OLYMPIA, Jan. 14.—With an opening-day drama on deck in the Senate and a vague multi-billion-dollar problem to solve in coming months, Washington lawmakers open their 2013 session today with a bang. When that opening gavel drops at noon, Democrat Rodney Tom takes the reins as leader of a new cross-party majority coalition that will shift control of the Senate and set the pace for the year.
Tom says you can expect a stunner of an announcement. Some Democrats will accept committee chairmanships from the largely Republican coalition today, despite the opposition of the Senate Democratic Caucus as a whole.
That’s just the start. In coming months, lawmakers face big debates over school funding, transportation, and the state’s plans regarding federal health care reform. Maybe also on taxes and issues raised by the decision of Washington voters last year to legalize marijuana. Gov.-elect Jay Inslee takes office Wednesday, vowing to boost jobs and provide tax incentives to start-up companies – details to come later. And looming over everything is a hazy budget problem at least $1 billion in size, maybe $2 billion, maybe more, depending on how it is defined and how big a problem lawmakers create for themselves. Work begins in earnest Thursday after opening ceremonies, speeches from the incoming and outgoing governors, and the Inaugural Ball. The session runs 105 days.
First Order of Business
First things first, though. The vote in the Senate is the key to everything. “I think people will be excited how it turns out,” says Tom, the Democratic senator from Bellevue who has joined with Sen. Tim Sheldon, D-Potlatch, to shift control of the Senate. “My goal for the process is that it will be the most anti-climactic event the press has covered.”
It has taken a month of feudin’, fussin’ and fightin’ to get to this point. The two Democrats announced Dec. 10 they will vote with the 23 Senate Republicans to form a coalition majority – a parliamentary maneuver that will place the remaining 24 Senate Dems in the minority position. What it amounts to is a takeover from the middle, a coalition that promises to downplay the hot-button social issues and focus on education, government reform and fiscal responsibility. The significance is far more than procedural – what it means is that the session is destined for a moderate tone. Though Democrats are in firm control of the House under Speaker Frank Chopp, it is unlikely that highly partisan House bills will get far in the Senate. And in the upper chamber, Tom says such measures are unlikely to emerge in the first place. “The citizens of Washington want a different way of doing business,” he says. “Instead of getting into partisan battles, we can put politics aside and address the issues of importance to the people.”
In the name of bipartisanship, Tom’s coalition offered the Senate Democratic caucus the chairmanships of select committees. The frustrated Dems decided as a whole that they would rather remain in the minority and let the House Ds do the fighting. Tom told Washington State Wire Sunday night that a number of individual Democrats will announce today that they will accept the gavels from the coalition. Exactly who and how many is part of today’s drama. “Tomorrow we’re going to be as professional as we can and set the tone for the session,” he says. “We want to work together not just tomorrow but for the entire session.”
All About Education
This central issue before lawmakers this year is the billion-dollar-or-more problem that has been handed them by the state Supreme Court. Last year, in its “McCleary decision,” the court ruled that the state hadn’t been spending enough on basic education, and said lawmakers might satisfy the court by paying for basic-ed bills they passed during the depths of the recession, at a time when they couldn’t possibly raise the money. Now the budget picture is beginning to brighten. The state expects about $32.6 billion in tax revenue over the next two years. That’s about $1 billion short of the cost of maintaining all the programs on the books, but it is worth noting that the shortfall exists mainly on paper. The figure counts programs that have been delayed and suspended for years and could easily be deferred again, like the state family-leave program and Initiative 732, which provides cost-of-living increases for teachers. The figure also assumes the state won’t re-enact a hospital bed tax that is due to expire in June – an easy way to leverage federal Medicaid money. Relatively painless choices like those, plus efficiencies and savings identified by Gov. Christine Gregoire in her final budget proposal, could wipe out the immediate shortfall and leave the state with money in the bank.
But McCleary comes on top of that, and the price tag is huge – somewhere between $1.6 billion and $2.2 billion a year when the basic-ed bills are fully implemented. Lawmakers this year expect to begin a five-year ramp-up process, but they haven’t reached agreement on how much they will spend, or even on whether they will go beyond the minimum programmatic requirements. “The question is how much we have to do this year,” observes House Appropriations Chair Ross Hunter. Many Republicans favor a figure of $1 billion or so; Hunter calls $1.3 or $1.4 billion “a midpoint for reasonable discussion”; some education advocates have suggested a figure of $2.5 billion or more.
