the State address, Gregoire called for a 10-year, $3.6 billion transportation infrastructure package, a sales tax increase and a new fee on in-state oil production to provide new revenue.

State Republicans chided the proposal.

Rep. Jason Overstreet, a Blaine Republican who represents the 42nd district, has said Democratic lawmakers refuse to accept economic reality, citing unsustainable spending between 2005 and 2008 as cause for the current situation.

He has called for government reform and prioritizing economic growth through lower taxes and less spending.

Alliance member Gretchen Bjork, who owns DIGS showroom and Left Right Left Shoes in Bellingham, said by email that she would prefer a small sales tax increase over further state budget cuts.

Bjork said a modest increase would be less noticeable to her businesses than job losses due to cuts in state services.

“I agree that we need to live within our means, but think that our state lawmakers need to explore all options and consider the ripple effect that occurs when jobs are lost,” she said. “Someone who is unemployed, or takes a pay cut, will cut back on their spending, which directly affects small businesses.”

Ken Oplinger, president and CEO of the Bellingham/Whatcom Chamber of Commerce and Industry, said cuts to infrastructure spending, including funds for roads and public utilities, have a drastic impact on small businesses. If the state wants to help business owners, supporting infrastructure is key, he said.

Oplinger said lawmakers on all sides of the political spectrum should seek compromises as they move forward in 2012.

“Any time you see things that affect the community, business is going to be affected as well,” he said. “Everything needs to still be on the table at this point.”

Welter agreed that all potential revenue options need to be a part of the state’s budgetary equation. He cited a January report from the Economic Opportunity Institute that found if lawmakers had balanced budget cuts since 2008 with equal amounts of tax increases, about 27,000 public and private sector jobs could have been saved. The institute is an independent nonprofit policy center that advocates for middle-class workers and families.

Welter said tax increases are not the only option to draw in more dollars for the state. The alliance also wants lawmakers to consider closing tax loopholes for Wall Street banks, particularly ones involving mortgage sales that fail to pump money back into the state economy.

“While we haven’t closed the door to any revenue options, revenue needs to be part of the discussion,” Welter said.

The next step for the alliance will be convincing lawmakers and taxpayers that more revenue to the government can have positive benefit.

Welter said the stability of small businesses is directly tied to support for public investment in the communities they serve.

“There’s a ripple effect through the economy,” he said. “When folks don’t have money in their pockets, they’re not going to spend it in local businesses.”