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OLYMPIA — Here's the budget outlook for next year's Legislature, and the state as a whole: Washington will take in a bit more tax money than lawmakers were told to expect before they passed a budget and left town in July. But the programs in that budget are costing more than expected.
That means there's a gap of about $455 million between what the state expects to collect in taxes and fees, and what it is scheduled to pay out in programs and wages.
Wednesday’s economic and revenue forecast from State Economist Steve Lerch was the standard good news/bad news of those quarterly projections.
On the plus side, more people are working and wages are rising slightly; car sales are up; housing starts and home sales also up; revenue from legal marijuana sales are continuing up. All of that should add more to state revenue than earlier projects.
But state manufacturing orders are down; the global economy is slowing; a strong dollar means exports are dropping and the Federal Reserve is expected to raise interest rates. That's going to keep revenue from growing as fast as recent months.
Adding all of that together, the state should take in $37.2 billion in taxes and fees for its 2015-17 budget cycle. It's scheduled to spend $37.5 billion, and could cover that difference from reserves. But the costs don't include the $100,000 per day fine the state Supreme Court has levied because the Legislature has not come up with a plan for improving some aspects of public school funding, or some $155 million in costs for fighting last summer’s wildfires.
Revenue isn't growing fast enough to cover costs, David Schumacher, director of the Office of Financial Management, said. “What this means, of course, is that there will be very little room for new spending in this year's supplemental budget.”
That's even before the Legislature confronts what could be a budget hit of about $1 billion to revenue from a ballot measure voters approved earlier this month. Initiative 1366 says the state sales tax will be reduced 1 cent on the dollar starting April 15 if the Legislature doesn't approve a constitutional amendment that requires future tax increases to be approved by a two-thirds majority.
Many Republicans support such an amendment, but many Democrats don't, and a constitutional amendment requires that same two-thirds majority in both chambers to go to the ballot. The initiative's constitutionality will be challenged in the courts, but no one can predict when, or how, that will come out.
Schumacher said Gov. Jay Inslee's supplemental budget, to be released in mid-December, won't assume that sales tax cut is going to happen.
Sen. Andy Hill, chairman of the Senate Ways and Means Committee, said the cut in the sales tax would create a big hole, but whether it becomes part of legislative budget proposals will depend on what happens after lawmakers return in January.
"There's a way out of that," Hill, R-Redmond, added, by passing the supermajority for taxes.
Via our Washington, D.C., correspondent, Kevin Graeler, the Perkins Loan program is ending.
The Perkins Loan program, which was used by more than 15,000 Washington students last year, expired Wednesday when reauthorization efforts failed in the Senate
It's possible it could come back later in the year, Graeler reports.
A student who received money through the loan program prior to June 30 is grandfathered in and will be eligible for a Perkins through September 2020 if they remain at the same institution.
Students who received their first Perkins Loan disbursement for the current school year before Thursday may receive money through next June.
OLYMPIA – Shortly after dawn last Wednesday, as the Senate descended into recriminations about who was reneging on their word and who was being mean to school kids, the chamber’s chief budget writer made an impassioned plea to stick with the deal. In it, truer words never were spoken.
“It’s not the way we do budgets around here,” Sen. Andy Hill, R-Redmond, said of some Senate Democrats refusal to pass a bill that was connected to a budget they’d passed, and without which the spending plan would have a $2 billion hole. A deal with things people don’t like but must vote for anyway “is standard budget practice,” he said.
Up for debate was a bill to suspend a major portion of Initiative 1351, which passed last November and requires the state shrink the number of students in classrooms. Almost from the moment ballots were counted, and certainly since legislators arrived in Olympia in January, many have acknowledged that however popular the concept may be – and make no mistake, it is – the state’s budget couldn’t do all classes from kindergarten through high school on the schedule the initiative requires.
That assumption was so common that reporters regularly asked how lawmakers could craft a spending plan and accompanying legislation that rewrote I-1351 in a way that got a two-thirds majority in a House controlled by Democrats and a Senate controlled by Republicans. The bar is so high that Senate Republicans proposed sending a new initiative to November’s ballot to repeal I-1351, which only required a simple majority, and write a budget as though it would pass.
Dumb move, said House and Senate Democrats. If voters decide to keep I-1351, the Legislature would be faced with a big bill when it returned next January.
When a budget agreement was finally reached on June 27, the 163rd day of a session devoted largely to reaching that agreement, Gov. Jay Inslee held a press conference with legislative leaders and their budget writers to announce a deal and said “the hard compromises that had to be brokered… all of those have been made.”
Among the inevitable questions was “what about 1351?” Inslee was as coy as a Southern debutante at her first cotillion in dodging this and almost every request for details: “We’ll have more to say about that in subsequent discussions.”
That discussion happened as the sun was coming up Wednesday, after a full day and night of the Senate being in session. Republicans wanted to pass the bill that made changes to I-1351 and Democrats were refusing to come up with the nine votes needed to get to that two-thirds majority unless the Senate also voted for something they wanted but had been thwarted from getting all session. That was a bill to remove some testing requirements that many considered an unfair barrier to graduation for some good high school students.
That wasn’t part of the deal, Hill, other Republicans, and even a few Democrats said. Some of the Democrats who were balking at making changes to 1351 had already voted for a budget that assumed those changes would be made.
Sen. Jim Hargrove of Hoquiam, the Democrats chief budget negotiator, pulled a much-creased piece of paper from his pocket, which he said were his caucus’s budget priorities that guided him in discussions. Changing the assessment tests isn’t on it, he said.
Not paying for all of 1351 in the budget was part of the deal, Sen. Andy Billig, D-Spokane countered. Voting yes on that particular bill was not.
Several bills aren’t on the list but are implicit in the deal, Hill said. “We know how this works. This isn’t everybody’s first rodeo.”
Therein lies the truth of the situation, and the crux of the problem with the way the Legislature budgets. The two budget committees hold hearings on their initial proposals, which give lobbyists of all stripes a chance to sit in front of panel and plead their case for a minute or two, but real negotiations are conducted in secret. It is the way budgets are done, and last week, possibly undone.