So the Legislature’s problem this year really isn’t like those of the recent past, when unsustainable spending plans passed just before the onset of recession left lawmakers billions of dollars short. This time lawmakers might be in trouble again, but how deep depends on the hole they decide to dig. If they exercise restraint on K-12 spending and Congress allows states to collect an Internet sales tax as many lawmakers expect will happen, their actual problem might be measured in the hundreds of millions, not billions.
Tax Talk Muted
Right now big tax increases don’t appear likely. The Democrat-controlled House might be inclined, but big hikes appear doomed in the Senate. Even if the Legislature said yes, Inslee pledged during last year’s campaign that he would oppose new taxes, even veto them if they crossed his desk. He’s still a believer: “I have talked in general about not proposing general revenues,” he told reporters last week. “I still believe that is the way forward, and I’m going to entertain every creative idea about how to solve the problem from every point of the political compass. And I’m serious about this.”
There’s another factor as well: Initiative 1185, passed by voters last November, reimposes the requirement for a two-thirds vote of the House and Senate for any tax increase. The state Supreme Court is expected to rule shortly on a challenge to the two-thirds rule, which now has been approved by voters five times. But unless the court decides to overturn it, the rule essentially requires Democrats and Republicans to agree on anything they do – a rather difficult task.
Nonetheless, there is tax talk – Democrats last year floated a capital gains tax; environmental interests hope to launch discussion of a carbon tax; outgoing Gov. Christine Gregoire has suggested new taxes on oil. Also likely to be debated is an effort to reimpose temporary taxes imposed in 2010 on beer and service businesses.
Other high-profile issues likely to surface:
Transportation: Transportation-minded lawmakers and their allies are scrambling to assemble a gas-tax increase proposal for road construction that might be sent to voters. That effort is likely to butt up against proposals to impose gas taxes for school-bus transportation, essentially freeing up general fund money for McCleary. Lawmakers say they can’t do both, and while Hunter says the Dems are willing to consider the school-bus shift, there’s plenty of opposition. “It is pretty much a non-starter in our caucus,” says Sen. Steve Litzow, R-Mercer Island.
Health Care: Two big debates are likely to be triggered by the launch of federal health care reform in 2014. One surrounds the management of the state Health Benefits Exchange, the public entity that will market the standardized insurance policies that will be offered under federal health care reform. Will those who don’t buy policies there be required to help pay the $50 million tab? The other has to do with expansion of state Medicaid programs under health care reform, most of which would be paid for by the feds in the early years. Lawmakers appear in general agreement that the expansion will proceed, but there may be debate over conditions.
Environment and Energy: Watch for a renewal of the age-old debate over I-937, the 2006 measure that imposes stiff purchasing requirements on utilities for renewable energy. The trouble is that expected growth in demand didn’t materialize, and utilities now are essentially required to purchase costly windpower they don’t need, with no environmental benefit. Debate will focus on the role of energy conservation and on a proposal to impose purchasing requirements only when power is required. The state’s environmental groups, under the banner of the Environmental Priorities Coalition, have designated their three top issues of the year: Promotion of clean energy, including the continuation of state tax sales and use tax exemptions for renewable energy; the phase-out of certain flame retardants in home furniture and children’s products, and bond funding for environmental projects and land-conservation purchases.
Marijuana: Washington’s landmark vote to legalize marijuana last session seems likely to trigger legislation, though it is not clear at this point what form it will take. The state Liquor Control Board is currently drafting rules for producers, processors and sellers in the newly legal marijuana market next year. State Rep. Chris Hurst, D-Enumclaw, the House point man on the issue, has suggested that the Legislature ought to amend I-502 to impose higher license fees – and that could reopen the issue for every interest with a stake in what is expected to be a $1 billion a year industry. Meanwhile, the measure’s controversial rewrite of DUI law also may spark pressure for changes.
Guns and Abortion: While the Senate takeover may serve to mute debate on hot-button social issues, recent shootings nationally have inevitably prompted talk about gun bills on both sides – reducing access to semi-automatic weapons on the one hand and arming teachers on the other. Meanwhile, Sens. Litzow and Steve Hobbs, D-Lake Stevens, are planning to renew the push for the reproductive parity act, which would require health insurers to cover abortion services.
Job Creation: Yet to emerge is a detailed proposal from Inslee to enact the job-creation plan he touted during the last campaign. But he did offer one hint during his appearance before reporters at an Associated Press forum last week. Inslee said he favors “tradeable tax credits” for startup businesses – meaning that if they can’t use them, they would be able to sell them. Watch for clarification in his inaugural address Wednesday.