OLYMPIA – Gov. Jay Inslee has shortened his top priorities on the Legislature’s “to do” list for the special session to three things:

Pass an operating budget. Pass a new package for transportation projects. Toughen penalties for those who drive drunk or high.

At a press conference on the opening day of the 30-day special session, Inslee acknowledged that three other things he listed as priorities two weeks ago might not get done.

To read the rest of this item, or to comment, continue inside the blog.

OLYMPIA — The House passed a $34.2 billion budget for most state programs that would add money to public schools and assumes a jump in some taxes on businesses and consumers.

In a mostly party-line vote, House Democrats the two-year spending plan that their budget chairman, Rep. Ross Hunter of Medina, described as “a responsible budget that invests in our education obligations responsibly.”

Republicans described it as a budget that will cost the state jobs. “My taxpayers and my businesses are not happy about this budget at all,” Rep. Gary Alexander of Olympia, the ranking Republican on the budget committee, said.

The 54-43 vote, in which all Republicans and a single Democrat voted no, was merely the next step in the political dance between the House, the Senate and Gov. Jay Inslee, moving the state's biennial operating budget into negotiations among all those groups. Inslee also proposes changing some tax preferences to increase revenue; the Senate spending plan which passed last week has no tax increases, although some members who voted for that plan said they expected it to come back from the House with some “loopholes” closed.

Those negotiations will start Monday. The session is scheduled to adjourn on April 28, but a special session will be called if a spending plan isn't hammered out by then.

The House legislation that would actually end or revise those exemptions and extend temporary taxes on some business services and beer has not yet had a committee hearing.

The House budget reduces class siizes for young children in public schools, pays for all-day kindergarten in some of the state's poorest districts and adds money for school supplies and transportation. It also increases spending on early learning programs and all

“We all face the same problems. We choose different solutions,” Hunter said. The Senate plan relies on gimmicks and unrealistic assumptions the House plan doesn't use. “We don't give everybody everything they want. We fix broken stuff.”

But with state revenues expected to grow by $2 billion over the next two years and some $900 million in other changes that both sides support, the state shouldn't have raise taxes, Alexander said: “When do we say enough's enough? At what point do we say government needs to live within its means.”

Countered Majority Leader Pat Sullivan, D-Covington: “This is the only budget I've seen today.”

Friday’s four-hour budget debate in the Senate was mostly about programs that get cut or taxes that don’t get raised. But there were brief detours into other topics, including cigar lounges and Spokane Indians baseball. . .

To read the rest of this item, or to comment, go inside the blog

OLYMPIA – For the next three weeks, at a minimum, legislators will be throwing around the word “sustainable” more than a bunch of organic farmers hectoring an executive from Archer Daniels Midland.

It is the go-to cudgel for anyone who doesn’t like a budget proposal, and as Friday’s budget debate in the Senate showed, even when people help write a budget admit there’s plenty in it they don’t like. . .

To read the rest of this item, or to comment, go inside the blog.

OLYMPIA — The state budget office is questioning some parts of the 2013-15 operating budget proposal released earlier this week by the leaders of the Senate Ways and Means Committee.

The budget uses some assumptions that may not be legal, and others that don't have enough information to say whether they are realistic, David Schumacher, director of the Office of Financial Management, said in a letter to Committee Chairman Andy Hill, R-Redmond, and Sen. Jim Hargrove of Hoquiam, the ranking Democrat. 

“There are significant concerns with the structure of this budget, such as reductions to local government programs and our state's safety net,” Schumacher says at the top of a four-page list of questions about proposed decisions on education, health and  human services, natural resources, general government and “non-specific savings.”

The committee passed the budget on Thursday and moved it to the Senate, where it could come up for a debate this afternoon.

Sen. Andy Hill describes the budget proposal with Sen. Jim Hargrove waiting nearby in the State Reception Room.

OLYMPIA — Leaders of a Senate committee released a $32.5 billion operating budget that spends more on education, less on programs for the poor and doesn't raise taxes. They acknowledged they don't know if it has the support to pass that chamber, let alone become the actual spending plan for the next two years.