Had those negotiations been open, and the strings attached to the deal been public, no question and probably no sunrise debate.
UPDATE: OLYMPIA — Gov. Jay Inslee will sign the $38.2 billion operating budget sometime today, probably this evening, after it passed the Legislature last night.
His office had earlier scheduled the budget signing for 3:30 p.m., but later sent an update saying it had been rescheduled for "later this evening". They had delayed scheduling the formal signing until staff could read through the entire document.
Some legislators are expected to take a break from votes to attend the signing ceremony. But the Legislature has a full plate of bills to digest today, which will be the final day of the session which started back in the second week of January.
It could be a long day that stretches past midnight and into Wednesday. The House must still pass the $16.1 billion transportation budget and both chambers must pass a capital budget which won't be released until sometime late in the afternoon or early evening.
OLYMPIA — The state's $38 billion operating budget is expected to come to a vote in both chambers later today, although some details were still being worked out early in the afternoon on legislation the public and most lawmakers still haven't seen.
House Appropriations Chairman Ross Hunter, D-Medina, called the budget "a work in progress" put predicted final agreements will be reached. "We're working toward a mutually agreeable solution."
Legislative leaders and Gov. Jay Inslee announced on Saturday they had reached an agreement in principle on the budget, but negotiators continued working on the details through the weekend.
The final budget will leave members of both parties in both chambers disappointed on some points, Hunter predicted.
"We have to compromise. Unlike the other compromise, we actually do compromise," he said.
The Senate is expected to vote first on the budget. Under legislative rules, amendments can be proposed but the goal will be to have the final agreement pass both chambers as is before legislators go home for the night. That final vote could, however, be after midnight.
Legislators would then return on Tuesday for final votes on a transportation package and a capital budget before adjourning
OLYMPIA — Gov. Jay Inslee and legislative leaders say they have a deal on a two-year state budget that has staved off a partial government shutdown that would have started Wednesday.
"We'll be in business Wednesday morning," said Inslee, who was flanked by Democratic and Republican leaders of both chambers for a press conference.
He called it "a great stride forward," but Inslee and legislators refused to release many details of the deal that had eluded them for the 163 legislative days that covered a regular session and two overtime special session. Some items must still be worked out by the chairmen of the House and Senate budget committees, Inslee said.
The budget covers about $38 billion, but the precise figure isn't known and the numbers beyond the decimal point have been important in recent weeks as House Democrats had a spending plan of $38.2 billion and Senate Republicans of $37.9 billion.
It will have a reduction in tuition at state colleges and universities, but the exact amount wasn't revealed. Senate Republicans had been holding out for tuition cuts of as much as 25 percent, while House Democrats had called for a tuition freeze and said cut beyond 5 percent could play havoc with the state's Guaranteed Education Tuition program.
It invests $1.3 billion in basic education, which the state is under orders from the Supreme Court to improve, with provisions to expandr all-day kindergarten and lower class sizes in kindergarten through Grade 3. But an initiative approved by voters last year calls for reductions in all grades, and to step away from that the Legislature would have to approve any changes with a two-thirds majority.
It closes some tax exemptions or "loopholes", while extending some existing exemptions and approving some new ones. There's a net increase in revenue because of the changes to tax exemptions, but the amount wasn't revealed, nor were the particular exemptions. House Democrats had targeted 10 tax preferences in their most recent budget proposal, Senate Republicans just two. It will expand the state's ability to collect taxes from out-of-state businesses that make sales within Washington.
For months, Senate Republicans had resisted any talk of tax increases, insisting the state was expected to bring in more than $3 billion in revenue above the current two-year budget period, and that should be enough. In recent weeks, however, that had shifted to an absolute resistance to new taxes, like the capital gains tax proposed by Inslee and House Democrats. Senate Ways and Means Chairman Andy Hill, R-Redmond, said closing some tax exemptions was "something we've always talked about" provided the change didn't hurt the economy.
It has cost-of-living raises for state employees and public school workers, with "additional teacher compensation" but the amount for school workers wasn't spelled out.
It increases money for the state's mental health system, another area where the state is under court orders to make changes.
It adds money for state parks. Although the amount isn't known, Inslee made a point of saying anyone who had a reservation next weekend at a state park can rest assured the park would be open. If the budget stalemate had gone past midnight Tuesday, one of the casualties of a partial shutdown would have been state parks, which would have been closed to the public.
Asked why the public should feel confident that a deal that has details to work out can be finalized and passed by Tuesday, Inslee replied that he and the 10 legislative leaders flanking him wouldn't be making the announcement if they didn't think it would happen.
The public might not be able to see those details before Monday. House Appropriations Chairman Ross Hunter, D-Medina, said he hoped to pass the budget on the House floor Monday evening and pass it over to the Senate where it could pass before midnight.
Because Saturday was the final day of the Legislature's second overtime session, Inslee called for a third session to start Sunday at noon. Legislators are expected to be asked to vote on bills connected to parts of the budget, providing the authorization for money the budget plans to spend.
OLYMPIA — With time running out on this fiscal year, the Senate will hold hearings today on some of its latest budget plans, including one that would forestall a partial government shutdown for a month.
On the Senate Ways and Means Committee's agenda for this afternoon is the Senate Republicans' latest bargaining position on the two-year operating budget, a $38.2 billion spending plan, with some increases in pay for public school employees, increases in spending on early learning, mental health and welfare programs, and about $125 million in new revenue from closing some tax preferences
Also on the agenda is a bill that would do something similar to what Congress does when it reaches a budget impasse — keep the current budget in place for a while negotiations continue. That bill would give agencies money in July to continue current programs but not start any new ones, with a few exceptions. It would set aside an extra $1.1 billion for principle and interest on debts incurred in this budget cycle, and $14 million for emergency drought efforts.
OLYMPIA – With less than a week left in the special session and eight days before a budget stalemate could cause partial state shutdown, House Democrats released what they called a “base budget” of $37.8 billion for the next two years. It would give raises to state workers and public school employees, spend more on mental health, freeze tuition this year at state colleges and reduce the number of students in kindergarten through Grade 3, all without raising taxes.
