Both sides win issues in hard fought state budget

OLYMPIA – For almost 91 days the Legislature wrestled with a looming budget problem. For the first 90, it was even odds, at best, whether the Legislature would win.

The final solution for the beleaguered operating budget – which included side deals on a separate capital construction budget as well as changes to state pensions, long-term budgeting and public school employee health care systems – evolved over the course of a 60-day regular session and a 30-day special session.

Most legislators didn’t even see the 280-page operating budget on which they would vote until about 12:20 a.m. Wednesday, about 20 minutes after Gov. Chris Gregoire told them to pull the equivalent of an all-nighter and not leave the Capitol until all the connected pieces had passed.

Even Spokane legislators who voted against that budget as dawn was breaking said it was better than some other versions. Rep. Kevin Parker, R-Spokane, who like most House Republicans voted no, said he has concerns about the low reserves and the way some accounting maneuvers allow the state to count money that he describes as “not hard dollars.” But the final budget does not have drastic cuts to public schools and state colleges, and the debate forced through other reforms, he said.

Senate Majority Leader Lisa Brown, D-Spokane, who was in the middle of negotiations among the parties, the two chambers and Gregoire, contends the final budget is significantly better than the governor’s initial proposal and the earlier budget that cleared the Senate with all Republicans and three Democrats. Not only does it preserve public school and college programs, she said, it saves many social service and health programs critical to the state in general and Spokane in particular.

Her central Spokane district, one of the state’s poorest, has a high percentage of residents with disabilities, those who use state health care programs for treatment at community clinics, or rely on child care assistance as they work their way back from unemployment to family sustaining jobs.

“It’s disappointing that it took the extra special session to get there,” she said. But the final result was, in the Senate anyway, a budget with strong support from both parties.

Sen. Mike Baumgartner, R-Spokane, who also voted for the budget, called it “a productive session given the circumstances.”

“We ended up with a better operating budget, and good but not great reforms,” Baumgartner said.

The two-year $31.6 billion operating budget had a projected gap of as much as $1.4 billion when the regular session started in January. Gregoire had proposed some draconian cuts to public schools, state colleges, the Department of Corrections, state medical programs like Basic Health and the Disability Lifeline, and the Department of Social and Health Services. She proposed asking voters for a temporary increase in the state sales tax to “buy back” some of those services, particularly for education. She also said the state should have a reserve of at least $600 million, to guard against future economic downturns.

The sales tax increase was unpopular from the start and the Legislature never seriously considered it. All four caucuses crafted complete budgets, which was unusual. House Democrats passed one budget; Senate Republicans, with three breakaway Democrats, substituted their spending plan and sent it back to the House, where it was swapped again at the end of the regular session for a plan very close to a Democratic plan that was a vote shy in the Senate. The next full budget didn’t surface until early Wednesday morning. Here are some changes in key programs as the operating budget evolved:

• Public schools : Gregoire proposed cutting four days off the 2012-13 school year to save about $80 million and revising the levy equalization formula to cut another $152 million. Neither was popular with schools or legislators, and they were eventually dropped. The Senate Republican budget also dropped her proposed shift of $340 million to school districts at the end of June 2013, but cut $18 million in bonuses for teachers and $8.3 million in Running Start, plus dropout prevention. The final regular session House budget added some money for school programs, but kept the accounting shift. The ultimate budget has no accounting shift and adds about $12 million in school programs.

• Colleges: Faced a cut of about $170 million in the Gregoire proposal. That was down to about $30 million in the Senate Republican budget, mostly by reduced tuition waivers. The final House budget was down about $15 million, but the ultimate budget has a slight increase of $3.5 million for college programs.

• Disability Lifeline: Both Gregoire and Senate Republicans eliminated the medical care portion of this program, which is about $41 million. The final House plan kept the program, as did the ultimate budget solution.

• Basic Health: Gregoire proposed eliminating this program, which provides health care to some low-income residents, to save about $44.5 million. The other three budgets kept the program.

• Social programs: The budgets had different changes to programs within the Department of Social and Health Services, such as subsidized child care, food assistance and Temporary Assistance for Needy Families. Gregoire proposed the most cuts, at about $338 million, while the Senate Republicans dropped that to $311 million, the final House budget of the regular session was down $186 million and the ultimate budget solution is down $177 million.

One big difference among budgets is money left in reserve. The $601 million that Gregoire had described as barely enough was down to $501 million in the Senate Republicans’ budget, $350 million in the final House budget and about $320 million in the ultimate budget.

That’s “a bit of a risk,” Brown acknowledged, but the economic forecast in February showed improvement and the danger of sinking into the red again decreases as the two-year budget cycle progresses. “I’ve seen the Legislature leave town with a lot less,” she added.