Senate Majority Leader Lisa Brown and Ways and Means Chair Ed Murray speak with reporters Tuesday after releasing their budget proposal.

OLYMPIA, Feb. 28.—Senate Democratic leaders released a budget plan that avoids both deep cuts and troublesome decisions by leaving a big portion of this year’s billion-dollar budget problem for next year’s Legislature, and Dems in the middle are trying to decide whether they will stand for it.

It is a clash that will mark the final days of the 2012 Legislature – or the start of a lengthy and protracted special session. A handful of budget hawks in the Senate could tip things either way. And if history is any guide, the situation could hand the reins to the minority Republicans.

Democratic leaders in the House and Senate this year seem to be of the same mind. They would solve this year’s budget problems by pushing them ahead to next year, when money will be just as tight, if not tighter. The Democrat-controlled state House incorporated the same basic idea in the budget bill it released last week – that one got hours of debate Tuesday afternoon, and is expected to get a final vote in the full House shortly. Both budget plans would shunt hundreds of millions of dollars in state obligations into 2013-15, by delaying school-district payments by either a day or a month.

By balancing the budget that way, lawmakers avoid cuts to the Basic Health Plan, education and safety-net programs. They also avoid politically difficult decisions about reining in state spending over the long haul to make the budget sustainable, and they ensure that next year’s Legislature will be in the same pickle.

As with any budget proposal, the Senate plan is chock full of detail. Written by majority Democrats without Republican support, it spares more programs than the House budget did, in part because it leaves a smaller fund balance. It leaves higher education and K-12 spending intact. And like the House budget plan, it abandons the idea of going to the voters to seek approval for a sales tax increase.

At a news conference Tuesday morning, Senate Ways and Means Chairman Ed Murray said the only way to make it all work was to make the next Legislature pay. His budget would shift $330 million in school district payments by a single day, from June 30, 2013 to July 1, thus making it a matter for the 2013-15 budget.

Explained Murray, “I think it is an investment as we manage our way through a very deep crisis, and there is no other way, in my opinion, that we could’ve written a budget that preserves K-12 funding and higher education at this level without cuts unless we made this shift.”

But even Murray acknowledges that he doesn’t yet have the 25 votes that will be needed to pass the budget in the Senate.

At Least Four Dems Aloof

Writing a budget is one thing, passing it is another. At least four Senate Democrats say the plan leaves them cold, and that’s a biggie in a chamber where Democrats have a narrow 27-22 advantage.

State Sen. Tim Sheldon, D-Hoodsport, who frequently votes with Republicans on budgets, says he is a firm no. “I didn’t come down here to represent my party,” he said. “I came here to represent my constituents. I’ve done a survey this year and asked people what they feel about new taxes – that’s a nonstarter in my district. They want to see support for seniors and services and some of those things, but they also want the budget to be sustainable and without gimmicks and tricks.”

Other Senate Democrats don’t take such a hard line, and there are nuances to their positions. But while they aren’t saying heck-no just yet, they definitely aren’t saying yes.

“Stay tuned,” says state Sen. Jim Kastama, D-Puyallup. He said he is disturbed by the way the budget shifts costs to the next biennium. The state faces a systemic problem – spending plans are growing faster than tax revenue, and unless the Legislature finds a way to rein in costs, this year’s shortfall will repeat, year after year.

“My concern continues to be that we are looking at a potential $2 billion shortfall next year and we are pushing it forward. That’s my concern, so we either make the hard decisions now or we hand that to somebody else. I am more inclined to make the hard decisions now, as opposed to leaving them for a new administration or a new Legislature to deal with. I think it will cast a shadow on the ability of whatever administration comes in to follow the Gregoire Administration to get the state on the right track.”

House Must Deal

Others are thinking tactically about big reforms that might be traded for votes on the budget. Middle-of-the-roaders have pushed a number of bills this session, some of which already have passed with wide support in the Senate. Among them are bills that would consolidate K-12 health benefits under a state-managed system, streamline stormwater regulations, and send a balanced-budget constitutional amendment to the ballot for voter approval.

Not all of those bills would directly impact the state’s long-term budget outlook, to be sure. But what they have in common is the fact that they face strong political opposition from the more liberal wing of the Democratic party and its supporters. House Democrats haven’t allowed votes on any of them.

