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Budget deal seems unlikely

Wed., April 4, 2012, 2:38 p.m.

With time running out, latest proposal faces problems

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 the 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.”

That proposal, and the accompanying legislation to make them work, was designed to close a gap of about $1 billion between projected revenue and scheduled expenses, and reform several aspects of state government. In announcing it Wednesday morning, House Democratic leaders acknowledged they didn’t yet have the votes needed to pass all legislation in the House.

House Majority Leader Pat Sullivan, D-Covington, called it an effort to 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.

But within hours, 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.

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.

House Democrats said they also have 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.

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.

Sullivan 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.”


 

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