It differs significantly from recommendations from Gov. Jay Inslee last week, but meets four goals Senate budget writers set at the beginning of the year, Ways and Means Chairman Andy Hill, R-Redmond said: It doesn't hurt the economy by raising taxes; increases spending on education programs ranging from pre-kindergarten through graduate school; it preserves some services for “the most vulnerable” and it was crafted by members of both parties.

The budget adds about $1.5 billion to the state's public school system, with about $1 billion of that going to basic education costs. The state is under a Supreme Court order to meet the constitutional requirement to make education its top priority.

It adds about $300 million to the state's universities, colleges, community and technical colleges, and orders a 3 percent cut in tuition.

It relies on some $303 million in federal money for fully participating in Medicaid expansion from the federal Affordable Care Act, or Obamacare. It cuts money for such programs as Temporary Aid to Needy Families, childrens nutrition and aid to the disabled.

With the Senate divided 25-24 between a majority coalition made up of all 23 Republicans and two disaffected Democrats, and the remaining 24 Democrats, Hill emphasized the budget was drafted as “a true collaboration.”

But the ranking Democrat, Sen. Jim Hargrove of Hoquiam, said he was only sure of two votes for the budget, his and Hill's. Other Democrats may want to restore money to some social programs and look for tax increases or close tax loopholes to pay for it, he said.

“We'll have to wait to see the floor vote” to see if it has bipartisan support in the Senate.

In a prepared statement, Gov. Jay Inslee called the Senate budget proposal “deeply flawed,” and said it relied on “short-term fixes and budget tricks” while cutting social services to pay for schools.

A hearing on the Senate budget proposal was scheduled for about three hours after the spending plan was released. The House Appropriations Committee is expected to release it's own budget in the coming days.

Gov. Jay Inslee explains his budget as students from Seattle's Cleveland High School look on.

OLYMPIA — The state should make temporary tax increases on beer and some business services permanent, cancel a variety of other tax breaks and spend an extra $1.2 billion on public schools, Gov. Jay Inslee said Thursday.

Standing in front of a group of Seattle high school students involved in a program to boost science and math skills, the governor released his first budget proposal. It’s a plan for expanded programs from pre-kindergarten to high school, designed to satisfy a state Supreme Court order to adequately fund public schools.

“We must do hard things. It’s the right thing to choose education over these tax breaks,” he said at a press conference to announce his spending plan for the 2013-15 budget cycle.

The proposal met quick resistance from Senate Republicans, who will likely release the first full budget in the Legislature next week. It will not propose tax increases or ending the tax exemptions Inslee proposed, Sen. Mark Schoesler of Ritzville, the Senate Republican leader, said. . .

 To continue reading about the budget propsal, and reaction, or to comment, click here to go inside the blog.

House Speaker Frank Chopp buys cookies and a brownie from Kate Hunter and Maureen Bo, who were manning the table of a “bake sale” for seniors and the disabled in the Capitol.

OLYMPIA — The Legislature has a pretty full day of hearings on this Maundi Thursday, but most attention will be on Gov. Jay Inslee as he releases his budget recommendations for the 2013-15 biennium at 11 a.m. today.

Before Inslee announces his spending plan, a group of seniors in the basement of the Capitol is holding a “bake sale”, with plans to turn the money raised from cookies and brownies over to House Speaker Frank Chopp and Senate Majority Leader Rodney Tom as a way of signaling the state isn't spending enough on seniors and the disabled. Other groups are gathering for the budget unveiling in the governor's conference room.

Spin Control will have details from the press conference. In the meantime, the complete list of committee hearings can be found inside the blog.

WASHINGTON – U.S. Rep. Raul Labrador, R-Idaho, emphasized substance over style in the upcoming budget and immigration policy talks Wednesday on Capitol Hill.

Addressing the media with other conservative members of Congress, Labrador said he was encouraged by the ideas behind a budget plan set forth by Rep. Paul Ryan, R-Wis., to balance the federal budget within a decade. He stressed that policy decisions should flow from that benchmark and urged the Republican party to make policy commitments, rather than simply passing the Ryan budget which has no force of law.

“Some people in this caucus believe that the plan is just to pass the Paul Ryan budget,” Labrador said, adding his goal is not to pass “a meaningless document by itself, unless we actually implement the policies that will get us to a 10-year balanced budget.”

