State economist Steve Lerch, right, explains figures from the latest economic forecast to Rep. Ross Hunter Tuesday.

OLYMPIA — The state's economic outlook is improving, in part because of better home sales, and the state could have an extra $231 million in tax revenue over the next two years for its general operating budget.

That's the word from the Revenue and Forecast Council, which believes the March projections were a bit low by about $110 million for this biennium and $121 million for the 2013-15 biennium.

While a relatively small percentage of the state's operating budget, which tops $32 billion, negotiators who have been locked in budget talks for weeks predicted it will generate an agreement relatively soon and prevent a partial government shutdown in July.

“We'll get closer as a result of this,” Rep. Ross Hunter, D-Medina, chairman of the House Appropriations Committee, said.

“It should break one of the final logjams,” Sen. Andy Hill, R-Redmond, chairman of the Senate Ways and Means Committee, said. . . 

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OLYMPIA — After 141 days of regular and special session, the most important day for the 2013 Legislature could be Tuesday.

That's when the June economic forecast will be released, and good numbers on increasing revenue coming in and decreasing demand on services could be enough for the House and Senate to settle on a budget.

In an interview Monday, House Speaker Frank Chopp, D-Seattle, wouldn't go so far as to say he was optimistic that the forecast would be that good. But he was, in a word, hopeful.

“I'll deal with whatever it brings,” he said.

Early indications are the state could see $90 million in savings from lower projected costs for services, known as the caseload forecast. Tax revenue could also be higher than predicted in March. Whether that  will quiet House Democrats' calls for closing some tax loopholes to generate extra money for the 2013-15 operating budget, isn't clear. And Chopp wouldn't be pinned down on hypotheticals.

“Let's just wait  until we see the revenue forecast,” he said.

Without the need for tax increases from House Democrats and Gov. Jay Inslee, the Majority Coalition Caucus in the Senate has little leverage for reforms. Last week Majority Leader Rodney Tom, D-Medina, said the group was willing to give up on two reforms it passed in the closing days of the first special session: one that tied growth in non-education spending to a formula that includes inflation and population growth and another that would allow school principals to reject teachers assigned to their schools.

The Senate has already passed another set of education reforms that could be more palatable to the House.

So that left the third reform, some changes in the workers compensation system's rules for structured settlements to injured workers. That's still a no-go in the House, and Chopp argues there's no deficit in the system that needs to be addressed at this point and the best way to save money quickly is to get injured workers back sooner, like in the state program that provides incentives for companies that bring them back in different jobs with lighter duties while they recover.

If the Legislature reaches a quick agreement on the 2013-15 operating budget, there is a question about whether it will pass two other priorities set down by Gov. Jay Inslee at the start of the first special session: a package of new transportation projects and increased maintenance for existing roads and bridges, funded by new gasoline and vehicle taxes; and tougher penalties for repeat drunk drivers.

Both are important, Chopp said. Legislative leaders are trying to work out the timing on the transportation package and still in discussions over drunk driving laws.

But the operating budget is the thing “we need to have done.”  

The Economic and Revenue Forecast Council meets at 10 a.m. Tuesday.

OLYMPIA – Building new coal terminals near Bellingham and Longview will have major economic benefits for the entire state, a new study conducted for the Washington Farm Bureau suggests.

“All Washington exporters stand to benefit,” John Stuhmiller, Farm Bureau director, said. More trains and bigger terminals will help Northwest farmers, who export most of their wheat and some of their other crops.

“We have to trade, we have to import,” Sen. Mark Schoesler, R-Ritzville, said at the news conference to announce the report.

But opponents of the terminals and the increase in coal trains that would feed them say there are negative impacts, too, that the state should study…

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OLYMPIA — There are signs that the ice dam that is the Washington Legislature may be starting to melt after the glaciation of the regular and first special sessions.

Such deep freezes are normally hard to sustain in the Capitol, in part because there are things that must be done, like passing a budget so the state can spend the money taxpayers are paying, and in part because there is usually a significant amount of hot air trapped under the dome.

The most promising sign of sub-domal warming was last week’s passage of a change in the estate tax law. . .

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OLYMPIA — Minutes before midnight, the Senate passed a change to the state's estate tax that supporters called a technical fix and opponents called an unconstitutional “reach back”.

After a day of negotiations and discussions about other bills that might be traded in exchange for a yes vote on the bill, the Senate voted 30-19 to allow the tax to be levied on certain trusts set up by married couples.

