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No Transportation Package for Christmas, but Unusual New-Year Special Session Becomes a Possibility – New Proposal From Democrats

No need to fear -- the Capitol will remain empty through the holidays as all talk of a pre-Christmas special session has gone out the window.

No need to fear — the Capitol will remain empty through the holidays as all talk of a pre-Christmas special session has gone out the window.

OLYMPIA, Dec. 7.—Looks like lawmakers can start making holiday plans as negotiations on a transportation deal remain snarled by demands for big reforms, and all thought of a pre-Christmas special session has gone out the window.

But some lawmakers are talking up the possibility of an unusual new-year special session that might be held in January before the Legislature launches its regular session on Jan. 13. All depends on whether a deal can be struck in time. Democrats plan to unveil a new proposal Monday as back-room talks continue. Lawmakers right now are contemplating a deal upwards of $10 billion and which would raise the state gas tax by more than a dime a gallon. Biggest sticking point right now is that leading Democrats and their key constituent groups want to continue the diversion of gas-tax money to the state general fund — the largely Republican Senate majority coalition wants to end the practice. But there are plenty of other disputes, on labor rules, transit funding, bike paths, and money for the stormwater drainage projects that are a top priority for green groups.

The thing is that time is getting tight, warns House Transportation Chairwoman Judy Clibborn, D-Mercer Island, and she is beginning to get nervous whenever she looks at the calendar. She says she hopes lawmakers will reach some sort of a final agreement before Christmas. Like many others who are watching the negotiations intently, Clibborn is backing a plan that would have lawmakers start their business a few days early and pass a transportation bill before the wide-open legislative session begins. If you kick transportation into the 2014 legislative session, lawmakers would be starting over from square one, and she says the whole thing could unravel. “As we drag on, I think people keep wanting to give up on it, but I don’t think either side is giving up yet,” she says.

Sen. Curtis King, R-Yakima, co-chair of the Senate Transportation Committee, says the timing isn’t as important as getting the right deal. Unless Democrats can swallow big reforms, it is hard to see how a deal will win the approval of his caucus. “We would just like to see it get done,” he says.

Down to the Wire

Key players on transportation issue: State Sen. Curtis King, R-Yakima, co-chairman of the Senate Transportation Committee, and state Rep. Judy Clibborn, D-Mercer Island, chairwoman of the House Transportation Committee.

Key players on transportation issue: State Sen. Curtis King, R-Yakima, co-chairman of the Senate Transportation Committee, and state Rep. Judy Clibborn, D-Mercer Island, chairwoman of the House Transportation Committee.

You can say the deal has been in the works for more than three years. A task force convened by then-Gov. Christine Gregorie came up with a $50 billion wish-list – not than anyone would dare suggest that taxes be raised that much. The basic problem is that most money raised by the state’s 37.5-cent gas tax is already spoken for, tied up into the future by bonds approved in previous years, with little available for new road projects and big reconstruction efforts on existing highways. Reduction of traffic congestion is seen as a key business-climate issue, and business and labor are standing together on this one. But as usual with transportation – it’s complicated.

An effort to pass a gas tax increase last session was stymied by the usual tricky politics associated with big-picture issues as well as the nitty-gritty details of the project list. Of particular importance were demands from Republican quarters that something be done to reduce the higher-than-typical cost of road projects in this state and to end the public embarrassments associated with costly goofs at the Department of Transportation. The litany includes misaligned freeway connectors, listing ferryboats and cracked pontoons on the current 520 bridge project on Lake Washington that will cost $80 million to fix. Public confidence is an issue, Republicans say, inasmuch as any transportation proposal will probably go to the ballot in some form, either in the form of a legislative referendum or a rollback referendum.

That’s the backstory — here’s what’s new. Lawmakers have come a long way toward negotiating a deal in the last few months, Clibborn says, but the effort could fall apart if it takes much longer.

“If you take it into the next session, everything goes into committees,” she says. “You can’t take what we have agreed to around the table, and all the compromises and all those bills that have reforms or policy changes and some of the things that we have come to a middle ground on – they would all go back to a committee. Any labor bill would go to the labor committee, and anything that had to do with financing would go to the finance committee. You would lose any of the agreements that were done around the table.”

Feeding Frenzy is Fear

Spokane's North-South freeway is among the long-awaited projects that would be fully-funded under the Senate proposal. Here the Highway 395 bypass crosses Farwell Road.

Spokane’s North-South freeway is among the long-awaited projects that would be fully-funded under the Senate proposal. Here the Highway 395 bypass crosses Farwell Road.

Clibborn notes that when lawmakers returned to Olympia in November for two days of committee hearings, there was plenty of agitation for local road projects. That offers another chance for things to go awry.