Ryan’s budget is just one of competing visions for a federal government spending plan. Last week, Sen. Patty Murray, D-Wash., released her own spending bill that roundly rejected several of the Republican House’s key provisions. The Ryan plan calls for no increase in taxes and complete reduction of the deficit by 2023 through reforms to Medicare and repealing the Affordable Care Act. Murray’s budget, on the other hand, calls for nearly $1 trillion in tax increases targeting the wealthy, additional stimulus spending and no fixed date for a balanced federal budget.

Both plans are working their way through Congress. President Barack Obama, also required to release a spending plan by law, has delayed doing so since February, to the ire of many Republicans. The White House now expects to release its budget next month.

Labrador is widely hailed as the prominent figure in a potential bipartisan immigration reform deal. Last week at the Conservative Political Action Conference, the freshman congressman reiterated his stance that there should be no new path to citizenship for illegal immigrants in any reform legislation. He called instead for enforcement of existing laws and granting “legal status” to those who entered the country illegally, without the possibility of citizenship.

He responded to comments made earlier in the week by Sen. Rand Paul, R-Ky., in favor of immigration reform. Paul called for a legal status approach in line with his own beliefs, Labrador said, rather than media reports that said he was pushing a path to citizenship. He expressed support for plans to fix what he repeatedly called a “broken system,” including several ideas offered by Paul.

“We’re talking about a minor issue,” Labrador said of the pathway to citizenship proposal. “The real issue that we’re dealing with is immigration reform. Let’s fix it.”

Labrador blamed labor unions for defeating legislation put forward in the Senate in 2007. That law would have allowed for a new type of temporary visa available to undocumented workers. A bipartisan group in the Senate released a set of principles to guide reform in January that included both a new “tough and fair” pathway to citizenship and admitting more workers into the country.

Any immigration reform legislation in the House would have to be vetted by the Judiciary Committee, said Labrador. He said the window for real reform would probably close in December, when campaigning for the midterm elections would begin in earnest.

People who have a question of a comment or a question on the City of Spokane budget could get a chance to phone it in Tuesday night.

That's when the city is holding a Telephone Town Hall on the budget from 6 to 7 p.m. The phone number is (855) 296-4484. Or you can get to the online link by clicking here.

“Everybody has to give. Everybody has to get,” Gov. Chris Gregoire says of the final budget deal.

OLYMPIA — Some state spending that legislators approved shortly before dawn Wednesday as part of a package deal to end the session may not survive the veto pen.

Gov. Chris Gregoire said she would sign the major reforms which were part of a negotiated package of legislation that came together in the closing days of one special session and needed a few hours of yet another special session to pass a bleary-eyed Legislature.

That package includes changes to state employees' early retirement system for workers hired after June, an attempt to equalize health insurance plans for public school workers and state employees, and an effort to project out four years to get state spending and revenue to match up.

But legislators stuck special projects into the supplemental budget “at a fevered pitch” in the final discussions, she said, and she's having staff comb through the 280-page document.

“I didn't agree to every dotted “i” and crossed “t” in that budget,” she said. “I'm sure there are things in there that I will veto. I want more in the ending fund balance.”

In her budget proposal, Gregoire called for an ending fund balance, which serves as a cushion against further economic downturns, of about $600 million. The budget passed Wednesday morning has a balance of just over half that, about $320 million. She doesn't have an estimate of how much she might cut, but said there's no way to trim out $300 million.

The reforms that Republicans were demanding in return for a vote on the budget, however, were carefully studied, she said. Those include:

* A change to the early retirement system for new state employees. Any new employee would be able to retire before age 65 after 30 years in state service by accepting a reduction of 5 percent for each year under 65. A 2000 law allows existing workers with 30 years service a 3 percent per year reduction between 65 and 55, and a 2007 law and 2007 allows for full benefits at 62.

* A review of the public school employees' health insurance systems — which vary from district to district — and incentives for the districts to offer plans that are in line with plans available to state employees, including plans with high deductibles and health savings accounts. One of the key elements of that legislation is to encourage districts to offer plans in which family insurance premiums that are no more than three times the cost of an individual's plan.

