The latest forecast of tax collections will be released Wednesday and is the final nugget of data House and Senate budget writers need to finish drawing up their respective two-year spending plans.
Collections are expected to be down. When combined with unanticipated increases in Medicaid costs, the state may be facing a gaping $1.5 billion hole in the next biennium.
Then there's education to deal with.
Last year, the Supreme Court found lawmakers in violation of the state constitution for not providing enough money for the basic education of students from kindergarten through 12th grade. Justices want to see progress in the form of a down payment in this next budget.
"The conversation has already been taking place," said Sen. Barbara Bailey, R-Oak Harbor, a member of the Senate Ways and Means Committee, which will produce a two-year spending plan in early April.
"When the final analysis comes out, we will have put more money into education," she said. "This is a big week. Until you know what your resources are going to be, it's very difficult to go forward."
Republicans and Democrats alike say they are ready to set aside more money in the 2013-15 budget than in the current one. But they differ on how much and where it will come from.
Republicans contend they can erase the deficit and boost school funding without raising new taxes or extending existing ones. House Republicans put out a proposal last week to inject roughly $800 million into basic education in the next two years but they do not suggest where cuts in other areas will be made to cover that amount.
In the Senate, where Republicans dominate the Majority Coalition Caucus, there is no support for new taxes but a few members may back the closing of tax loopholes to generate cash.
"We think we can get between half a billion and a billion and a half of new money into K-12," said Sen. Steve Litzow, R-Mercer Island, the chairman of the Senate education committee.
"This is what is going to make Wednesday interesting," he said. "I can fund education. I can't fund anything else. The real question is how do you fund the non-education stuff?"
Litzow insisted the court ruling, known as the McCleary decision, is not simply about a sum of money but also about making changes that boost the achievement of students.
That's why they intend to invest most significantly in programs which aid minority students of low-income families who perform worse than their peers, he said.
"We don't solve for McCleary," he said. "We solve for better student achievement. We solve for better student learning,"
Democrats in the House and Senate are seeking $1.4 billion to $1.7 billion for schools -- after erasing the shortfall.
"You need to make an investment," said Sen. Rosemary McAuliffe, D-Bothell, the ranking Democrat and former chairwoman of the Senate education panel. "You have to fund the reforms that are on the books now."
Democratic leaders in both chambers have been saying they see no way to balance the budget, establish a reserve and respond to the McCleary decision without a mix of spending cuts and new revenue. Closing tax loopholes -- an idea they support -- won't be enough.
Some Democrats want to extend a temporary tax on beer and a temporary surcharge on lawyers, accounts and other professionals that are scheduled to expire June 30. But their party leaders are holding off from endorsing any specific revenue proposal.
Though raising or extending taxes no longer requires a supermajority vote, they said doing so remains politically difficult because the public liked the bar set high.
"Voters want us to be reasonable. We'll be reasonable," said Rep. Ross Hunter, D-Medina, the chief budget writer in the House.
Jerry Cornfield: 360-352-8623; email@example.com.
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