OLYMPIA, April 12.—To hear Gov. Christine Gregoire tell it, everything came to a head in her office Monday afternoon, when she called the Legislature’s party leaders and budget-writers into her office and handed them a package deal. This was it, she said. Don’t put reforms before revenue, or revenue before reforms, or anything before anything else. Do it all at once.
“What we did on Monday was a last-ditch stand,” she said. “I had no idea whether this was going to work or not.”
Gregoire met with reporters Thursday to tell of the dramatic endgame of the 62nd Legislature – and knock on wood, of the last session she will ever helm. The Democratic governor is stepping down at the end of the year after serving two terms. For a time this final Gregoire session appeared to devolve into the mother of all impasses, and seemed as likely to end in fingerpointing and failure as a conclusive finish. Instead it wrapped with an all-nighter that somehow managed to tie up every last loose end. Lawmakers finally finished at 7:28 a.m. Wednesday.
But what many may not realize is how close this one came to a last-minute flopperoo.
At one point, Gregoire revealed, as bleary-eyed lawmakers went through the motions upstairs, it appeared the whole thing was going to fall apart. It took some of the weariest minds in the statehouse to find a way out of that one.
Rested, energetic, and a bit reflective Thursday after a good night’s sleep, the governor said, “It has been my most difficult legislative session.”
Recipe for Impasse
It was a year in which the knob on the usual partisan gamesmanship was turned to 11 and power shifted in a way no one would have predicted at the start. After pondering and rejecting a problematic sales-tax-increase proposal to help resolve a billion-dollar budget gap, majority Democrats in House and Senate were ready by the end of February to take the easy way out. They wanted to shunt $330 million in current school-district expenses to the next budget. That would deepen next year’s budget trouble, at that point estimated to be somewhere on the order of $2 billion if the Legislature didn’t change course.
Turned out the Democrats didn’t have the votes. Three centrist Democrats joined with the 22 Republicans in the Senate, outvoted the Senate Democratic Caucus 25-24, and demanded a more sustainable budget with reforms to long-term spending. Almost immediately the Legislature blew the March 8 deadline for completion of its 60-day legislative session and went into overtime.
What ensued was the weirdest special session on record, in which the full Legislature failed to meet for the first three weeks of a 30-day session, while party negotiators met behind closed doors and failed to get anything done. Republicans accused Democrats of stalling for political reasons. Gregoire said it took weeks before it was clear that lawmakers wouldn’t find a way out on their own, and that she had to present a session-ending compromise. But she said it wouldn’t have worked if she had presented the idea any sooner. Lawmakers needed to understand they’d hit a brick wall.
“Anybody saying that anybody at the table was recalcitrant or whatever, boo hiss on that. Everybody worked well with me. Everybody did what they could. Now, sometimes they would agree and go to their caucus and have to retreat, and that was very frustrating. Temperatures were high and emotions were high, but they kept their eye on the ball and they all got something critical and important to them. They all gave at the end of the day. It was a bipartisan legislative session and I think a success all around.”
Rather than focus on the battles, Gregoire said it makes more sense to focus on what actually got done. Lawmakers bridged the billion-dollar hole in their budget without resorting to budget gimmicks, she said. Her office provided the go-home mechanism – a revision to cash-management practices that will allow the state to realize a one-time benefit of $238 million. Gregoire maintains there’s no trickery involved.
The package deal preserved the state’s two biggest discretionary social-service programs, the Basic Health Plan and the Disability Lifeline, both of which have strong support on the Democratic side but which come under fire whenever budgets are tight, because they are among the few programs that can be cut without running afoul of federal rules or court decrees. Democrats also got a billion-dollar construction bill that will use state debt to accelerate already-planned public works projects. That will create about 18,000 jobs, Gregoire said. Another 28,000 jobs will be created by the state transportation budget. Democrats also won the elimination of a tax break for out-of-state banks on mortgage interest.
Meanwhile, she said the Republicans and centrist Democrats won some rather significant reforms aimed at long-term spending reductions and government transparency. They include a reduction of early-retirement incentives for public employees, a complicated measure that aims to create parity between teachers and classified employees in the K-12 health insurance, and a new statutory requirement that the state adopt budgets that balance over a four-year period. That bill took some crafting, she said. “When it came to the idea that the Republicans promoted, a four-year budget balanced budget, no state, no company in America has a balanced four-year balanced budget, so this was a real stretch to do this and do it right.”