State Sen. Steve Hobbs, D-Lake Stevens, says he wants to see the governor sign reforms into law before he votes yes. “I believe that all sides want reforms, but I want to make sure those reforms get through before I vote on a budget.”

Says Brian Hatfield, D-Raymond, “If we are going to be batting zero, then no, I’m not going to vote for a budget. [If I] rattle off 15 or 18 things and expect to get all of them, no, that is not realistic. But we expect to get about half of them. I think about half of them is fair.”

Could Throw Budget to Republicans

Insisting that the governor sign bills into law by itself threatens a special session. Lawmakers are due to end their regular session March 8, and they would have to move at lightspeed to negotiate with the House, decide which bills are part of a deal, get them passed and deliver them to the governor’s desk in time. If the situation becomes a standoff, it might also throw budget-writing duties to the minority Republicans in the Senate. Republicans would cut deeper and avoid entirely the shift in payments to the next biennium.

History provides at least one precedent. In 1987, when Democrats had a bare one-vote advantage, three of them bolted rather than support a tax increase. When they voted for a Republican budget they essentially threw the power to the other side.

Under the rules that existed at the time, that required significant parliamentary maneuvering by Republicans. But a change to the rules of the Senate on the opening day of last year’s session makes that outcome considerably more possible.

Until last year, it took 30 votes in the 49-member Senate to make amendments to a budget bill when it came to the floor. Under the new rule, it now takes a simple majority of 25. Sheldon, who proposed the rule change, grins as he recalls it. “It is a game-changer,” he said. “It could change everything.”

Senate Republican budget chief Joe Zarelli, R-Ridgefield, said he would have preferred to write a bipartisan budget alongside Senate Democrats. That’s what happened last year, when Senate Democrats conceded they didn’t have the votes to pass a budget of their own. It’s the same situation today, Zarelli said, but the difference is that this year the more liberal Democrats who dominate the Senate Democratic caucus decided not to deal. So a standoff is the natural outcome.

Zarelli said, “What they’ve chosen this year is to kind of abandon that [bipartisan] role and go with the one side, the Democrat side, to try to appease the more liberal faction in their caucus at the expense of everything else, even at the expense of some more conservative Democrats or moderate Democrats. And so the other approach is, from our side, do we have four of them? I think that has a better chance than the approach they are taking now.”

When is a Gimmick Not a Gimmick? 

Senate Democratic leaders say they have found a way to avoid charges of budget gimmickry, though it all depends on how you look at things. The House proposal, which shifts a slightly larger school-district expense of $405 million, simply leaves the problem to next year’s Legislature. In a sense the House plan is like a payday loan, because the next Legislature would have to cover this year’s expenses while scrambling to pay the ones it faces next year. Because money will be short again, the next Legislature would be almost certain to borrow from the future again, and perhaps even get in deeper.

The Senate budget plan is a little different. It would permanently delay the day on which school district money is delivered by the state, from the last day of the biennium to the first day of the next one. So the Senate version might be described as a payday loan that never has to be paid back.

“I think by passing legislation that puts this in statute, we will also solve the question of whether this is a one-time shift or as some call it, an ongoing trick,” Murray said.

The proposal would leave a slightly smaller reserve – some $369 million, rather than the half-billion the House has proposed. And it would reduce spending by about $356 million, though Republican critics say most of that is accomplished through fund transfers and other accounting mechanisms – the actual cut is about $52 million, Zarelli said.

The proposal has strong support from education and social-service groups which say it probably represents the high-water mark that this year’s Legislature might be able to achieve. Shunting expenses to the next budget “is an administrative sin as opposed to a substantive sin,” said Nick Federici, lobbyist for the Washington Futures Coalition. “For some people it might be seen as a gimmick, but nobody loses anything and nobody dies. That certainly can’t be said of a lot of the other things that have previously been proposed.”

The key thing, said Senate Majority Leader Lisa Brown, D-Spokane, is that the proposal avoids the enormous cuts to state programs that the Legislature has been forced to make during three years of recession. “We are cautiously optimistic that we are turning the corner here in the economy and we are making the statement that it is time to turn the corner in terms of cuts as well, especially to education.”

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