Senate budget-writer Andy Hill is surrounded by well-wishers in the moments after the budget bill passed the Senate Friday.
OLYMPIA, June 29.—Just in time to avert a shutdown of state government that loomed on Monday, the Washington Legislature said yes by a wide margin to a $33.6 billion budget deal – and for all the fighting that has preoccupied the statehouse for the last six months, both sides pronounced themselves satisfied in a most bipartisan way.
The broad strokes: No big new taxes, just a couple of small ones. A $1 billion down payment on the big new K-12 spending mandated by the state Supreme Court. No tuition increase at the state’s colleges and universities. The budget seals the deal regarding the state’s participation in federal health care reform, committing the state to an expansion of Medicaid programs and relying on a federal promise to continue funding in the future. And yet the bill reflects a fiscal conservatism forged in the byplay between the largely Republican Majority Coalition in the Senate and the less tax-averse Democratic majority in the state House. In the end, after all the shouting, the budget agreement might be said to reflect some of that two-sidedness that was promised amid the takeover of the Senate at the start of this year’s session.
Passed by the House and Senate just hours after it was released on a state-government website, the phone-book-sized budget bill will be read by at least one person before his vote. Gov. Jay Inslee is promising to go through all 482 pages before offering his signature sometime this weekend.
State Sen. Jim Hargrove, D-Hoquiam, lead negotiator for the Senate Democrats.
Perhaps because not a soul, save those who had a hand in its writing, could possibly have read the budget bill before the votes took place late Friday afternoon and evening, the budget agreement was hailed with huzzahs on all sides and approved by unusually large margins in both chambers. The vote in the Senate was 44-4; in the House 81-11. State Sen. Jim Hargrove, D-Hoquiam, with some pride in authorship, declared, “This budget, I think, is better than I ever could have hoped for when we started the session.”
Passage of the 2013-15 budget takes the single biggest task of the year off the Legislature’s shoulders. Lawmakers worked almost to midnight Friday as they passed a dozen-odd bills required to implement the budget. But still a few big questions remain. Will the Legislature pass a capital budget? Will the Senate take a vote on a highly controversial $10 billion transportation tax package? And what about the fish? Stay tuned. The rest of the show likely will play out over the weekend, and some lawmakers are predicting a final gavel Saturday night.
Puts Emphasis on Education
Senate Majority Leader Rodney Tom, D-Medina.
There was one big loser in the budget deal – the local governments that were counting on loans from the state’s Public Works Trust Fund for local infrastructure projects. The budget sweeps that account to the tune of $277 million. But it might be noted that the maneuver took the place of two other bits of budget magic. Democrats in the House had suggested delaying a payment to school districts by a day, placing the expenditure in the next biennium; the Senate, meanwhile, had suggested bonding for school-construction projects rather than paying for them with present revenues. The budget holds the line on salary increases for teachers and state employees, meaning that by the time the budget runs its course they will have gone six years without a general salary hike.
“The Majority Coalition Caucus fought hard to prioritize funding for education and higher education,” said Senate Majority Leader Rodney Tom, D-Medina. “Neither side got everything it wanted, but this is a compromise budget that lives within our means and brings us a lot closer to the education-first budget the Senate has worked for all along.”
And there is one point that no doubt has more meaning for Olympia than it does for the general populace. This time lawmakers had some $2.1 billion more to spend than they did in the last two-year budget. They put the bulk of that new money into education. The total increase for K-12 was $1.6 billion. The state’s colleges and universities got a 12 percent increase, enough to avert a tuition hike for the first time since 1986. And what it meant was that the new budget reversed the trend of the last 30 years, by which the rate of growth in non-education spending has far outstripped spending on schools. In that time, as the state budget has nearly tripled, education spending increased 289 percent while other areas of the budget increased 563 percent.
“That is basically a 2 to 1 ratio of non-education over education, even though all of us always come down here and say education is our Paramount duty,” Tom said. “I believe we have turned that corner.”
This time out, education is up 11.7 percent; all the rest, 3 percent.
No Big Tax Hikes
House Appropriations Chair Ross Hunter, D-Medina, chats with reporter Essex Porter following the Friday evening vote.
It was the sort of deal that had everyone proclaiming victory, albeit not total. House Appropriations Chairman Ross Hunter, D-Medina, point man for the Dems, said the ultimate deal really wasn’t that much different than the negotiating position the House staked out in early June, or for that matter its initial position in April. “This budget is very similar to the budget we passed months ago,” he said. “The only difference is the source of funds.” Pressure for tax increases was relieved by $321 million in good news delivered by tax-revenue and caseload forecasts two weeks ago, and by the decision to sweep the public works account, he said.