Less-controversial reforms included repeal of Initiative 728, the costly 10-year-old class-size reduction measure that the Legislature has rarely funded. It has been supplanted by more recent education reform initiatives but has been one of the big items that has put the state’s long-term projections into the red.
And then there’s the big non-budget item the governor pushed during the opening month of the session – gay marriage. “I couldn’t be more proud that the state of Washington has stepped up to marriage equality,” she said. “I am very optimistic the people of the state of Washington will embrace that equality if there are enough signatures to get [a repeal referendum] to the November ballot. I stand proud that we are one of the few states that have been able to accomplish this through the legislative process.”
A 2 a.m. Meltdown
For those who live and work at the state Capitol, all of that may be old news – so Wednesday. But what isn’t is the story of how it got done. During that Monday-afternoon meeting, Gregoire told lawmakers it just wasn’t going to work if each side insisted their issues were resolved first. “I gave them a full-meal deal proposal Monday at 12:30 and said, here it is, the full package, done, finished, take it or leave it or make some minor changes. And I think they finally started to talk about it in my room, that O.K., here’s what we might be able to do on the budget, O.K., here’s what we can do more on the reforms. But it was a frustrating process. It didn’t seem to work until I gave them a proposal as a last-ditch stand. They started working from that and they got ‘er done.”
So finally, after a month of inactivity, the Legislature Tuesday evening finally creaked into motion. Rank-and-file lawmakers had been milling about on the floors of the House and Senate for two full days, answering emails and asking reporters if they knew anything about what was happening downstairs. Now they were called into the back rooms and they got their marching orders. Bills began trickling through. Finally the Legislature was steaming for adjournment. The midnight deadline to wrap the special session came and went. Gregoire called another and told everyone she expected them to stay.
And suddenly it all stopped dead.
“We had one last thing on one bill and it stopped the session,” Gregoire said. “Nothing was passing. Nothing was going on, because of that one last thing. The Is hadn’t been dotted and the Ts hadn’t been crossed.”
It had to do with the “trigger mechanism” that would force school districts into the state health-insurance system if they did not comply with new state rules. Well past midnight, after most lobbyists had gone home, the two unions that had been doing battle over the bill, the Washington Education Association and the Public School Employees, were still working the doors of the House and Senate. Agreement still hadn’t been reached. Finally at 2 a.m., the governor came up with an idea. Instead of a penalty, how about an incentive? School districts that comply would get a bonus – additional state funding.
“I could only come up with it when I brought the four leaders back into the office, and I said, you have over a $30 billion budget at stake, you have people’s lives at stake, you have a plethora of reforms that’s at stake, for one paragraph in one multipage bill. We will get it done and we will do it now.
“And we did, and then still nothing happened, until I put the language upstairs. Everybody was satisfied. It was agreed, and the bills started running again, so again, it was always about everything, and without everything we have nothing.”
A Republican View
Senate Republican Caucus Chair Linda Evans Parlette, R-Wenatchee, was sitting in the rear of the governor’s conference room as she spoke with reporters and said afterward that Gregoire seemed to get the story right. The ultimate deal was a bipartisan compromise that probably couldn’t have been reached sooner, and it probably couldn’t have been negotiated without the governor’s intervention.
But Parlette said the breakdown really didn’t begin in the negotiating room. It had to do with the makeup of the Legislature itself, and the fact that a significant number of members, both Republicans and Democrats, made sustainability of the budget their top priority. The takeover in the Senate didn’t create an impasse, she said – it was the first step toward resolving it.
“What we did was we broke a logjam,” she said. “There were not 25 votes for the majority party’s budget in the Senate. They weren’t there. Could we have done it differently? Would it have been better to talk about it first and then tell them we were going to do it? Perhaps.
“But we did what we had to do to break the logjam, and when we did that, it took a while because a lot of feelings were hurt, a lot of egos were hurt. That slowed things down.
“But eventually people recovered. We all came together again. And I think the governor, in the end, helped break the final logjam in the last 48 hours. I know because I was one of those in the governor’s office.”
Parlette said she remembers looking at her cell phone as she responded to a text message during that final breakdown. Yep, she says, Gregoire was right. It was 2 a.m.