A separate proposal would require the closing of some $356 million in tax preferences and exemptions to pay for an “investment package” of additional programs and expenses. Included in that package would be money for the new Washington State University medical school in Spokane and more medical residencies in the state.
That package also would allow for increases in early childhood education, an additional salary boost from the state for public school employees and a second year of a tuition freeze at public colleges.
House Appropriations Committee Chairman Ross Hunter, D-Medina, said Monday’s proposal was an attempt to separate the budget into areas where the House and Senate agree and areas where they don’t agree as the clock continues to tick toward the end of the fiscal year. It’s subject to change in the next several days as it moves through the committee and into the full House.
“We are somewhat closer than we were at this time a month ago,” Hunter said. “This is a move to keep our negotiations moving forward.”
The bill could be amended when it comes up for a committee vote today Tues or when it comes up for debate in the full House later this week. The last day of the second special session, called primarily to pass a budget that will pay for many state programs and salaries for the next two years, is Saturday, and a new fiscal year starts July 1.
Without a budget that passes the full Legislature and is signed by Gov. Jay Inslee by July 1, the state faces a partial shutdown of services and temporary layoffs for about half of its employees.
Monday’s proposals formally drop an effort by House Democrats to impose a capital gains tax on investors who receive more than $25,000 a year in investments. The capital gains tax was a favorite of progressives and social activists, who criticize the state’s heavy dependence on sales tax as regressive, but it became a major bone of contention in budget negotiations. Senate Republicans said the state expects to collect an extra $3 billion from its current tax system compared to the current two-year budget period, and refused to pass such a tax if it came out of the other chamber. House Democrats acknowledged last week they dropped new taxes from negotiations over the 2015-17 operating budget.
“We’re not going to make meaningful progress on that this year,” Rep. Reuven Carlyle, D-Seattle conceded at a hearing on the proposals Monday.
Senate Republicans said they would consider closing some tax preferences, if the House approved them first.
Among the proposed tax changes in the separate investment package would be levying the sales tax on bottled water, limiting sales tax exemptions for purchases by non-residents, limiting the real estate excise tax exemption on foreclosure sales and repealing preferential business and occupation tax rates for resellers of prescription drugs and royalty income. Many of those tax preferences have been targeted in the past but have survived, either by not passing the Legislature or being reinstated by voters.
The base budget would give the University of Washington some $9.5 million for additional medical students in Spokane through its WWAMI program, directing the university to add 60 new first-year students in each year of the budget.
But that money is transferred and not replaced from the budget for WSU, which plans to seek accreditation for its own medical school this year, a decision that led to UW severing ties with WSU over its Spokane program. The $2.5 million WSU has requested for the accreditation process would be dependent on the passage of the separate tax preference bill.
“This puts the WSU medical school at some risk,” Jim Hedrick, a lobbyist for the Greater Spokane Inc., told the committee.
“We would respectfully request that you reconsider,” Chris Mulick, director of state relations for WSU said.
For detail on the latest budget plan, click here.
OLYMPIA — With six days left in the second special session and after weeks of secret budget negotiations, House Democrats will release their latest budget proposal and some legislation that goes with it late this morning and hold a public hearing in the Appropriations Committee at 3 p.m.
They've also scheduled a committee vote for tomorrow, which would suggest a floor vote in the full House as early as Wednesday. Plenty of time to pass a budget before the clock runs out on the second special session at midnight Saturday.
The latest version of HB 1106 should be available online by 11:30 a.m. Until that time, you'll be looking at the version they released on June 1.
OLYMPIA – Gov. Jay Inslee and legislative leaders seemed to concur Friday that they are closing in on an agreement on the 2015-17 state budget, something that has eluded them for 155 days.
But they didn't completely agree on how close, or the components of that agreement.
In a series of press conference, Inslee and leaders of both chambers from both parties said they are optimistic an operating budget could be passed in time to avoid a partial government shutdown. That prospect exists if the state enters its new fiscal year on July 1 without authorizing spending for many programs and salaries.
“There is no reason – zero – why we can't have a budget done in one week,” Inslee said.
Both sides had moved toward a “middle ground,” he said, although he thought Democrats who control the House have made significant movements in reducing spending and dropping proposals for new taxes, including a capital gains tax on high-income residents. Republicans who control the Senate have moved somewhat less, the governor said, but enough that a “framework” is emerging in which both sides could have “big policy wins” in the final budget.
To do that, Inslee said legislators will have to agree to close some tax exemptions and come up with $300 million or so to close a gap between the levels in the rival spending plans.
House Majority Leader Pat Sullivan, of Covington, said House Democrats have agreed to take the capital gains tax off the table if the Senate Republicans agree to close some tax exemptions or “loopholes.” He wouldn't specify which ones, but added “we have a list of potential loophole closures that we're looking at.”
But Senate Ways and Means Chairman Andy Hill, R-Redmond, wasn't conceding that any exemptions definitely need to be closed. Any gap that exists might be closed by shifting money from other funds or “redeploying resources to higher priority items” – also known as spending cuts.
“There are a lot of ways to move,” Hill said.
Legislators have not yet agreed to a level of spending for the coming biennium, although they did agree they've moved closer. House Democrats finished the regular session with a budget proposal of about $38.9 billion, while Senate Republicans approved one of about $37.9 billion. After one full special session and 22 days of a second special session, House Democrats say their latest plan is about $38.2 billion, an amount proposed more than a week ago in an effort to break the stalemate; the Senate GOP proposal is just under $38 billion.
House and Senate Democrats said they have moved a lot, while Senate Republicans have moved only a little bit. Senate Republicans said their budget was built on “living within our means” while the House budget required new taxes, so the House needed to move more.
All sides expressed confidence they could settle on a final spending plan and pass it by next Saturday, the final day of the second special session. But shortly after the round-robin press conferences, signs of agreement began to fray on one of the key points of contention in the two plans, college tuition.
Senate Republicans have proposed tuition reductions as high as 25 percent for state universities. House Democrats have proposed a tuition freeze, coupled with more financial aid.
