Gregoire suggests small step first

OLYMPIA – With most legislators still at home, their leaders met Tuesday with Gov. Chris Gregoire in search of a solution to the state’s budget problems.

The four legislative leaders reached no agreements on a key sticking point.

Gregoire told them to set that aside and come up with a way to shore up at least $200 million of the $1.5 billion budget gap that members of both parties, in both houses, might accept.

Senate Majority Leader Lisa Brown of Spokane said the goal before the next meeting, as yet unscheduled, is to find that money through some source of revenue, “something that’s not spending cuts.”

The hang-up right now is what the two parties want to say is available to spend on state programs. Democrats want to delay a payment of some $330 million to the state’s school districts by a few days, shifting it from the end of June to the beginning of July in 2013, which means it happens in the state’s next fiscal biennium.

Because schools operate on a different calendar, they’d get the money in the same fiscal year, so Democrats argue it’s merely an accounting shift with no real consequence.

Republicans, however, say that’s bad budgeting, and even worse accounting, that shifts the debt into the next biennium. They want to skip a payment to some state pension plans, then make several reforms to the way pensions are structured. They admit skipping a pension payment isn’t a good practice but contend the long-term savings are worth the $150 million the skipped payment would leave in the budget.

Democrats say that plan isn’t actuarially sound and the savings might not be all Republicans estimate them to be.

Gregoire told leaders to come up with a plan that makes the payment to schools and the pension payments, but finds some other way to improve the budget’s bottom line by about $200 million.

Once they decide on the amount to spend, budget writers will start working on how to divide that among programs. A budget written by Senate Republicans differs from one passed by House Democrats on a wide range of education, college and social programs, and those will still have to be negotiated to cover much of the gap between projected revenues and scheduled expenses.

“It could potentially result in more cuts,” Brown said. “That’s what moving to the middle’s all about.”