* Requirements that the Legislature adopt a four-year budget plan, rather than the current two-year plan, for the state General Fund that projects that scheduled expenses won't exceed projected revenues, and provides an ending balance that's in the black. The law also adds the state treasurer to the Economic and Revenue Forecast Council, which produces the revenue outlook that becomes key to legislative budgeting.

Those reforms were key to Republicans and some conservative Democrats voting for the budget. For weeks, Republicans demanded reforms before they'd consider any decision on taxes or vote on the budget. Democrats wanted a commitment on searching for more revenue, particularly the closure of a tax exemption for first mortgages written by large, multi-state banks. The stalemate that developed near the end of the regular session carried over into the special session. Last weekend, Gregoire and her staff put together a package that included all elements and began working with legislative leaders and budget experts on a way to make that work.

They ran out of time on Tuesday, and she called another special session, one that legislative leaders agreed would only last until they voted on the package of bills, and told them to stay until it was done.

She denied reports that one side wanted negotiations to fail, and doubted that it could have happened any faster.

In the end, Democrats got a budget very close to what they had proposed in the Senate but couldn't pass because three of their members lined up with the 22 Republicans to pass a different spending plan. The final budget had no cuts to public schools or state colleges, saved the Disability Lifeline and the Basic Health plan. Republicans got the reforms they said were needed to make the budget “sustainable.”

“They all got something critical. They all gave,” she said. Everyone was tired of cutting programs, she added.

Sen. Linda Evans Parlette, R-Wenatchee, who represented GOP Senate leadership in the negotiations, agreed with Gregoire's assessments on negotiations and the final package.

“I think it was a package deal. The governor is exactly right: We're all tired of cuts,” Parlette said.

But Gregoire's comments that she'd have staff  go through the final budget for things she might veto that were added at the last minute struck one government watchdog as odd. Jason Mercier of the Washington Policy Center questioned why it was alright for the governor to say she didn't have enough time to review the final product when legislators had to vote on it without having time to study it, and the public never saw the final product before it was passed into law.

OLYMPIA — A summit between legislative leaders, their top budget writers and Gov. Chris Gregoire took a break about 3:30 p.m., but is scheduled to resume at 4 p.m.

Legislators came out saying they'd been told by Gregoire not to talk about the details of the proposal she's put before them. Sen. Ed Murray, D-Seattle, did say that most of the time is not being spent on the budget, but on a package of reforms tied to the budget.

Those reforms include separate bills that would revise the health insurance system for public school employees, change early retirement options for state employees, and require the Legislature to create a budget that balances not just this biennium, but the next biennium as well.

OLYMPIA — Legislative leaders and their top budget writers were given a proposal by Gov. Chris Gregoire that represents her “go-home” proposal, her staff said.

Democrats and Republicans met separately on the proposal — which includes a version of the K-12 insurance reforms, pension reforms and four-year balanced budget requirements — then returned to for another meeting with the governor.

A spokesman for Gregoire said her package was aiming for “a middle ground…one that would not make anyone happy.”

No details on what they are proposing and counterproposing. Anything they work out will have to be shown to the separate caucuses to see if it can pass.

OLYMPIA — Legislative leaders and budget writers of both houses began huddling with the governor about 12:30 p.m., looking for a way to wrap up business before the clock runs out on the special session at midnight tomorrow.

On the plus side, everyone was quite chipper as they passed the time in the governor's waiting room, chatting about things like their Easter weekends.

On the minus side, the math says there's less than 36 hours left to do everything that needs doing — an operating budget, a capital budget, some version of the reform bills circulating.

As Gov. Chris Gregoire came out to motion legislators in, one of the ubiquitous tours of school children filed in to look at the portraits on the wall. Gregoire took the opportunity to greet them and explain what was going on.

Later in the day, she said, legislators might go on the House or Senate floor, “and you'd be able to see something.”

That brought some derisive chuckles from the assembled press corps, which had gathered on the waiting room couches to stake out the meeting and are already bracing for another special session.

“Hey! Hey!” Gregoire admonished the reporters in her sternest teacher tone, then told the students not to pay any attention to crew on the couches.

“We need to see if maybey we can get done with out jobs by midnight tomorrow,” Gregoire told the students as she left to start the meeting.

House Ways and Means Committee's hearing on several reform bills was postponed until 3 p.m. because of the leadership meeting.