After the Republican press conference, Hill released a statement that Democrats had agreed to reduce tuition. Not true, Sullivan said in response. At the press conference, he said Democrats still have concerns about the effect the tuition reductions proposed by Republicans would have on the state's Guaranteed Education Tuition program, which allows for the purchase of future college course hours at the present rate.
OLYMPIA – As you read this, it is Day 150 of the legislative session, a deal on the 2015-17 operating budget has yet to emerge and the only thing anyone can say for sure is the 2015 session can’t go for more than another 200 days.
Because after that it will be 2016.
OK, not that funny, but it passes for a humor in Olympia, where legislative leaders meet behind closed doors with each other, the governor and a few people with intimate knowledge of the way the state raises and spends money. Reporters have been trying to divine tidbits of information about the progress of budget talks from monosyllabic answers legislators give to questions going in or out of negotiations, or the fact that they don’t answer, or their facial expressions, or the fact that they duck out a back door of the conference room so we can’t see their facial expressions. But to convince the editors that Spin Control is not spending these nice summer days paddling a kayak around the South Puget Sound, we offer some answers to common questions about the budget discussions as they stand.
That’s correct. The state has a a transportation budget, which uses gasoline taxes and other revenue connected to motor vehicles and transportation for roads, bridges and mass transit has already passed. There’s also capital budget, which it uses for large and small building projects, and a second transportation budget, that could be used for new projects if a new gasoline tax is passed. The operating budget, sometimes called the general fund, which pays for most of the other programs, projects and state salaries and benefits, is the biggest and the focus of all the negotiations. If a deal is struck on that, the others might fall into place.
Depends on who you ask, and when you ask. At the start of the year, when the governor, the Democrats who control the House and the Republicans who control the Senate each started drawing up spending plans for 2015-17, state economists estimated the state would collect about $36.3 billion in the current taxes and fees that go into the general fund. That number was up from the previous two years by about $3 billion, but the growing cost of existing programs was going to eat most of that and the state faces some big ticket items that some or all of the budgeteers wanted to add, like raises for state employees, smaller class sizes for at least some grades, and court orders to spend more money on public schools and mental health care, which had been cut back during the recession. In February and May, economists said the recovery was going so well that there would be more money and the current figure is about $36.6 billion.
The Senate Republicans have a budget with about $37.9 billion in spending, and House Democrats have one that’s about $38.4 billion.
Senate Republicans move some money out of other funds that are set aside for certain things like capital projects, liquor taxes and the state’s newest tax source, marijuana. Democrats complain, but moving money like this is a standard Olympia budget tactic to fill a gap, and both parties have done it in the past. House Democrats have proposed some tax increases or new taxes to cover the gap. Senate Republicans say they will not support new taxes and have said they won’t discuss the higher spending level unless the House passes the taxes to cover the difference. House Democrats say they have the votes to pass their taxes, but insist there’s no point as long as the Senate Republicans say they won’t pass them.
Let’s not get into unfortunate ethnic stereotypes. Let’s just say Senate Republicans may accept more “revenue” but not more “taxes”.
What’s the difference? Isn’t there a saying in Olympia that all money is green?
Let’s not get into unfortunate tinting aspersions. Supporting new taxes would be a problem for some candidates in 2016, particularly if it’s their voters being taxed. Supporting new revenue, not so much.
No. For many of them the biggest worry is housing.
Like high cost of housing in Seattle or foreclosures in some depressed counties?
No, their housing. Most legislators returned home to wait for a budget deal, and their local apartment leases ended with the regular session in April. They worry about where they’ll stay this week if a deal is struck and they have to return to the capital, where all available lodging has been booked by spectators of the U.S. Open at nearby Chambers Bay. There’s some talk of pitching tents on the Capitol grounds, or rolling out sleeping bags in the granite floors of the Rotunda, like the Occupy protesters did for several nights in 2011.
They might get temporary digs in a local university dorm, which could lead to a movie script.
“House of Cards, Olympia Edition”?
Or “Animal House 2 – the Geezer Version.”
OLYMPIA — The House Appropriations Committee has a hearing today on the Democrats' latest budget proposal.
Democrats are making a point of contrasting their budget "rollout" with that of Senate Republicans last week, which was released publicly and moved through that chamber's budget committee in a matter of hours.
The new House budget was released publicly on Monday — well, most of it, because there is some question about whether there will be changes in the amount set aside for public school employee health benefits — and set for hearing today. The hearing room filled to overflowing today and those who have something to say, either for or against, are limited to 1 minute.
The Approps Committee is expected to vote on the proposal on Wednesday.
OLYMPIA — House Democrats unveiled their latest budget proposal, a $38.4 million plan with lower spending and fewer taxes than a bill they passed earlier this year. It's an effort to move toward the center in the current budget standoff.
Described by House Majority Leader Pat Sullivan as "a substantial compromise", it would require a capital gains tax on upper income investors, but no increase in the business and occupation tax.
The chief budget negotiator for Senate Republicans said it comes down on spending but "they're still depending on taxes. We think taxes are unnecessary."
House Democrats counter that the Senate's $37.9 billion plan relies on accounting tricks that make it unsustainable and a gamble on sending one major change to voters in November. If voters say no, that's a $2 billion hole they'll have to fix late this year or early next.
The House plan has more for teachers' salaries and health care benefits. It does not cut tuition at the state's colleges and universities by 25 percent as Republicans propose, but it does freeze tuition and spend more on student aid.
In a press conference this afternoon, House budget chairman Ross Hunter laid out a schedule in which they could reach an agreement by June 12, although Sullivan called that scenario "very aggressive."
Monday: Budget negotiators from both houses and the governor’s office will meet at 10 a.m. for the first of what Inslee has said will be daily meetings to get a budget deal. House Democrats will unveil their latest budget proposal at 1 p.m.
Tuesday: House Appropriations Committee will hold a hearing on the latest House budget proposal. They might mention that Senate Republicans unveiled and held a committee vote on their budget proposal last week, shortly after it was released to the public and without a public hearing.
