The House finally gathers for action in the waning hours of the year's first special session -- and gets set for an all-nighter that will carry it into a second.
OLYMPIA, April 14.—Three months ago, when this year’s legislative session got under way, most of the talk was about the state’s immediate problem – the big $1.5 billion shortfall. But the way a fair number of lawmakers saw it, that wasn’t even half of it.
If the state didn’t make the right moves this year, there was going to be another shortfall just like it next year – somewhere between $1 billion and $2 billion, depending on whose estimate you used. And the shortfall was just going to keep growing, year after year, meaning round after round of painful cuts, one budget after the next. Or maybe a whopping tax increase. State spending was increasing at a rate faster than taxes, and even if lawmakers filled a billion-dollar hole in every budget, they would face another problem the next time, just as big as the last.
That concern is the real story behind what happened in the state Legislature this year. It explains the call for a tax increase from Democrats in the early months, and the battle cry from the Republicans: “Reforms Before Revenue.” The upheaval in the state Senate in which three Democrats voted with Republicans and overturned their party leaders for the first time in a generation. The month-long standoff that produced one of the weirdest overtime sessions on record, in which House Democrats appeared to dig in their heels, negotiations went nowhere and the 147 members didn’t even bother meeting until the final six days of the 30-day session. And then finally the double-overtime sudden-death deal in the wee hours of the morning Wednesday on day 31, when agreement seemed near and the governor called lawmakers back for another special session — and a dispute over a single paragraph in a K-12 health insurance bill threatened to tear everything apart.
In the end, the lawmakers who held out for big reforms say it was all worth it. They say this year’s big changes may have changed the course of state government. “These reforms aren’t perfect, but they were more than we were doing previously,” said state Sen. Jim Kastama, D-Puyallup, one of the trio of Democrats who voted with the Senate Republicans and stood the Legislature on its head. “They set the stage for a change of attitude in this institution. This is what we should get used to. This is the only way that we are going to regain the trust of the public. They need to know that we are being efficient and effective, and we have to prove it to them.”
State Sens. Jim Kastama, Rodney Tom and Tim Sheldon on the night of March 2, the turning point of the session, when the three Democrats voted with the 22 Senate Republicans and wrested control from the Senate Democratic Caucus.
A landmark session? Time will tell. Now that a new budget has passed, there aren’t any official estimates yet on the size of the financial problem the state faces next year. At the very least, the upheaval in the Senate blocked a Democratic plan to balance the budget by shunting $330 million in school-district expenses to the next budget. So the final $31 billion budget deal didn’t make next year’s problem any worse. Meanwhile, some of this year’s reforms will have a big fiscal impact, next year and in the years ahead. Others won’t impact the budget but will bring a dramatic change in state policy. Many remain controversial and may be subject to repeal moves in the years ahead.
From all sides comes a recognition that it came down to the three who switched their votes in the Senate – Kastama, Rodney Tom, D-Medina, and Tim Sheldon, D-Hoodsport. Said Sheldon, “I think I’ve learned that radical change is possible.” And Senate Republican budget chief Joe Zarelli says the Rs couldn’t have done it without them: “They proved ideas were stronger than affiliations,” he said.
Not that everyone is appreciative. “I think it showed the power of a few committed people can really gum up the process,” said state Rep. Zack Hudgins, D-Tukwila.
While there might be a few public employee unions who aren’t altogether happy with the outcome, one picks up a sense of relief from many that the battle is finally over. Even Democratic Gov. Christine Gregoire was praising the final result, calling the budget and reform package a bipartisan solution that hit the happy medium. “I think they all were tired of cutting; they were all tired of shredding the safety net; they were all tired of cutting public safety; they were all tired of taking too big a hit on K-12 and higher education,” she said. “It reflects what everyone wanted to come out of the legislative session. So I’m happy with it.”
