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Gregoire reading fine print

But governor says GOP reforms are veto proof

Gov. Chris Gregoire explains on Thursday how the budget the Legislature passed came together. (Jim Camden)
Gov. Chris Gregoire explains on Thursday how the budget the Legislature passed came together. (Jim Camden)

OLYMPIA – Some state spending that legislators approved shortly before dawn Wednesday as part of a package deal to end the session may not survive the veto pen.

Gov. Chris Gregoire said she would sign the major reforms included in a negotiated package of legislation that came together in the closing days of one special session and needed a few hours of yet another special session to pass a bleary-eyed Legislature.

But legislators stuck special projects into the supplemental budget “at a fevered pitch” in the final discussions, she said, and she’s having staff comb through the 280-page document.

“I didn’t agree to every dotted ‘i’ and crossed ‘t’ in that budget,” she said. “I’m sure there are things in there that I will veto. I want more in the ending fund balance.”

In her budget proposal, Gregoire had called for an ending fund balance of about $600 million. The budget passed Wednesday morning has a balance of just over half that, about $320 million. She couldn’t estimate how much she might cut to bring the ending fund balance to what she had originally proposed, but said there’s no way to trim $300 million.

The reforms that Republicans wanted in return for a vote on the budget, however, were carefully studied and will be signed, she said. Those include:

• A change to the early retirement system for new state employees. Any new employee who retires before age 65 after 30 years in state service faces a reduction of 5 percent for each year under 65. A 2000 law allows existing workers a 3 percent per year reduction between 65 and 55, and a 2007 law allows for full benefits at 62.

• A review of the public school employees’ health insurance systems, which vary from district to district, and incentives for the districts to offer plans in line with those available to state employees, including those with high deductibles and health savings accounts. A key element encourages districts to offer plans in which family insurance premiums are no more than three times the cost of an individual’s plan.

• Requirements that the Legislature adopt a four-year budget plan, rather than the current two-year plan so that scheduled expenses won’t exceed projected revenues over that period. The law adds the state treasurer to the Economic and Revenue Forecast Council, which produces the revenue outlook that guides legislative budgeting.

Those reforms were key to Republicans and some conservative Democrats voting for the budget. For weeks, Republicans demanded reforms before they’d consider any decision on taxes or vote on the budget. Democrats wanted a commitment on searching for more revenue, particularly the closure of a tax exemption for first mortgages written by large, multistate banks. The stalemate that developed near the end of the regular session carried over into the special session. Last weekend, Gregoire and her staff put together a package that included all elements and began working with legislative leaders and budget experts on a way to make that work.

In the end, Democrats got a budget very close to what they had proposed in the Senate, but couldn’t pass because three of their members lined up with the 22 Republicans to pass a different spending plan. The final budget had no cuts to public schools or state colleges and saved the Disability Lifeline and the Basic Health plan. Republicans got the reforms they said were needed to make the budget sustainable.

Sen. Linda Evans Parlette, R-Wenatchee, who represented GOP Senate leadership in the negotiations, agreed with Gregoire’s assessments on negotiations and the final package.

“I think it was a package deal. The governor is exactly right: We’re all tired of cuts,” Parlette said.

But Gregoire’s comments that she’d have staff go through the final budget for things added at the last minute struck one government watchdog as odd. Jason Mercier of the Washington Policy Center questioned why it was acceptable for the governor to say she didn’t have enough time to review the final product; legislators had to vote on it without having time to study it, he noted, and the public never saw the final product before it was passed into law.

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