OLYMPIA - Less than 48 hours left in the extra special session and both houses expect some work on 'reform' bills.

The House Ways and Means Committee  has a noon hearing on bills that passed the Senate on Saturday: new requirements for community supervision of recently released inmates, a new system to require budgets that balance over four years rather than two, and a major change to the health benefit programs for public school employees.

The Senate may vote on changes to the state pension system that end early retirement options for new state employees. That bill is reportedly a precedent to any Senate vote on the operating budget.

The big questions still remain, however. Will the House pass the 'reform' bills, and will the Senate pass the House budget?

Stay tuned.

OLYMPIA — A bit of drama this afternoon before the Senate broke for lunch, with plans by Democrats to go “at ease” in the afternoon while the Ways and Means Committee holds a hearing on the budget and reform bills connected to it…and possibly come back for votes in the evening or Saturday.

After the motion to go at ease, Sen. Mark Schoesler, R-Ritzville, made a motion to recess until Monday. The difference: under the latter, no votes could be taken through the weekend.

Several Republicans had already headed home for the holiday weekend, and Senate Minority Leader Mike Hewitt, R-Walla Walla, is recovering from surgery. Some Republicans were concerned about orders to return to the Senate on Saturday or Sunday to vote on the budget, and with Hewitt missing, even if they all made it back they could face a 24-24 vote, with Democrats holding most of their members but the three breakaway Ds from an early budget vote casting their lot again with the Republicans.

In case of a 24-24 tie, Lt. Gov. Brad Owen, a Democrat, would cast the deciding vote.

Senate Majority Leader Lisa Brown argued passionately against recess. The bills that Republicans had been pushing for could get through the committee and be available for a vote Friday or Saturday, she said. If the Legislature has a chance of getting done by Tuesday, they'll need to move that legislation to the House as quickly as possible.

“This is not about the illness of one member. This is about getting the business of the state done,” Brown, D-Spokane, said. “If necessary, I will personally take Sen. Hewitt's vote on that bill.”

There's no problem with holding the hearing, Schoesler said. But the threat of being called back on Saturday or Sunday is a problem with some members already home with their families.

“The threat of a call of the house with a holy holiday coming is a very serious issue,” he said.

Sen. Randi Becker, R-Eatonville, said her 94-year-old mother was being baptized as a Catholic on Saturday in Yakima, and “I hope to heck we get to go tomorrow.”  Sen. Linda Evans Parlette, R-Wenatchee, said one of her relatives was also being baptized on Saturday. (Note: Catholics traditionally baptize new adult members during their Easter Vigil service.)

Not to be out religious-ed, Sen. Ed Murray, D-Seattle, said the Democrats two Jewish members had agreed to stay as late as necessary Friday night, which is the beginning of Passover, “willing to forego their very holy day in order to get the business of the state done.”

In the end, Owen ruled that the motion to go in recess came first, took precedence, and called for a vote on that. It passed. Unknown yet whether there will be votes late into the evening Friday, Saturday or Sunday.

OLYMPIA — Admitting that it's not the final solultion to the state's fiscal problem but a way to “move the process forward”, House Democrats passed and sent to the Senate a spending plan to fill the state's budget hole.

The most important aspect of the budget that passed on a 54-42 vote, Ways and Means Chairman Ross Hunter emphasized, is “it does not cut education.”

That's a not too-veiled reference to a budget passed in the regular session by Senate Republicans and three break away Democrats that did cut public schools and colleges. That group has since proposed a budget that restored those cuts to education, but it has yet to receive a vote.

The House budget has no new taxes — some could be added later, including a tax on “roll your own” cigarettes the chamber passed earlier in the day and sent to the Senate — and leaves the state with an ending fund balance of about $336 million, or less than 2 percent of the overall two-year budget of nearly $31 billion.

“This is part of the resolution to the special session,” Hunter, D-Medina, said. The 30-day special session must end at midnight Tuesday, and many state officials believe it will be difficult to meet that deadline

Republicans said the budget doesn't go far enough to rein in state spending practices.

“It's not sustainable without the reforms,” Rep. Gary Alexander, R-Olympia, said. “It detracts from the negotiations process.”

The Senate could vote on the budget as early as tomorrow if its members can reach agreement on several reforms, Sen. Ed Murray, D-Seattle, the chairman of that chamber's budget committee said.