The law allows the estate to defer taxes when the first spouse dies, and pay them when the second spouse dies. The state Supreme Court ruled earlier this year the law was incorrectly written to cover some estates in which the first spouse died before the law passed in 2005. The ruling allows some couples to escape the estate tax, which a single person's estate would have to pay.

“It truly does close a loophole that was determined by the Supreme Court,” Sen. Andy Hill, R-Redmond, said. It also keeps the state from having to pay some $160 million in refunds over the next two years, which he said should be spent on education and end talk of raising taxes for the state's operating budget, which is still under negotiations.

Sen. Rodney Tom,D-Medina, said he voted against the estate tax in 2005 because he thinks it's a bad tax for a state to levy. But he voted for the fix because “it was very clear when we passed that the intent wasn't to tax couples and singles differently.”

But some Republicans argued that the bill wasn't a fix at all, but an invitation to another lawsuit, and another court loss.

“I don't think we'll ever see this money,” Sen. Mike Padden, R-Spokane Valley, said. “The Supreme Court will rule the retroactivity is unconstitutional.”

Before the Senate would vote on the estate tax, the Majority Coalition Caucus insisted that both it and the House pass reforms to the state's Model Toxics Control Act. After a day of negotiations, it passed that bill and sent it to the House, which passed that bill in a matter of minutes.

That action had some of the House's more conservative members, like Rep. Shelly Short, R-Addy, in rare agreement with some of its more liberal members, like Rep. Hans Dunshee, D-Snohomish. Short said the reforms would encourage faster cleanups of toxic sites.

Some members complained that it was a complicated bill that they hadn't had time to read. After a short debate, however, the toxics cleanup bill passed 67-18.

OLYMPIA — After spending most of Thursday in meetings or “at ease” the Legislature moved with uncharacteristic speed to pass bills as part of a complicated deal and beat a deadline on fixing the estate tax.

The Senate passed a change to the Model Toxics Control Act and sent it the House, which passed it in a matter of minutes. That sets up a vote in the Senate on a change in the estate tax the House approved earlier in the day

OLYMPIA – In another sign that Washington will be the national battleground this fall over genetically altered foods, opponents of a ballot measure requiring those products to be labeled raised almost $1 million last month.

None of it came from Washington state. . .

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OLYMPIA — The Senate remains “at ease” while leader discuss a possible “fix” to a problem with the estate tax.

The House passed the bill late this morning, in what was described in that chamber as an agreement over language worked out between the two different versions each chamber passed to address what's known as the Supreme Court's Bracken decision.

But one Senate source says that while there is an agreement on the language, there is not yet an agreement by the Majority Coalition Caucus to vote on the bill — a distinction that could make a big difference because the clock is ticking toward Friday morning when the state will have to start sending out refunds.

Before agreeing to vote on the bill, some members of that caucus could also seek a vote on one or more of their reform bills, to change state policy on schools, budget increases or the workers compensation system.

Those discussion continue, so the Senate remains “at ease” and legislators and staff have been told to prepare for a long night.

One of the rules of demanding a ransom is you must first know what ransom you want to demand.

Editor's note: An earlier version of this post said the Senate was expected to vote on the bill today, and that there was an agreement to take the vote, based on conversations with legislators. A spokesman for the Majority Coalition Caucus says, however, that there was never an agreement to vote, only an agreement on the language that would be in the bill if it came to a vote, and a vote was never scheduled.

OLYMPIA — Sen. Mike Baumgartner's annual Flag Day Potluck is the latest casualty of the Legislature's inability to get a budget. 

The potluck, scheduled for Friday at Comstock Park, was cancelled because Baumgartner can't attend. He's in Olympia with the other legislators (most of them anyway) with the second special session which began Wednesday.

Baumgartner said the food will go to the Union Gospel Mission.

OLYMPIA — The House approved a change in the estate tax to address a loss in court that could cost the state more than $40 million in the coming weeks.

On a 53-33 vote, it approved a deal negotiated with Senate Republicans that could keep refund checks being sent tomorrow to families that challenged one aspect of the estate tax that was enacted in 2005. It provides some new deductions for family owned businesses that have high property assets but relatively small cash reserves. . .

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City Council candidate Mark Hamilton says he hasn't lived at his address in the city of Spokane since November and barely lived in the home since September as a result of construction in the home.

But Hamilton, a real estate agent and the pastor of 1Body Ministries, also said that from the time he acquired the dilapidated home at 217 E. Pacific in May 2012 until September he usually spent about four nights a week there. Utility records show the home had no water or electricity the first month he lived there. He claims to have slept on a cot at his newly-purchased home rather than at his other home outside city limits.

