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Senate Passes No-Tax Budget With Broad Bipartisan Vote – Even as Ds Turn Up Party Pressure

Senate Says Yes 30-18 – While Governor Twists Arms for No-Votes and House Ds Say Fiscal Restraint Means ‘Throwing Grandmothers in the Street’

Senate Ways and Means Chair Andy Hill, R-Redmond, speaks on the Senate floor Friday night.

Senate Ways and Means Chair Andy Hill, R-Redmond, speaks on the Senate floor Friday night.

OLYMPIA, April 6.—The Washington state Senate gave broad bipartisan approval Friday night to a budget that doesn’t raise taxes, and the 30-18 vote might have been broader if it hadn’t been for the way Democratic opponents turned the screws.

The no-tax budget, the product of negotiations between Republicans and minority Democrats in the Senate, confounded the line taken by Democrats generally at the statehouse – that only a whopping tax increase can save Olympia. So the vote Friday presented a curious scene. While centrist Senate Democrats declared that the budget deal represented the best tradition of political compromise, Democrats in the House held a news conference to say that the $33.3 billion spending plan was a matter of “throwing grandmothers into the street.” The governor called Democratic senators to his office one-by-one and urged them to say no to bipartisanship. The Ds, he said, ought to stick together.

In the end the effort to pick off Democratic votes probably narrowed the numbers, but it wasn’t enough to change the outcome. Seven members of the Senate Democratic Caucus voted with the Majority Coalition. One Republican, Mike Padden of Spokane, voted no, arguing that the budget wasn’t conservative enough.

Senate Ways and Means Chairman Andy Hill, R-Redmond, called the result a triumph – a bipartisan vote and a budget deal that ought to make both parties proud. The deal offered the Democrats plenty, and it clearly wasn’t the sort of budget the Republicans would have written all by themselves. Yet it still ran up against the big D bugaboo – it didn’t raise taxes. So Hill said you had to expect Democratic party leaders to fold their arms. “From the beginning people said you can’t put $1 billion into basic education and you can’t increase higher education funding by 10 percent, and you can’t do anything without more taxes. And I think the fact we did that is garnering a response that is a little surprised and a little shrill.”

Democrats are Split

Rep Laurie Jinkins says Senate budget puts grandmothers on the street and throws the poor under the bus.

Rep. Laurie Jinkins, D-Tacoma, says Senate budget puts grandmothers on the street and throws the poor under the bus.

Driving the action in the state Senate is the fact that a coalition of budget hawks is in the driver’s seat, 23 Republicans and two Democrats. They have taken a hard line against taxes despite enormous demands this year. Chief among those obligations is the Supreme Court’s McCleary decision, which requires the Legislature to make a big increase in K-12 funding, somewhere on the order of $1 billion. When one adds to that the cost of all the programs currently on the books, it means the state has about $4 billion in additional demands at a time when tax revenue is expected to increase by about $2 billion. Some of that problem exists only on paper and is a matter of budgeting assumptions, but lawmakers still face a problem somewhere in the $1 billion range.

The Majority Coalition in the Senate started with the assumption that it wouldn’t increase taxes – but it brought Democrats into the room to negotiate the details. You can consider that a nod to political reality. Though it might have written a budget that reflected Republican priorities alone, the Senate still has to negotiate with the House, which is under the firm control of the majority Democrats, and whatever the two chambers come up with will have to pass muster with a Democratic governor, Jay Inslee. So what the Senate came up with this week was a strikingly moderate plan that recognizes all deals with public-employee unions, provides $1 billion for McCleary, moderates cuts in human-service programs, provides money for family-planning programs and immigrant services, and still provides a big infusion of funds for higher education to stave off further increases in tuition. And the kicker: No new taxes.

The result made for the apparent split in Democratic ranks Friday. Party leaders said the deal was good but not good enough. Yet Democrats who were involved in the deal urged lawmakers to look at the half-full glass. Sen. Jim Hargrove, D-Hoquiam, said the Majority Coalition clearly was in the driver’s seat, and clearly there were some painful cuts, but by working together the two parties managed to come up with what could be considered a true political compromise. At Hargrove’s side was Sen. Sharon Nelson, D-Maury Island, one of the more liberal members of the Senate. And Hargrove said that while he was disappointed that Inslee rallied opposition to the deal, he wasn’t altogether surprised.

“He has got his positions to advocate for, and was I happy about it? No, but it was well within his right. And it is not unusual for a governor to advocate on policy bills or on the budget, so I’m not holding any grudges.”

Ds Call it a Starting Place

Sen. Jim Hargrove, D-Hoquiam, praises bipartisan budget process -- but says he still thinks a tax increase will be needed.

Sen. Jim Hargrove, D-Hoquiam, praises bipartisan budget process — but says he still thinks a tax increase will be needed.

The budget plan passed by the Senate Friday night stands in sharp contrast to a proposal offered by Gov. Inslee last week. The governor’s plan boosts K-12 spending by an additional $200 million, and it requires $1.2 billion in new taxes. Inslee gets there by eliminating $565 million in tax exemptions and by reimposing $661 million in “temporary” taxes on beer and service businesses that are due to expire in June. Inslee’s plan wasn’t a full budget proposal – his office hasn’t bothered writing a bill – but the House Democrats are expected to unfurl a full proposal along the same lines next week when they unveil their own budget proposal. State Rep. Tami Green, D-Lakewood, said the House Democrats will offer up their plan on Wednesday.