OLYMPIA — Senate Republicans and the conservative Democrats who helped them pass an alternate budget last month said they are no closer to agreement on a plan to fix the state's operating budget problems.

“The longer we stay here, the less sustainable th budget they put out becomes,” Sen. Joe Zarelli, R-Ridgefield, said. The proposal released Wednesday morning by House Democrats “just moved us farther apart as far as the structure of the budget.”

Prospects that both chambers will pass a budget and accompanying reforms before the next Tuesday, when the special session is scheduled to end, seemed to grow dimmer with each passing hour.

Zarelli, the ranking Republican on the Senate Ways and Means Committee, contended it was the GOP and the three “road kill” Democrats who have given up the most in negotiations over certain reforms.  They dropped a proposal to skip next year's payment to the state pension system and a proposal to close one of the pension plans. But they want to end early retirement provisions for state employees set up under two separate laws; House Democrats are proposing just ending the most recent law.

“We've moved significantly, but we're not going to fold our tent and go home,” Zarelli said. Democrats have supported the complete package of changes to early retirement provisions in the past, he added.

Sen. Jim Kastama of Puyallup, one of the three Democrats who voted for the budget crafted by Republicans, said a new proposal to pass a law requiring a balanced budget for two years and develop ways to balance it over four years doesn't go far enough toward the goal of structuring spending plans so legislators don't face massive cuts every year when they start a session.

The Legislature already passes a balanced budget over two years, even if that's not required by law, Kastama added. “If we didn't do that, we couldn't sell our bonds.”

Through the assembled reporters, the coalition of senators traded jabs with House Democrats and their earlier statements about who was responsible for the slow progress toward a budget deal in this latest special session.  Each group accused the other of refusing to make concessions, and painted themselves as the ones giving the most in closed door negotiations.

House Majority Leader Pat Sullivan, D-Covington, had said negotiators hadn't even been able to negotiate the budget because of Senate Republicans insistence on reforming state government. “We've come significantly toward their position.”

Countered Zarelli: “I don't see it as a good faith effort. They want to take the last few days before Easter, and send an Easter egg our way.”

To complete its work by Tuesday, the House will have to pass a budget and the bills surrounding it sometime this week, and send them to the Senate where it must pass in the same version. House Democratic leaders said they don't know if they have the votes to pass some of the reforms they are proposing; if they do, it goes to the Senate where Democrats also hold a majority but don't have the votes to pass the current proposal.

Asked whether the state was looking at another special session — which would be the third since Thanksgiving to address the current budget problem — Zarelli said Republicans expected “to be flexible but not roll over” and weren't going to be rushed into a vote: “It's going to take whatever time it takes.”

OLYMPIA — House Democrats rolled out the latest version of a general operating budget this morning, along with several changes to state programs, but conceded they didn't know whether this exact plan will break the ongoing stalemate.

“We actually don't know if we have the votes for all this,” Rep. Ross Hunter, D-Medina, chairman of the House Ways and Means Committee, said.

House Majority Leader Pat Sullivan, D-Covington, called it an effort to “get the ball rolling” and address concerns from Republicans that have been discussed in negotiations, rather than the final package of budget and supporting laws that will pass.

“It's mostly an effort to keep the process moving,” Sullivan said. The clock is ticking. The last day of the special session is Tuesday, and in between are Good Friday, the beginning of Passover, and Easter.

Hunter said he assumes there are enough Democratic votes to pass the budget in the House, but some of the other changes that the budget relies on — changes to the state's early retirement plans, reduced class sizes that are on the books from a statewide initiative but often cancelled to cut costs, new rules for balancing the budget over two and four years — will need Republican votes to pass. Although Democrats and Republicans from both chambers have been in negotiations for three weeks, there's no indication the GOP will sign on.

In a report on Northwest News Service, Joe Zarelli, the top Republican on budget matters in the Senate, referred to reforms the Democrats were proposing as “dust.” Senate Republicans, and Democrats who joined with them during the regular session to pass a very different budget, scheduled a press conference for 12:30 p.m. For a report on that press conference, click here.