Yet there was a big difference. Not only did the original House budget proposal sweep the state rainy-day fund for $575 million, it envisioned $1.4 billion in tax hikes. Roughly a half-billion dollars would have come by ending a number of tax exemptions and preferential rates for business, and slightly more than that by continuing temporary tax surcharges that are due to expire July 1, on service businesses and beer. The Senate countered with a no-new-tax budget, and in the end the deal included only two tax hikes, neither of them especially controversial. The final agreement gains $160 million by restoring a portion of the estate tax that had been overturned by a state Supreme Court decision, and another $85 million from a telecom tax measure that forestalls other lawsuits by imposing the same level of taxation on all classes of telephone customers.
“This is the first time I know of that government has ever kept its promise on a temporary tax increase,” said state Sen. Don Benton, R-Vancouver. “We didn’t extend those temporary tax increases — $600 million in taxes go away with the passage of this budget. That is a good thing, especially in this economy where we have got small businesses that are struggling to stay alive.”
The rainy-day fund will be left intact – and next time around, the state will have $1.3 billion in the bank.
Inslee Promises Signature
House bursts into applause when all is said and done. At center, an embrace between Hunter and House Republican budgeteer Gary Alexander, R-Olympia.
What comes next is a bit of fast page-turning down in the governor’s office. Gov. Jay Inslee is promising a bill-signing Sunday night – and as always, one can expect a few line-item vetoes. In a statement, the governor said, “My staff and I will begin reviewing it immediately and I will sign it this weekend in time to ensure that state government will be open for business Monday morning.”
Indeed, Inslee will be one of the few who will have a chance to analyze the budget before acting. Although the budget deal was announced Thursday, the actual bill did not appear on the Legislature’s budget website until 1 a.m. Friday morning. The lightspeed passage of the bill may have reflected the Legislature’s rush to complete a deal in time to avert a government shutdown, but it also meant there was little opportunity for public inspection. No hearing was held.
The lack of public inspection left Jason Mercier of the Washington Policy Center unimpressed. “It’s great to see lawmakers were finally able to do the only job they are required to do and adopted a budget before an unprecedented government shutdown,” he said. “While there are likely many good features in the state’s new budget, we won’t know for sure what they are until we catch up with the legislative speed readers that managed to read, understand, and vote on the 482 page, $33.6 billion budget, all within a 24-hour period. I’m all for government efficiency, but that’s a bit too quick and opaque for me. Believe it or not, doing the public’s business does actually mean including the public in the process.”
During debate on the Senate floor, a doomed-to-failure amendment offered 16 Republicans the chance to vote against the Medicaid expansion and make speeches denouncing Obamacare. Its defeat was a foregone conclusion because the budget wouldn’t balance without it — the expansion provides $300 million in federal funds for the state over the short term. And the element of voter-pleasing partisan positioning in that vote was made clear when state Sen. John Smith, R-Colville, asked for a roll call to put members on the record. Lt. Gov. Brad Owen asked members to stand to determine whether a sufficient number supported the motion. The Republicans stood. But then, so did the Democrats. One other big quibble was sounded during the course of debate. It was a good budget, to be sure, said state Sen. Kevin Ranker, D-Orcas Island. But the down-to-the-wire dealmaking certainly caused heartburn for the more than 26,000 state employees who would have been laid off without an agreement. “We owe thousands of Washingtonians an apology, an apology for the stress and anxiety we caused in taking so long to get here.”
Weekend Adjournment Likely
There are a couple other outstanding issues that remain to be resolved before the 2013 session comes to a close. Lawmakers still must pass a capital budget and a bonding bill to cover the cost of new construction projects over the next two years. Key lawmakers say they remain far from a deal, and one possibility might be a “skinny bill” that simply reappropriates money allocated in previous budgets. At the same time, the Senate may or may not take a vote on the $10 billion transportation-tax proposal passed by the House earlier this week – most likely not, say key senators, because of big disputes over the construction of a new freeway bridge at Vancouver, a possible public referendum, and Republican doubts about the efficiency of the state Department of Transportation. “I’d say the chances are slim to none, and slim just left town,” Benton said.
And then there is a wild card – a dispute that continues to rage in the waning hours of the session over a study of fish-consumption patterns. The study, a top priority for Boeing, could offer a brake on the state’s rush to develop water quality standards so stringent they cannot be met with current technology. Those new standards are a priority for the state’s increasingly influential Indian tribes. Negotiations regarding the study broke down early Friday morning, lawmakers report, when the governor’s office objected to a veto-proof budget proviso requiring that the study’s findings be considered in rulemaking. It is unclear how the study might be revived now that the budget has passed, but Tom said it is possible that the effort may be renewed during the final hours of the session. “We have been in a maniacal focus on one thing, the operating budget,” he said. “But we still have a capital budget to pass, and amazing things always happen around this place.”
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