During one of the special session’s rare committee hearings, Senate Ways and Means Chairman Andy Hill zeroed in last week on what Republicans contend is a problem with the way state employee contracts are negotiated between union officials and the governor’s office. And danced close to saying flat out the governor was in the pocket of the unions.
“Can employee unions make contributions to political campaigns?” he asked John Lane, who was representing the Office of Management and Budget. This was presumably a rhetorical question because Hill received money from the Service Employees International Union 775, which represents home health care workers, in last year’s re-election campaign. His next question, also rhetorical: “Employee unions can spend, literally, millions on a governor’s race, correct?
“They literally can make contributions to help someone get elected – which is fine – but then the same person who may have received those contributions is then behind a closed door, negotiating for wage increases…Isn’t that one reason why we might want to make these more transparent?”
Lane responded that he thought the current process is very transparent because all the documents are available after the deal is done and the Legislature has hearings and gets to vote on it. They can reject the deal and send the sides back to the table.
Hill wasn’t buying it but eventually took a step back, saying he thought everything was on the “up and up” but the voters may have concerns because, you know, politicians don’t have that good of a rep. “It’s just one of these trust but verify things.”
Despite ending on a less confrontational, Reaganesque note, the exchange did not sit well with the SEIU, which may be regretting the $1,700 it gave to Hill instead of his Democratic challenger. The union is “very disappointed” Hill implied there is something corrupt about union contributions, Adam Glickman, its secretary-treasurer, said: “We don’t hear similar concerns about contributions from large corporations that are seeking millions or billions of dollars in tax exemptions.”
Passing the bill to open up state worker contract talks is a GOP condition for keeping the negotiated raises in the budget, Hill said later in the week. But that could become a slippery slope: If legislators want to open up contract talks because they have a major effect on the budget, they might have extend that reasoning to their own closed-door budget meetings. Some reasons for keeping those closed – like participants talking more freely outside the public eye – are the same. So is the excuse that the public eventually sees the end product when a budget gets a committee hearing or a vote.
OLYMPIA – The Legislature will go into double-overtime in an effort to reach a deal on how to spend some $38 billion on state programs, agencies and salaries over the next two years.
On Thursday, the last day of a special session called primarily to reach a budget deal, Senate Republicans released their latest spending proposal, the first they’ve made public since April, passed it out of committee without a hearing and sent it to the Senate.
House Democrats said they will study and counter with a proposal to be released Monday, and hold a hearing Tuesday after the public has had a chance to study it.
Monday will be Day 4 of the second special session, which Gov. Jay Inslee said Thursday to start at 9 a.m. today. He commended Senate Republicans for moving toward the middle on some spending issues, but said they need to move off their no-new-taxes stance, and was looking forward to seeing the Democratic counter.
“The most important thing now is to help people find a middle ground,” he said at an afternoon press conference which announced the long-expected second special session.
After House Democrats release their proposal Monday, he’ll have all budget leaders in his conference room at 10 a.m. to start daily budget negotiations. Asked why he didn’t require such meetings when the first special session started 30 days ago, Inslee replied the sides were too far apart then. Now, they are “in a place where we can see success.”
But taxes could still be a sticking point.
Neither Inslee nor Democratic leaders would say how much more revenue – generally speaking higher taxes or fees – would be needed to cover programs they want to add or accounting “gimmicks” they want removed from the Senate GOP proposal. Nor would they name a preferred tax system.
“We can’t be Pollyanna-ish and think we can do this with twinkle dust,” Inslee said.
Senate Ways and Means Committee Chairman Andy Hill, R-Redmond, said Democrats need to reduce their spending requests. The need to raise taxes “went out the window” with a new forecast last week that estimates the state will collect an extra $400 million in revenue over the next two years and any argument to the contrary is just “taxes for the sake of taxes,” he said.
“That's just silly,” House Majority Leader Pat Sullivan, D-Covington, responded a few minutes later. The Senate GOP budget still relies on shifting money out of other accounts, special one-time expenditures and unspecified reductions in certain programs, he said. Finding new sources of revenue is a better option.
The Legislature did have one budget success before adjourning Thursday. They approved a plan to spend some $5 billion the state will collect in existing transportation taxes and fees for the next two years. It includes money for A more difficult decision that would require them to raise gasoline taxes by 11.7 cents for new transportation projects might be made in the second special session.
OLYMPIA — On the last day of the first special session and the eve of a second special session, Senate Republicans released their latest proposal for a 2015-17 operating budget that increases spending on salaries, health care and tuition. It meets many of the Democrats' requirements without raising taxes, the GOP budget leader Andy Hill said.
The need for raising taxes "went out the window" with a new forecast that estimates the state will collect an extra $400 million in revenue over the next two years, Hill, R-Redmond, said. Any argument to the contrary is just taxes for the sake of taxes, he said.
"That's just silly," House Majority Leader Pat Sullivan, D-Covington, responded a few minutes later. The Senate GOP budget still relies on "gimmicks" like shifting money out of other accounts, special one-time expenditures and unspecified reductions in certain programs, and finding new sources of revenue is a better option, Sullivan said.
The Senate GOP budget, dubbed Budget 2.0 because it is the second one released to the public, moves toward House Democrats' position on certain points. It segregates money from marijuana taxes for programs the voters approved with Initiative 502 rather than funneling it directly into the general fund, as well as sending $12 million of it to local governments to help deal with the effects of marijuana legalization. It pays for cost-of-living increases negotiated in contract talks between the state employees unions and the governor's office, under the condition the Legislature passes a law to open future contract talks to legislators and the public.
Sullivan said that condition might meet with resistance in the House, although there may be a way to provide more coordination between the governor's office and the Legislature during contract talks. Senate Republicans weren't concerned about opening up contract talks during the recession when unions were making concessions, he added.
Republicans have also proposed adding nearly $100 million in the higher education budget to move up the pace of their planned tuition reductions at the state's public colleges. Their first budget would have cut tuition by 25 percent over two years; this plan cuts it that amount in the first year of the budget and provides extra money for state need grant recipients attending private schools.