House Democrats also said they would introduced a pared down version of the Capital Budget, which they refer to as the Jobs Plan, that is nearly $1 billion. It's that plan that has major state construction project, some of them funded by state bond sales and others by special accounts. On the list of projects from various accounts is some $37 million to complete the Biomedical and Health Sciences building at Washington State University's Riverpoint campus in Spokane.

Rep. Hans Dunshee, D-Snohomish, chairman of the Capital Budget Committee, said it was time to take advantage of low interest rates in the bond market to build the projects. All the projects listed would employ more than 22,000 people, most in the hard-hit construction sector.

But the Capital Budget is tied in part to the General Operating budget, which revenue projections and scheduled expenses say has a hole of more than $1 billion. Legislators struggled through the regular 60-day session and are 23 days into their 30-day special session, trying to fill that hole.

In past budget plans, Democrats have suggested an accounting shift that delays a payment to the state's school districts by a few days, moving it into the next biennium so it doesn't show up on the state's books. Republicans have criticized that as a gimmick, and the latest budget drops that.

It also does not have a Republican proposal to skip a payment to the state's pension plans, which Democrats have derided as a gimmick and did not include in previous budgets. Democrats are proposing one shift to the state pension system, eliminating for new employees an option for early retirement that was approved in 2007, allowing retilrement with a full pension at 62 for those with 30 years of service; Republicans also wanted another early retirement option passed by the Legislature in 2000; Democrats don't have that, nor are they calling for the closure of some other plans. That cuts estimates for long-term savings about in half, to $1 billion over some 20 years, but doesn't really help or hurt the General Fund's bottom line this biennium.

Instead of the delayed school payment or the skipped pension payment, House Democrats embrace a proposal by Gov. Chris Gregoire to modernize the system the state uses to pay cities and counties the money collected for sales tax. That shifts about $238 million into a working reserve, and boosts the budget's bottom line.

The budget has  no tax increases, and no reductions to tax credits or exemptions offered to busineses. It makes no changes to public schools or state universities and colleges, and drops a proposed 5 percent increase in Temporary Assistance to Need Families payments.

The package of reforms that will have a hearing this afternoon in the House Ways and Means Committee includes a new law that would require a two-year balanced budget and propose a way to create a four-year balanced budget. But that could fall short of a proposal by Senate Republicans and some conservative Democrats for a four-year balanced budget amendment.

How close are they to reaching a budget deal? About this close, Gov. Chris Gregoire said today.

OLYMPIA — Legislative negotiators are closer to a comprehensive agreement on the state's General Fund budget, but some of the  hardest decisions remain, Gov. Chris Gregoire said today.

Gregoire said they need to reach agreement by next Tuesday to have any chance of the Legislature working out the details, writing the budget in the proper legal language and passing it by Good Friday. Plans for Rob McKenna, the Republican attorney general running for governor, to announce his own budget proposal on Monday are not helpful, she said.

“I don't need something external…to throw a monkey wrench into it,” she said of budget talks.

The McKenna campaign announced the likely GOP gubernatorial nominee will release a “budget policy paper” Monday afternoon in Olympia.

“The failure of the Legislature to complete its most basic task of passing a budget proves that Olympia is broken and highlights the need for a new direction,” McKenna said in a prepared statement accompanying the announcement of the press conference. “My budget policy paper provides some specific ideas on how a McKenna administration will approach creating a sustainable budget.”

Sustainability has been one of the main watchwords of legislative Republicans as they pushed for changes in the spending plans of majority Democrats. But both sides argue that the other has proposed things that are one-time budget gimmicks and therefore not sustainable. Republicans criticize Democratic plans to delay a payment to the school districts by a day, shifting those costs into the next biennium. Democrats criticize Republican plans to skip a payment to the state's pension systems.

Gregoire has said both ideas are “off the table” as negotiators look for a comprehensive budget solution.

The governor said she hadn't heard of McKenna's plans but contended that a specific spending plan at this stage would not be helpful. “I don't need a sixth budget proposal. Why weren't these ideas brought up to us two months ago or one month ago?”

Budget negotiators are looking at a package of ideas that touches all aspects of the budget along with ideas for reform and added revenue. “There's something in that package for all of them not to like,” she said. Once there's an agreement among leaders, they'll have to put it to their members and see if they have the votes to pass it.