Gov. Jay Inslee notes that deal must be approved by larger members of the Legislature.

OLYMPIA, June 24.—At the same time the state budget office notified tens of thousands of public employees that they will be furloughed indefinitely without pay next week, Gov. Jay Inslee announced that a breakthrough had been reached in budget talks between the House and the Senate and a final deal may be announced at any moment.

That ought to end once and for all the fear that state government will shut down on July 1, he said. Next Monday, a new fiscal year begins, and without a budget most state government agencies will have no authority to spend money.

But another question was raised by Inslee’s announcement – what, exactly, was that breakthrough? Although Inslee said he could divulge nothing, it was widely rumored among the throng of lobbyists that gathered under the Capitol Rotunda that budget negotiators for the Senate had agreed to allow a telecommunications tax bill to move forward. That would raise an additional $85 million. Earlier, the Senate Majority Coalition had insisted that the other team — the majority Democrats in the House — pass a workers’ compensation measure in return.

Inslee was neither confirming nor denying Monday. When he was asked specifically about the telecom tax or workers’ comp, he demurred. The governor said simply, “In the last three hours there have been very significant breakthroughs, in my view, that have left no excuse for legislators not to reach an agreement very quickly, so that we can notify state employees that they will be coming to work on July 1.”

Inslee said he expected an announcement of a budget deal within a few hours. Though his own news conference may have seemed premature, Inslee’s 2:30 p.m. appearance was timed to ensure local television stations would have video for the evening newscast. The first of 26,000 state employees had received layoff notices via email an hour before.

Needs Approval From Larger Legislators

Senate Floor Leader Joe Fain, R-Auburn, on Sunday showed how far apart the two sides are in budget negotiations — mere molecules, he said.

Inslee’s announcement of a future announcement was the sum total of news coming out of the Legislature Monday afternoon. The House passed just one bill Monday before adjourning, a non-controversial state-parks measure that had already been approved by the Senate and which is considered necessary to implement the budget. What the vote did was show that a significant number of members were absent in the House, 12 in all. The measure passed 78-7. The absences helped explain why the House did not take up a transportation bill Monday afternoon, as had been widely anticipated Sunday.

On Monday Fain says legislators are now this far apart.

Meanwhile, senators spent most of the afternoon in closed-door caucus meetings, and the only floor action involved the opening prayer and the flag salute. Senate floor leader Joe Fain said he thought the Legislature was even closer to a deal than Sunday, when he said mere molecules separated the two sides. On Sunday he demonstrated by placing his fingertips and palms together and saying the two sides were “that far apart.” What could be closer than that? On Monday he clasped his palms together again, but this time he meshed his fingers.

If the rumor about the telecom bill is correct, it would represent a significant change of position for the Majority Caucus. The Senate majority has been hinting for weeks that it wishes to trade for the telecommunications measure, an otherwise non-controversial bill that aims to prevent lawsuits by providing for the same level of taxation for all telephone customers. Over the last week, leaders have let their price be known – a controversial worker’s compensation bill that would expand a settlement program launched by the Legislature in 2011. Senate Majority Leader Rodney Tom, D-Medina, told reporters Sunday, “If telecom is to be put on the table, it is going to take a workers comp bill, and so far there has been no appetite for that, so the deals that have been structured don’t have those two elements.”

Inslee said Monday afternoon that there had been a significant change in bargaining positions he was not at liberty to reveal. “There has been very substantial progress in these negotiations. And I’m serious about that. This was a breakthrough moment that happened in the last few hours, that in my view is the key that can open up this lock that has been separating the parties and allow us to keep the ship of state afloat. I’m treating it with that degree of significance. That is the way I view it, and if larger members of the Legislature will be in tune with what the negotiators are doing, we will get a good deal very shortly.”

Not Driving in the Rear-View Mirror

Inslee said he does not want to dwell on the circumstances that have brought the state to the brink. That was a contrast with his position of two weeks ago, when the governor pinned all blame on Republican members of the Majority Coalition in the Senate, and found no fault with his fellow Democrats in the House. Exactly what brought the state to the brink, the governor says he doesn’t want to think about. “That is for others to look in the rearview mirror,” he said. “I am not driving in the rearview mirror. I want to drive these folks to a budget deal that is a good deal for education and the citizens of our state, and that means I am going to be focused like a laser beam for the next few hours to try to get a deal. That is the obligation of the state Legislature.”

According to Inslee’s budget office, some 26,000 of 59,000 state workers will receive temporary layoff notices. That does not include workers in the attorney general’s office and the Department of Natural Resources, which are overseen by independently elected officials, nor does it include layoffs that will take place in K-12 and higher education.

Once an agreement is reached, those notices will be rescinded, Inslee said. 

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