Here’s a rundown on the session’s biggest reforms:
Pension Reform
Lawmakers dealt a blow to unionized public employees when they partially repealed the costly early-retirement incentives they had awarded to state employees in 2001 and 2007. Because the changes apply only to new employees, it will be years before the state sees an effect. But pensions are among the biggest cost drivers in state government, and it’s going to be a biggie. Right now an employee can retire at age 55 after 30 years of service with 80 percent of benefits; that will be reduced to 50 percent. The deal represented a compromise: Budget hawks in the Senate wanted a full return to old actuarial standards, which in that particular case would have reduced benefits to 36 percent. The reform is expected to save the state $1.3 billion over 25 years.
K-12 Health Insurance
The Legislature lifted the veil on the secretive health-insurance programs in the K-12 field that partisan critics believe have fueled big profits for the Washington Education Association, the state’s biggest schoolteacher’s union and a major backer of Democratic campaigns. Others saw it as an issue of parity – schoolteachers win good premium rates at the bargaining table, sweetened by levy funds, while classified staff represented by the Public School Employees union are locked into more expensive plans. An unwieldy effort to move all K-12 employees into a state-managed system was defeated. But the final compromise requires districts to reveal financial information about expenses, reserves and premium costs, and allow open contracting. Greater equity between individual and family coverage is required. And employees are supposed to be given access to health savings accounts and less-expensive high-deductible plans. Districts that don’t comply with the standards by December 2015 will be moved into the state-managed insurance pool for public employees.
Four-Year Balanced Budgeting
Washington will become the first state to require budgets to balance over the long haul, using projections from the state’s independent economic forecasting agency, the Economic and Revenue Forecast Council. Basically, the state always adopts a balanced budget, as a matter of definition. But by going beyond the current two-year budget cycle and requiring that budgets balance over four years, the rule is supposed put a brake on ambitious spending choices that can’t be supported with existing tax revenue. The idea is that it might reduce the chance that one year’s Legislature will hand a headache to the next one. In the final days of the session, there was plenty of dickering over the precise way the numbers will be used. The problem is that economic forecasts in recent years haven’t exactly been trustworthy. The final deal offers a fudge factor, assuming that tax revenue will grow at least 4.5 percent in the out-years. All of which helps explain why lawmakers ultimately rejected the idea of a constitutional amendment, and wrote it into law instead. If the plan doesn’t work, they can always repeal it. But it also makes the mechanism more of a guideline than anything else.
Repeal of Initiative 728
Back in the year 2000, Washington voters passed a pair of costly K-12 initiatives that the state couldn’t pay for at the time – Initiative 728, which mandated class-size reductions, and Initiative 732, which mandated teacher-pay increases. It still can’t. Only during the boom years of Gregoire’s first term were they implemented. But they remain on the books, and they’re one of the big reasons the state’s long-term projections are stuck in the red. By 2017, they together would have required an annual expense of $1 billion. There was general consensus in the Legislature that 728 could go. It has been supplanted by long-term class-reduction goals contained in a 2009 education-reform bill. But lawmakers didn’t go all the way and undo 732 – which might have proven a bit much for WEA to swallow.
Teacher Evaluations
In an all-but-forgotten donnybrook from February, lawmakers did battle over a proposal that would have imposed rigorous rules for performance of teachers and principals. The original idea was this: those who do poorly on evaluations were supposed to be marched out the door, and in times of layoffs, performance was supposed to decide who stays and who goes, rather than union seniority rules. It was a crusade for education reformers and business groups, and a hold-the-line cause for the WEA and other established K-12 groups. In a way it was the big setup for the Senate upheaval that took place a month later. At one point, when it looked like the bill was near death, centrist Democratic senators announced they would stand with Republicans on the Senate Education Committee, and they refused to let anything pass. And just as with the final session-ending deal, it took the governor to broker a compromise. In the end, it wasn’t clear what sort of an impact the bill will have. Though the measure is a first step at linking performance criteria to termination, the final compromise allows unions to bargain with districts about the way those criteria will be used.
Your support matters.
Public service journalism is important today as ever. If you get something from our coverage, please consider making a donation to support our work. Thanks for reading our stuff.
