Deal on state budget remains elusive

OLYMPIA – With less than a week remaining in a special session designed to solve a billion-dollar budget problem, House Democrats pushed out a new state spending proposal and a package of reforms that they said could “get the ball rolling.”

Within hours, however, Senate Republicans and the conservative Democrats who currently control budget matters in that chamber tried to kick the ball off the field, calling the plan “the most minimal change possible.” They said they were ready to stay as long as needed to get reforms they want, raising the specter of a third special session since Thanksgiving.

Both sides contended they had acted in good faith and moved toward compromise, while accusing the other side of holding up progress by moving little or not at all.

“We are attempting to meet them in every possible way,” said Rep. Hans Dunshee, D-Snohomish, chairman of the House Capital Budget Committee, adding Republicans were engaging in “pseudo negotiations.”

“We have moved significantly, but we’re not going to fold our tent and go home,” said Sen. Joe Zarelli, of Ridgefield, the top Republican on the Senate Ways and Means Committee. “We’re not getting a lot of love on the things that we want.”

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, which must pass the same version or force yet another vote in the House.

Complicating matters: 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 budget 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.”

The latest proposal removes two of the most contentious issues from previous budgets. It would not delay a payment to school districts, which Democrats supported but Republicans opposed, nor would it skip a payment to state pension systems, which Republicans supported but Democrats opposed.

It would revise the way the state processes and sends sales tax to cities and counties, an accounting change that adds $238 million to the budget’s bottom line. It would make one of two changes Senate Republicans proposed to the state’s pension system to eliminate some early retirement options for state employees, but it wouldn’t make other structural changes to pensions they support.

Zarelli suggested election-year politics could be at play on the pension issue because House Democrats supported more pension changes last year. He declined, however, to assign political motives to Rob McKenna, the Republican attorney general and gubernatorial candidate, who criticized House Democratic leaders over lack of progress in the special session earlier this week.

Legislators need to close a gap of more than $1 billion in the state’s general fund, a difference between what they planned to spend on programs in the budget approved last spring and the amount of revenue the state now expects to collect as a result of a slow economy.

Reforming state policies, the size of the reserve and how to structure a budget so that it doesn’t keep falling out of balance each year – a concept known as “sustainability” – are among the big sticking points.

House Majority Leader Pat Sullivan, D-Covington, said negotiators hadn’t even been able to negotiate the budget because of Senate Republicans’ insistence on first 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.”