5 things to watch this week in 2nd special session

OLYMPIA — Washington lawmakers have adjourned both a regular session and one 30-day special session, and now head into the second week of their second overtime session without a budget agreement at hand.

After not passing a single bill during its first special session, the Legislature passed its first two bills this past week as lawmakers seem to be edging closer to a deal on a two-year operating budget that needs to be in place by June 30 in order to avoid a potential partial government shutdown.

Here’s a look at the things to watch for during the second week of the second overtime session:

BUDGET NEGOTIATIONS: Lawmakers still need to address a projected budget deficit of more than $1.2 billion for the next two-year budget ending in mid-2015, not counting additional money needed for a court-ordered requirement that they increase funding to basic education. Gov. Jay Inslee also wants them to come to agreement on a transportation funding package and a construction budget. The Democratic-controlled House and the Senate, which is controlled by a coalition of 23 Republicans and two Democrats, have been locked in budget negotiations for several weeks, with the main disagreements centered around revenue and a handful of policy bills. An agreement overnight Thursday, and signed into law by Inslee early Friday, on an estate tax bill was the first significant agreement on budget issues. That measure, a legislative fix to a ruling that could have resulted in millions of refunds issued to estates, saved $160 million for the budget plan lawmakers are currently trying to reach agreement on. Negotiations continue this week.

REVENUE FORECAST: On Tuesday, lawmakers will receive the quarterly revenue forecast by the Economic and Revenue Forecast Council. They hope projections will be optimistic, and may help lessen the gap a bit between the House and Senate if it appears there’s more revenue to spend. Nobody expects that the forecast will solve the state’s budget woes.

POLICY BILLS: The Senate majority had been seeking movement on a handful of policy bills in exchange for acceptance of some revenue in any final budget. The Senate vote on the estate tax bill came immediately after the House quickly passed a measure dealing with environmental cleanup funds. That measure was also signed into law by Inslee Friday morning. The Senate also passed a wide-ranging education reform bill Thursday night that is now being considered by the House. That bill, and another bill dealing with workers’ compensation settlements, are still in the mix, but Senate Majority Leader Rodney Tom on Friday said that two other bills — a bill on giving principals the option of rejecting teachers who are appointed to their schools and another measure that place limits on the rate of growth for non-education spending in the state budget — are likely off the table.

GOVERNMENT SHUTDOWN: Washington state agencies are working to identify which areas of government will need to cease operations if the Legislature fails to pass a budget by June 30, when the current budget cycle ends. Inslee held a cabinet meeting Wednesday to discuss contingency plans. While the Office of Financial Management hasn’t concluded which areas would need to shut down, officials said potentially thousands of state employees could begin getting notifications about the prospect of temporary layoffs as early as this week. Agencies were given a 5 p.m. Monday deadline to identify programs that they feel should be exempt from a government shutdown and why. Washington state has never had a government shutdown, but the Legislature has taken its budget talks to the brink before. In 2001, lawmakers finished the budget on June 20; in 1991 then-Gov. Booth Gardner signed a budget just moments before midnight on June 30.

IMPACT ALREADY FELT: Legislative inaction has led Washington State University to put off plans to expand its course offerings in Everett until fall 2014. In a letter to the Everett mayor last Wednesday, WSU President Elson Floyd said the university has been waiting for the state budget to be finalized before it opens electrical engineering, communications and hospitality management programs in Everett. Although every legislative budget proposal officials have seen appears to give the university enough money for the expansion, Floyd said they can’t start recruiting students until they know the final plan.

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