Debate in the Senate showed where the battles will come. Democrats spent three hours offering up a series of amendments that would have increased spending by some $455 million. Biggest flashpoints were a cut to the stipends offered through the state’s disability lifeline program for disabled adults, from $197 a month to $99, saving $65 million; a proposal to hire more teachers to reduce K-12 class sizes, worth $226 million; and a cut to childcare stipends for the state’s welfare-to-work program, worth $33.7 million.

Democrats also were highly critical of a plan that would transfer $166 million from the state’s school-construction account, funded by timber sales, into the general fund. While some maintain that may be unconstitutional, even though it has been done once before, during a budget crisis some 30 years ago, they also complain it takes money from school construction to pay for K-12 programs — which runs counter to the spirit of the McCleary decision.

Even those Democrats who participated in the dealmaking said they think something has to give. Hargrove said he thought some sort of a tax increase would be needed. And Nelson said, “It has been a very difficult process; it has been a bipartisan process, but at this point in time, I want to make clear, it is not a bipartisan budget. I do not believe the majority of my Democratic colleagues will be able to vote for this … but this is the first step in the process.”

Rs Draw the Line

Sen. Andy Hill, R-Redmond, on the bipartisan budget process: "It is a new way of doing things -- I don't think people have seen it quite like this."

Sen. Andy Hill, R-Redmond, on the bipartisan budget process: “It is a new way of doing things — I don’t think people have seen it quite like this.”

Republicans, meanwhile, are saying they are drawing the line on new revenue, and as far as they’re concerned it’s as good as it gets. They are reauthorizing a complicated procedure that leverages additional Medicaid money, known as the hospital safety net assessment, worth $240 million. That’s technically considered a “fee,” though some view it as a tax. And they are choosing to participate in the expansion of Medicaid programs under the federal Affordable Care Act, which at least in the short term will generate additional money for the state – some $300 million over the next two years. Those two items were hard for some Republicans to swallow. Padden said they are why he voted no, together with the family-planning funding – Padden is among the Legislature’s staunchest abortion opponents.

Where other revenue is concerned, members of the majority caucus are saying no. They balk at the Democrats’ “war on loopholes” and they aren’t about to consider reauthorizing temporary taxes. They also are saying no to two proposals worth about $220 million that appear to have broader support, and which might provide them with bargaining chips later in the process. They are a fix to Washington’s estate tax, which has been partially thrown out by the state Supreme Court, worth about $160 million, and a complicated telecommunications tax deal worked out among phone-service providers, worth about $60 million. State Sen. Doug Ericksen, R-Ferndale, said it was hard enough for Republicans to support the Medicaid expansion and the hospital Medicaid maneuver, and members of the majority caucus voted 25-0 to go no further.

The no-tax stance is a matter of following through with promises, Ericksen said on the floor – a not-so-subtle swipe at Gov. Jay Inslee’s apparent reversal from a perceived campaign promise not to raise taxes. “One of the things we are all focused on is how we can restore trust in the political life here in Washington state,” Ericksen said. “I think the way you restore trust is that if you are going to promise not to raise taxes in order to get the job, you better have a plan to get the job done without raising taxes. And just a few months ago, many of the people running for office on both the third floor [of the Capitol] and the second floor promised not to raise taxes to get the job done, and I believe this budget does that tonight. We are able to get there without doing that.”

Now it’s the Democrats’ Turn

Democrats in the state House will stake out their position when they release their own budget proposal next week, presumably including tax increases and beefier spending. Already there are signs that Democratic leaders will try to keep their members in lock-step. Take the fact that Inslee spent Thursday and Friday calling Democrats into his office to urge them to oppose the Senate proposal. “He’s been talking to anyone who will talk to him,” said spokesman David Postman. “He’s been pretty open about it – it’s a bad budget, the wrong direction.”

A press conference staged by Democrats in the House Friday gave an indication that even though members of their own party negotiated the deal in the Senate, the partisan rhetoric is going to be amped up to 11. Democrats said they can’t blame their fellow Democrats for collaborating with the other team. “Any way you can help influence the budget is a good thing,” allowed Green. But state Rep. Laurie Jinkins, D-Tacoma, complained that the Senate budget is based on “imaginary numbers,” and asked, “Why are we doing these imaginary things in the Senate rather than doing things that bring revenue back to us? So we can do those things rather than throwing grandmothers out on the street, [and saying] that our kids are not going to have the education they deserve and throwing the poor under the bus, which is what this does?”

It is worth noting that five of the seven members of the Senate Democratic Caucus who voted for the Senate budget had reason to resist pressure from their party. Nelson and Hargrove had negotiated the deal, while Sens. Tracey Eide, D-Kent, Brian Hatfield, D-Raymond, and Steve Hobbs, D-Lake Stevens, were the three who accepted gavels from the majority coalition. That left Mark Mullet, D-Issaquah, a freshman senator who in his first term has taken a number of centrist votes with the majority coalition, and Karen Fraser, D-Olympia, who said she voted yes because the deal supported union collective bargaining agreements. Also voting yes were Sens. Rodney Tom, D-Medina and Tim Sheldon, D-Potlatch, the two Democrats whose decision to caucus with the Republicans changed control of the Senate this year.

All in all, the Senate budget stakes out a moderate position and should not be considered extreme, Hatfield said. “For me it is not so much whether it is a bipartisan budget and what it is and what it isn’t,” he said. “As a raging moderate, [I say] this is not a Democratic budget and it is not a Republican budget, and that is a darn good start.”