Among the other shifts in the budget is an increase in spending for medical education in Spokane. The University of Washington would get $9 million for its WWAMI program, requiring it to have 60 first year medical students and 20 second year students next year, and 60 more first-year students in 2017. Washington State University would still get the $2.5 million proposed to seek accreditation for its proposed medical school.
The budget proposal, which was released to the public about 11 a.m., will get a hearing — and a possible vote — in Senate Ways and Means Committee meeting that starts at 1:30 p.m. The first special session ends today, and Gov. Jay Inslee is expected to call a second special session to start Friday; the budget could come up for a vote in the full Senate early in that second session.
OLYMPIA – Legislators reached a key milestone in the special session over the budgets, but unfortunately it was not the milestone of having a negotiated agreement that would allow them to finish their work by May 28, the 30th and final day of the session.
No, it was the milestone at which they offer tantalizing tidbits about each other’s proposals, but decline to go into specifics because “we don’t negotiate in the media.”
This is a mantra regularly employed by legislators who are, in fact, negotiating in the media by accusing the other side of profligate overspending or unrepentant chintziness, accounting sleights of hand or general fecklessness. House Democratic leaders or Senate Republican leaders have accused each other of one or more of these at some point in recent weeks during a session that could thus far only be described as “special” by constitutional edict or ironic exultation from the Church Lady.
Senate Republican leaders went a step further in their castigations at a press conference last week, bemoaning what they described as a paucity of serious offers from the other side. Sen. John Braun, the vice chairman of the Ways and Means Committee, said while his side has made “two significant offers” – one during the regular session and one in the special – House Democrats had only made one and it would spend more than the budget they had passed in the regular session rather than less.
“We can’t keep making offers if they’re not willing to make offers in the other direction,” Braun said. Two weeks into the special session, they weren’t actually negotiating a budget, he explained; they were reviewing the two spending plans section-by-section to understand each others’ assumptions. That’s all they could do until House Democrats either passed the tax increases needed to make their budget balance, or cut that money out of their spending plan, he insisted.
Two days later, House Democrats, flatly rejected a couple of Braun’s characterizations. Senate Republicans hadn’t made two offers, they made the same offer twice, House Majority Leader Pat Sullivan said. And the House counter offer didn’t raise spending, it reduced it.
He declined to say which concessions they made, or by how much because “We’re not going to negotiate the budget in public.” But they were going to send over another offer later in the day.
Sullivan agreed they weren’t negotiating, even in private, just going through the budgets section by section. He put the onus for that dilatory activity squarely on Republicans, whom he accused of stalling until Monday when state economists issue the next estimate of tax revenue for the coming years in hopes that it is up.
Although budgets are complicated, whether the Republicans made two different offers or just one, or the Democrats offer raised or lowered spending, wouldn’t take an accountant, just a perusal of paperwork. Senate Democratic Leader Sharon Nelson, who participated in the press conference, suggested the media ask the Republicans for their offers; the media suggested House Democrats release them, since they had them.
No, said Sullivan, but if Republicans release offers they had made, Democrats would do likewise.
That provided a brief glimmer of hope for an otherwise hopeless task of giving the public a look at what – if anything – is going on with the budget. Senate Republicans, after all, are big fans of opening up one of the driving factors of the budget, contract talks between state employees’ unions and the governor’s office. Perhaps they’d like to show how a little sunlight is a good thing for negotiations.
But Sullivan’s suggestion got no support from Senate Majority Leader Mark Schoesler. When told there were significant discrepancies between the way the two sides were describing their respective offers, he preferred to to trust Braun and budget chairman Andy Hill that the Democrats’ counter raised spending rather than lowering it. The “we’ll show you ours if they show you theirs” proposal was no more sincere than passing a budget without passing the necessary taxes, he insisted.
Legislators will, instead, continue grinding their way through the process, he said.
At this rate, they’ll likely grind far into June, in a second special session.
UPDATE: Sheriff Ozzie Knezovich responded to Commissioner Shelly O'Quinn's criticism by questioning why the County Commission has not held public budget hearings in recent years to address the needs of individual departments.
"Perhaps if they had budget meetings like we use to we could have face to face discussions before they set budgets," Knezovich wrote in an email, responding to the original blog post. "They have not had budget hearings in 3 years."
Knezovich said he and his staff informed commissioners at a meeting in August they would be underfunded in 2015 by about $1 million. He disputes claims that the issue was sprung on commissioners in January.
"It is disingenuous for O’Quinn to then say that we just popped over in January and surprised them with this news," Knezovich wrote.
The original blog post follows.
ORIGINAL POST: Sheriff Ozzie Knezovich is continuing his pleas for funding from County Commissioners to save a drug task force targeting mid- to high -level trafficking.
"I lose my entire narcotics operation," Knezovich told commissioners Al French and Shelly O'Quinn on Tuesday. Lt. John Knowles earlier told commissioners without more money from county coffers, the Spokane Regional Drug Task Force would run out of money in October.
Tuesday's presentation followed a similar plea from Knezovich in October, and a news conference in January during which the sheriff said the task force would be insolvent by June. Knowles said the task force had moved some money and employees around, giving them a reprieve for several months, but declining grant dollars and money seized from drug raids have imperiled the task force for many years.
"If we can get Spokane County and the City of Spokane Valley, with just salary and benefits 100 percent, we can maintain" adequate funding reserves, Knowles said. That price tag would be about $370,000 annually, he added.
Commissioner Shelly O'Quinn said she was hesitant to approve that money because the sheriff is also asking for an additional $1 million to pay overtime to deputies who are filling shifts for about 16 vacant positions with the Spokane County Sheriff's Office. Knowles said the office was having difficulty attracting high-quality candidates with a background in law enforcement because of character issues.
"When the sheriff comes in three weeks into the new year and says he needs an extra million dollars, and we're only three weeks into the budget, it's just - there's credibility issues there," O'Quinn said.
Knezovich reiterated that he'd go before voters and campaign for a two-tenths of a cent sales tax increase to pay for public safety services. The sheriff estimates that would bring in about $9 million annually.
After a spate of generosity at the polls, Spokane voters turned down a three-tenths sales tax increase to pay for transportation services at the ballot box last week but did approve an extension of a one-tenth sales tax for juvenile detention services.
