July 1 budget deadline or government shutdown

OLYMPIA — Gov. Jay Inslee is preparing today for the possibility that lawmakers will fail to reach a budget deal in time to avert a government shutdown.

Inslee will meet with his Cabinet this afternoon to sort out what might happen to public services and state workers if no budget is in place July 1 when the fiscal year starts, a situation that has happened only once before in the state’s history.

“This is uncharted ground,” the first-term Democratic governor said Tuesday. “If there is not a budget by July 1, the law doesn’t allow us to keep government operating fully.”

Attorney General Bob Ferguson also is considering the ramifications of a shutdown.

He’s “convened a legal team to review options should the Legislature fail to meet its deadline to adopt a budget,” said spokeswoman Janelle Guthrie. “The team has been in place for some time and is advising clients on potential scenarios.”

But the leader of the Senate insisted not to worry because the legislative impasse is “not as great as people realize” and an accord can be struck before June 30.

“This talk of a government shutdown is nonsense,” Senate Majority Leader Rodney Tom, D-Medina said. “It is not going to happen. I will say that with certainty.”

Across the rotunda, the lead budget writer for the House GOP caucus concurred though with a slightly less optimistic tone.

“I think we can get to a solution here. I don’t see any scenario that calls for a shutdown of state government,” said Rep. Gary Alexander, R-Olympia, the ranking Republican on the House Appropriations Committee.

Lawmakers ended the 30-day special session Tuesday in much the same place they were when the 105-day regular session ended in April — budgetless and brawling on reforms. The Legislature will begin a second special session today.

There is much discord between the Democrat-controlled House and the Majority Coalition Caucus in the Senate on the contents of a two-year state budget. They’ve labored on how to erase a projected $1 billion shortfall and at the same time inject as much as $1 billion more into public schools in response to a Supreme Court decision.

The two sides inched closer in recent days on how much new tax revenue to include but the Senate’s insistence on three reform bills stymied negotiations.

The caucus wants to put measures on the November ballot to give principals greater authority to reject the placement of specific teachers in their schools and to limit the growth of spending on non-education programs in future budgets. A third bill would allow younger workers to seek settlements in the state workers compensation system.

Inslee blamed the Republican-dominated Senate majority for putting the state on the path to a shutdown by insisting on fulfillment of its “ideological wish list.”

But in a rebuttal, Tom said the three bills sought by the coalition — which comprises 23 Republicans and two Democrats — are good policy not ideological.

Inslee is drawing up contingency plans for an eventuality few have ever experienced in the state.

The only time Washington started a fiscal year without a budget occurred in 1951, a time when the fiscal year began April 1.

Facing a budget deficit, legislators wrangled for weeks over spending cuts and taxes. Ultimately they passed a controversial business tax and adjourned April 5, according to Don Brazier’s “History of the Legislature.”

Opponents of the tax filed suit and in August the state Supreme Court invalidated the tax bill and budget, precipitating a nine-day special session to adopt a budget, according to Brazier’s account.

More recently, Washington lawmakers barely beat the clock in 1991.

The House and Senate approved a budget early June 30 and Gov. Booth Gardner signed it. It was filed at 11:58 p.m.

In 2001, they came close as well. The Legislature adopted a budget on June 21 and Gov. Gary Locke signed it six days later.

On Tuesday, Inslee said his chief of staff, Mary Alice Heuschel, and budget director, David Schumacher, will lead a “very extensive review” to determine which public services may be idled and which cannot because federal law or the state constitution mandate they be provided.

And they must figure how many of the 50,000 state employees could potentially face furloughs and need to be notified in advance under collective bargaining agreements, he said.

The state operating budget funds most government departments and provides the legal authority for them to spend it.

Without a budget, Washington will still have money in the bank July 1. What’s unclear is where its authority lies for spending it and that’s what the staff is researching, Schumacher said.

Not everything is uncertain. Prisons, for example, are not going to be closed and inmates released, Schumacher said. But the ability to keep state parks open is less clear, he noted.

Agencies funded through the transportation budget may not feel the pinch because lawmakers approved and Inslee signed a new two-year transportation spending plan in May.

That should mean Washington State Patrol troopers can continue patrolling the highways, state ferries can keep traversing the Puget Sound and work on highway projects, like repair of the I-5 bridge in Skagit County, proceed unabated. Schumacher said even that is not for certain.

Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com.

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