“I actually slept on the premises beginning on May 15, 2012, on a camp cot in the upstairs bedroom. There were no utilities at the time, but I was concerned about the homeless and transient persons in the area and lack of security,” Hamilton said in a court declaration. He said he bathed at a friend's home or at his other home outside city limits.

Last month two residents who live in Hamilton's council district filed a lawsuit arguing that Hamilton wasn't qualified to appear on the ballot. He is challenging Councilwoman Amber Waldref in her bid for reelection.

In February, responding to questions about whether he met residency requirements to run for Spokane City Council, Hamilton said he had spent the majority of his nights since May at the home on Pacific.

When Hamilton voted in November, he was registered to vote an address outside city limits. That's one of many factors noted in the lawsuit as reasons Hamilton doesn't meet residency requirements.

The Spokane City Charter says “a person must be a qualified voter of the City of Spokane and have been a resident of the City, and of the appropriate council district, for the one year immediately preceding the time of filing as a candidate for, or the time of appointment to, the office of mayor, council president, or council member.”

 Hamilton's attorney, Dustin Deissner, argues that the line in the charter does not require a candidate to be a qualified voter “for the one year immediately preceding the time of filing” (last month). That time requirement, he said, only applies to being a resident. He said it was an oversight that Hamilton was registered to vote at an address outside city limits.

The lawsuit and Hamilton's response is attached to this post.

Hamilton has said he will no longer respond to requests for comment from The Spokesman-Review and in a Facebook post last month called on pastors to rise up against the newspaper. He also called S-R reporters “demonic soothsayers.” To see his full post, written soon after this column appeared in the newspaper, keep reading this post.

Documents:

OLYMPIA — With the state looking at the prospect of wandering off a fiscal cliff without a budget, Gov. Jay Inslee today canceled a planned trip to the Paris Air Show next week to helpboost Boeing and the rest of the state's aviation industry.

The biannual international air show was the anchor for  European trade missions in 2011 and 2005 by Inslee's predecessor, and then-Gov. Chris Gregoire sandwiched the last trip between stops in Spain and Germany.

But the trip is always eyed skeptically by critics, and with the Legislature entering its second special session without a budget that would give the state the authority to continue many programs and policies after June 30, Inslee said earlier in the week he might not make the final decision until just before the plane left for Paris.

“I think it would be important for the governor to be there,” he said, adding that the governors from other states with prominient aviaition industries are expected to attend.

This morning, however, Inslee's office announced he was asking U.S. Rep. Rick Larsen, a fellow Democrat and a member of the House Aviation subcommittee, to take his place in the 52-person delegation. 

WARNING: This video is painful to watch and hear. Its only saving grace is that this exercise helped raise money for the Second Harvest Food Bank. Let's hope this duo does not reunite. The political pro of Street Music Week remains — sorry, mayor and council president — Mary Verner.

OLYMPIA — The Washington State Patrol swore in 27 new troopers Wednesday, graduates of the 101st class from the agency's academy.

State Supreme Court Justice Mary Fairhurst administered the oath of office as Gov. Jay Inslee, Chief John Batiste and family members watching from the railings on two upper floors looked on.

Watch for them soon in a patrol car near you.

OLYMPIA — The Second Special Session began this morning with a bang — of the gavel, anyway — and not much more than a whimper in the House, which went into recess until tomorrow morning.

The Senate had about two dozen folks on hand for the official opening, which was followed by  some long pauses, the reading of the official call for the second overtime session, and an immediate caucus by the Majority Coalition Caucus. Sen. Linda Evans Parlette, R-Wenatchee, underscored immediate, apparently in an effort to herd the cats into the meeting room.

The biggest problem right now for Spin Control is how to refer to this new special session in short hand.

Spec Sess 2?  2nd Spec Sess?  Spec Sess II?

And is it most accurate to describe this is Day 1 of the second special session, or Day 31 of this year's special sessions, or Day 136 of the entire session?

The Secretary of State office has done some research on special sessions over the years, and notes long overtimes were needed in 1951, 1973 and 2001. The most days ever needed was 163, in 1973 and 2001.

If legislators take the full 30 days for this special session, they'll go 165 days and set a new record — which may not be something many of them will brag about in the next election.

OLYMPIA – The Legislature closed for about 17 hours overnight Tuesday – the amount of time between its ineffectual first special session and a second special session that some say could bring the state to a fiscal cliff.

Gov. Jay Inslee criticized the largely Republican Senate majority for pushing ideology over budget compromise as he issued the proclamation for a second legislative overtime period Tuesday morning.