Commissioners took no action on Knezovich's request Tuesday.
OLYMPIA — Budget negotiations between House Democrats and Senate Republicans are currently kaput, with each side pointing the finger at the other for who is responsible.
Senate Republicans say they wanted the House to put its proposals for a new capital gains tax and some increases in the business and occupation tax to a vote, to prove they would support some $1.3 billion in extra revenue their 2015-17 operating budget would need. Without the extra money, Senate Republicans would be "negotiating against ourselves," Ways and Means Committee Chairman Andy Hill said.
House Democrats insist they have the votes for those taxes, but see no reason to pass legislation that Senate Republicans have said they won't pass in that chamber so the two sides should just dig in to the details and see what sort of agreements they can reach. House Democratic Leader Pat Sullivan said they even proposed a schedule of topics from discussion, but Senate Republicans weren't interested.
So negotiations ended without really getting started Wednesday, and showed no signs Thursday of resuming any time soon, with the clock ticking toward April 26, which by law is the last day of the regular session.
Republicans accused Democrats of deliberately stalling in hopes of getting to a special session, where they would have an advantage. What advantage? Well, more Republicans live farther away from Olympia than Democrats, so calling legislators back is more of a burden on Republicans, they said. If a budget deal isn't reached by June 30, many state agencies would have to cut back or shut down because they wouldn't have any legal authority to spend money to do their work.
And Republicans traditionally get blamed for that, Hill said. "There is a belief that if you shut down the government, it disadvantages Republicans.
OLYMPIA — House and Senate Republicans were confident Tuesday that voters would agree to trim down requirements to reduce class sizes in public schools, as approved yesterday in a bill connected to the Senate budget.
Survey results released Tuesday by The Elway Poll said the concept of across-the-board reductions remain popular. The company asked some 500 voters around the state if they would support what seems to be the Legislature's preferred alternative — limiting reductions to kindergarten through Grade 3, rather than making them in all grades — and more than half said the Legislature should find a way to reduce all class sizes.
If the Legislature asks the voters to choose between a tax increase to pay for system-wide class-size reductions or limiting the reductions to K-3, respondents were split: 48 percent said they'd likely or certainly vote no on a tax increase while 43 percent said they'd likely or certainly vote yes.
A major theme of both parties in both chambers this year has been that the state cannot fully implement Initiative 1351, which voters approved last November, without a tax increase. There's general agreement on trying to limit the reductions to K-3, which supporters say research shows is the most effective for helping struggling students. There's no specific agreement, however, on how to do that.
Changing an initiative in the first two years after voters approve it requires a two-thirds majority in both houses under most circumstances. But asking voters to approve such a change through a referendum only requires a simple majority, and the predominantly Republican Senate majority passed and sent to the House a bill that would do that on Monday.
Minority Democrats in the Senate all voted no, but on Republicans essentially challenged House Democrats to come up with a better plan.
"The House hasn't passed anything related to 1351," Senate Majority Leader Mark Schoesler said Tuesday at the weekly GOP press conference. "Show us your plan in the House. Is it a two-thirds vote?"
Schoesler discounted poll results so far before a possible election, noting that I-1351 had a large margin in the polls months before the election but passed with only about 51 percent of the vote. The results might have been different if voters had more information about the total cost or the opposition from state leaders, he added.
Pollster H. Stuart Elway noted that the lead for I-1351 evaporated last year as opponents hammered on the cost. "This smaller lead might be vulnerable once real dollars are attached," he said.
Smaller class sizes are popular but the public is divided on costs, he added. (Editor's note: An earlier version of this post misidentified H. Stuart Elway.)
OLYMPIA – Washington could be asked this fall whether they really want smaller class sizes in all public schools like they approved last November, or if they’d settle for just dropping numbers in kindergarten and the primary grades.
In an effort to construct a budget that doesn’t require a tax increase, Majority Republicans in the Senate proposed shrinking the number of students in kindergarten through Grade 3 to 17, as an initiative approved last year requires, but leaving larger numbers in Grade 4 and up. It would require fewer teachers, principals and support staff than needed to comply with I-1351 – and save the state billions of dollars, supporters said.
By making the changes in legislation that has a referendum clause that requires voter approval, the plan would also allow the Legislature to changes I-1351 with a simple majority, rather than the two-thirds majority usually required to amend an initiative within two years of its passage.
But it’s also a “high-stakes” gamble, Sen. Jim Hargrove, D-Hoquiam, said. If voters reject the referendum, legislators will have an immediate hole of $2 billion in the state’s operating budget.
I-1351 didn’t specify how the state would pay for smaller class sizes, and the referendum is just a way of going back to voters and asking them to support it if they know the cost and agree with it, Sen. Don Benton, R-Vancouver, said. “Yes, we’re going to be in a tough spot (if the referendum fails). We’ve been in tough spots before.”
Eliminating the class reductions for Grade 4 and up is like telling those students “you don’t matter” and the referendum is telling voters “we don’t like what you did,” Sen. Marko Liias, D-Lynnwood, said.
But concentrating on the youngest grades, where research shows small class sizes have the greatest impact, would show the Legislature believes the issue is important and “we’re making strides towards getting there,” Sen. Brian Dansel, R-Republic, said.
The bill passed 27-22, picking up only one minority Democrat, and was sent to the House, before the Senate turned to the $38 billion operating budget to which it is linked. That allowed both parties to reprise, in shortened form, their nine-hour debate from last Thursday night and Friday morning on the two-year spending plan that would cut college tuition and put some $1.3 billion toward public schools without raising taxes.
Cutting tuition amounts to a middle-class tax cut, Sen. Mike Baumgartner, R-Spokane, said. “No one nationally has done this.”
But Democrats said it has hidden costs, relies on shifting marijuana taxes and the approval of the class-size referendum was “a house of cards.” Several Republicans also signaled they wouldn’t vote for a final budget that rejected raises for state employees that have already been negotiated or cuts to social services like Temporary Assistance to Needy Families, which are part of this plan. But all members of the Majority Coalition, which consists of all 25 Republicans and Democrat Tim Sheldon of Potlatch, voted yes and all other Democrats voted no, producing the same split that existed on most amendments that failed in the protracted debate last week.