“It would start over with the projects. I can tell you, it was really a feeding frenzy when we were down here for a couple of days. Everybody had a new thing that they wanted put in the package, so I think if you don’t make it before the regular session starts, I think you just start over, and I don’t know who has the will to do that.”

 That’s true enough – King says he saw the same thing. Just before lawmakers came town in November, the Senate came up with a plan that upped an earlier House proposal by a penny, to 11.5 cents a gallon, and found even more money for road projects by changing the way the state spends money. Ultimately it made available about $2.5 billion more for roads, and most significantly it avoided tolls on the I-90 Lake Washington bridge. Tolling has been contemplated to pay for the nearby 520 project. But of course there is never enough money for everyone.

Says King, “It is always amazing to me that I get these calls from people on both sides of the aisle that say, gee, thanks for putting in a project of merit, it is great to have that project and have you funding that project, but you know, I have this other little thing here that is only a few million dollars, and man, if we could get that thing in there, it would really be great because it is important to my district or my area or my city – and you know, it is just the way people think.”

In other words — plenty of reason to hold the line and get the deal done fast. So what’s the holdup?

Kids Versus Concrete

A dispute over the sales tax appears to be a central issue – a matter of policy that is one of the biggest things driving up the cost of Washington transportation projects. Gas-tax money in this state is earmarked for transportation projects, the result of a 1944 constitutional amendment that forbids money from going directly to other purposes. But the state nevertheless diverts gas tax money to the general fund in an indirect fashion, by levying the state sales tax on construction materials. It is a big chunk of change – on the Senate’s 10-year $12.3 billion proposal, some $670 million ordinarily would be shunted to the general state budget. The Senate proposal would stop that practice and put the money back into roads. And of course it is one of the reasons the Senate found a way to pay for more projects.

“It is of vital importance to us,” King says. “It is what I think the people of the state of Washington expect us to do. I think they would be surprised to find out that we are taking gas tax money and then doing a project, charging sales tax on it and then taking that sales tax and moving it into the general fund. I don’t think most people know that, and most people think that their gas-tax money is going for roads. There are reasons why we have to charge sales tax, but it should come back into the transportation system, not into the general fund.”

It is a big change in policy – more money for roads means less for everything else — and it has raised the hackles of several key Democrats, among them House Appropriations Chair Ross Hunter, D-Medina, and House Finance Chair Reuven Carlyle, D-Seattle. Carlyle for one argues that a big change in tax policy ought to launch an even bigger debate on tax reform. And on their side are all the interests that have a stake in state spending. Nick Federici, representing the Our Economic Future Coalition, says social-service interests and others dependent on state revenues see it as a threat. “That is serious change to drain out of the operating budget into the transportation budget,” he says. “I don’t thing there is anybody who thinks we don’t need a transportation package. But unless they do something to replace those funds, by closing loopholes, by doing something else in the revenue system – if we’re going to start moving money around, there should be a bigger-picture discussion around it, rather than what is good for the transportation system. It should be what is good for people, rather than what is good for the transportation system.”

It is the age-old kids-versus-concrete argument. Of course, if no tax package passes, there is no sales-tax money to argue about. Clibborn says she is untroubled personally by the idea – she’ll do anything it takes to pass a package. But it is going to take Democratic votes, too. She’s not saying how the new Democratic proposal will treat the sales-tax issue, or how it will deal with other matters in dispute. But she says, “Nobody’s trying to kill anything on either side.”

Labor, Environmental Issues

And there are plenty of other issues that remain in play. Democrats and Republicans are negotiating modest changes to state apprenticeship and prevailing-wage requirements, and predictably labor is putting up fierce opposition. Environmental groups are steamed about a Senate proposal that would finance stormwater projects with a different tax, the lucrative state tax on hazardous substances, which generates big money whenever gas prices spike. Green groups hate that idea because they say the Model Toxics Control Act tax doesn’t generate enough money to satisfy all their desires. Transit advocates say there isn’t enough money for buses and bike paths in the Senate proposal – a popular cause in the urban Puget Sound area. The Senate plan would allow local taxes to be raised for transit, but some advocates say there should be more. Then there is the usual carping from Seattle and other communities that pay more in taxes than they get back – as always, they  complain they don’t get enough.

Swing-district lawmakers say they are getting a little concerned about all the issues that seem to be in contention. Unless there is a deal and a vote before Jan. 13, the progress of recent months could blow up, says Steve Hobbs, D-Lake Stevens, one of the members of the negotiating committee. “Obviously tensions are high when you are in these negotiations, but the fact is that we are still talking,” he says.