“The budget is our primary duty. That’s where our focus should be,” Inslee said. “They need to come to a common-sense position, so that we can fulfill the obligation to our kids”. . .

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Speaker Pro Tem Jim Moeller and Lt. Gov. Brad Owen are projected on the wall of the Senate as each brings down a gavel to close the special session.

OLYMPIA — The First Special Session of the 2013 Legislature closed this afternoon with the bang of gavels in the Senate and House, and a smattering of applause from legislators in their seats.

Or as they'd probably say on ESPN, the First Special Session is in the books…

Day one of the Second Special Session starts at 9 a.m. Wednesday.

OLYMPIA — The First Special Session of the 2013 Legislature is expected to be gavelled to a close around 3:30 p.m.

Legislators are being told to be back at their seats around then, and this special session will end less than 18 hours before the Second Special Session begins at 9 a.m. Wednesday.

Normally the end of a session is called sine die, pronounced SIGH-nee DIE.

This one, however, might more properly be called Tiny die.

Or Phony die?

Or Whiny die?

OLYMPIA — Criticizing Senate Republicans for pushing ideology over budget compromise, Gov. Jay Inslee this morning called the Legislature into a second special session starting Wednesday.

He also said he was directing his cabinet to study what state government services would have to be shut down if the Legislature goes beyond July 1 — the start of the fiscal year — without passing a budget.

“They need to come to a common-sense position, so that we can fulfill the obligation to our kids,” Inslee said.

Senate Majority Coalition Leader Rodney Tom, D-Medina, said Inslee was wrong in his assertion that House Democrats have done all the compromising and the coalition has done none. But discussions will continue, and a budget agreement will be reached before July 1.

“We will get the job done,” said Tom, one of two Democrats who joined with all 23 Republicans to form the coalition before the legislative session started. “This talk of a government shutdown is nonsense. It's not going to happen.”

House Majority Leader Pat Sullivan, D-Covington, said he also hoped a budget would be negotiated and passed before the end of this month, but Inslee was right to study the implications of that not  happening. Tom has been wrong in some previous predictions, Sullivan said.

“I believe at the start of the regular session, he said we'd be done in 105 days,” Sullivan said.

Today is the last day of the first 30-day special session Inslee called after the Legislature failed to pass an operating budget of more than $33 billion during the regular 105-day session. The two chambers have spent most of that month in recess and passed relatively little legislation as most members awaited word from their leaders on progress of budget negotiations. There's little incentive to pass any new bills in either chamber today, because under legislative rules they would be returned to their house of origin when the second special session starts at 9 a.m. Wednesday.

All sides in the budget impasse argue that they are doing the right thing to increase spending on public school education, which is a mandate from the state Supreme Court. Inslee said House Democrats have compromised the most by dropping many of their proposals to reduce or eliminate tax breaks while balancing increases in the budget between schools and needed social services.

Senate Republicans say their basic budget spends more education than the House's basic budget, about $1 billion compared to $700 million, and does it without tax incrases. House Democrats say they boost that $700 million by more than $100 million through the closure of tax breaks in separate legislation, giving the Senate the chance to accept or reject extra programs for public schools and the state's college system.

Along with the budget, however, the Senate Majoritiy Coalition also passed three  bills over the weekend that require certain changes or reforms in state law. One would allow principals to reject teachers being assigned to their schools, another would cap the growth in state spending on non-education programs to a formula based on inflation and population, and a third would expand the two-year-old system of allowing injured workers to accept structured settlements rather than regular payments from the state's worker's compensation system.

Coalition members call those proposals reforms. Inslee and House Democrats call them ideological policy decisions.

House Democrats gave up their ideological policy bills on topics like abortion and expanding some state college aid to immigrants, Inslee said, but the Senate continues to push theirs.

“We have made significant movement,” Tom countered, including agreeing to accept federal money by expanding Medicaid under the Affordable Care Act and discussing some tax increases. “But there needs to be reform.”

Sullivan said there has only been small progress on the budget, in part because of Senate Republicans' insistence on their policy bills. “We haven't gotten to the point where we are actually negotiating the budget.”

OLYMPIA — It's the final day of the First Special Session. Or possibly the eve of the Second Special Session. Take your pick.

Legislators don't have much incentive to pass anything today unless they could pass it in both chambers, because at the beginning of a special session everything still hanging fire goes back to its “house of origin”, which means they'd just have to pass it again.

Gov. Jay Inslee has a 10:30 a.m. press conference “to discuss the special session”, which means he could issue the call for the second session at that point, or urge them to get as much done as possible before midnight before the call goes out.