That vote means the budget process moves into the next phase, in which budget leaders try to negotiate a final bill that will pass both chambers .
House Democrats passed a much different budget last week that would require a capital gains tax and some other tax changes, but those taxes haven’t been put to a committee vote yet. Senate Majority Leader Mark Schoesler, R-Ritzville, said the plan that passed Monday is in a stronger position because the additional legislation it needs also has passed the Senate.
OLYMPIA — In a counter to House Democrats, Senate Republicans released a budget that cuts college tuition, sends an extra $1.2 billion to public schools and has no general tax increase.
The $38 billion spending plan has less money than the Democratic proposal for raises for teachers and state employees, less for early learning programs and more for health care programs.
Almost half of the budget would be spent on public schools, Ways and Means Committee Chairman Andy Hill said. It would have the first tuition cut since the 1970s, which represents a tax cut for middle-class families, he said.
It calls for the Legislature to reject contracts negotiated between the governor's office and the state employees' unions but give each worker a $1,000 raise in each year of the two-year budget cycle.
That gives a larger percentage increase to lower-paid workers, Hill said. Teachers and other school employees would get a cost-of-living increase that was approved by Initiative 732.
It would also ask voters to agree with changes to a class-size reduction law voters passed last year for public schools in kindergarten through Grade 12. The state would spend $350 million to reduce class sizes in kindergarten through Grade 3, but delay any further reductions. Research shows that the greatest impact on smaller classes is in those lower grades, Hill said.
The budget would contain a referendum clause asking voters to agree in November.
The Republican budget also would move some $300 million in tax revenue from legal sales of marijuana into the general operating budget, but research and drug prevention programs would be paid through that budget.
Washington State University would get $2.5 million to seek accreditation for a new medical school in Spokane, and the University of Washington would get $2.5 million to operate WWAMI in Spokane. But WSU would continue to offer services and operations to UW in Spokane "under the same conditions and limitations that existed prior to the dissolution of their WWAMI partnership."
House Democrats also gave WSU the $2.5 million the school estimates it will need to gain accreditation for the new school, but gave the two universities more money to increase the number of WWAMI students in Spokane and cover the costs of services and operations that WSU received over the years before UW cancelled the partnership.
OLYMPIA — The Senate Republican budget proposal will be released at noon, and have a hearing at 3:30 p.m. today, making for a quick turnaround on two counts.
One, House Democrats just released their budget on Friday, and had a hearing on it Monday. The Appropriations Committee is expected to vote on it today. So Senate Republicans are countering quickly with a budget that's expected to be smaller than the $38.8 billion plan in the House, and may have no new taxes.
Two, very few people will be able to study the several hundred pages of the budget before the hearing in the three and a half hours between release and hearing. Notice of the addition to the committee's schedule wasn't posted until Monday evening.
Jason Mercier, legislative watchdog and budget hawk for the Washington Policy Center, called that scheduling "unacceptable" in an e-mail with the subject line "budget transparency hopes dashed."
House Democrats had a slightly slower turnaround on their budget, with a Saturday hearing after the Friday roll out, but changed the hearing to Monday after some complaints.
But then, it is Day 79, which means only 26 days remain in the regular session.
OLYMPIA — House Democrats said today they will release their 2015-17 operating budget proposal late Friday morning, slightly more than two-thirds of the way into the regular session.
House and Senate Republicans responded by reiterating the "show me the money" they've made before. If the expenses in the budget proposal are greater than the projected revenue coming in, they want to see legislation on higher taxes or fees to cover it.
House Appropriations Chairman Ross Hunter and Finance Chairman Reuven Carlyle are scheduled to unveil the budget at 11:30 a.m. Friday, which would be the 75th day of the 105-day legislative session. The budget would then be subject to hearings in the Appropriations Committee before a vote in the full House could send it to the Senate.
Senate Majority Leader Mark Schoesler, R-Ritzville, said the Senate will follow with its own budget proposal "shortly", although if the House budget proposal doesn't have all the revenue needed for the programs and other expenses it is seeking, "that makes it very hard to take serious."
Gov. Jay Inslee and House Democrats have said the projected revenue for the coming two years will not be enough to cover existing programs plus raises for teachers and state workers, and the expansion of public schools and the mental health system required by court orders. But they differ on what existing taxes to raise, new ones to impose and which tax breaks to close.
Republicans have insisted the extra revenue coming in because of the economic recovery is enough. "I still believe we can do this without new taxes," Schoesler said.
Inslee will unveil the details of his budget plans for the second half of his term over four days next week. But in a discussion Tuesday with reporters, State Budget Director David Schumacher said without some new taxes the cuts to state programs would be “horrible.”
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OLYMPIA – Someone please give Senate Republican budget writers a new metaphor for hyperbolic parsimony.
Looking at the state’s less than cheery prospects of matching income to outgo last week, the chief GOP Senate budgeteer deployed the well-worn image of personal thriftiness, the squeezed toothpaste tube.
“I’m the kind of guy who, with toothpaste, I squeeze the tube as empty as I can get it and then I cut it open and scrape out the rest and then I buy a new tube,” Sen. Andy Hill, R-Redmond said. “That’s the way I approach budgeting this year" . . .
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Inslee signed the state’s supplemental operating budget, vetoing some elements such as a section that would have ended the Life Sciences Discovery Fund.
Overall, he called it a budget with “modest adjustments” in many programs and disappointing on education.
“It does not make sufficient progress on the state’s paramount duty to schools,” he said.
Legislators are also disappointed, but more with Inslee’s characterization of their final work product that passed the Senate 48-1 and the House 85-13. Sen. John Braun, R-Centralia, said the spending plan, as a supplement to last year’s two-year budget that added almost $1 billion to public schools, was supposed to make modest adjustments.
But it keeps the state in the black, financially, through this fiscal period and the next, Braun said.
“There were a lot of tough decisions that had to be made,” he said… .
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