Lawmakers reach deal, avert government shutdown

OLYMPIA — At long last, legislative leaders reached agreement Thursday on a new state budget, ending talk of an unprecedented government shutdown.

Budget negotiators for the House and Senate shook hands at 10:30 a.m. and an hour later Gov. Jay Inslee announced the deal.

“Government operations will not be interrupted. Washington will be at work Monday,” Inslee said in a 45-second press conference at which he was joined by Democratic and Republican leaders.

Lawmakers said they want to deliver the nearly 500-page spending plan to the governor by 5 p.m. today for its signing.

“We’ve got to get this thing done and signed by the governor,” said Sen. Steve Litzow, R-Mercer Island, a member of the majority coalition steering the Senate.

Success came on the 151st day of the 2013 session, the last 46 in two extra sessions. It meant rescinding layoff notices that started going out Monday to 26,000 state workers. It also means no canceling of camping reservations, suspending of human service and health care programs or halting of the lottery.

An announcement of a deal had been widely anticipated Monday after Inslee said negotiators in the House and Senate had achieved a breakthrough.

But, as it has for nearly five months, an agreement continued to elude leaders of the Democrat-controlled House and the Senate where a coalition of 23 Republicans and two Democrats are the majority.

“It was just a lot of little different issues,” said House Majority Leader Pat Sullivan, D-Covington. “We narrowed it down each day to a few issues.”

House Minority Leader Dan Kristiansen, R-Snohomish, had a front-row seat to the difficult conversations of the final days.

“It was about dollars,” he said. “Also, the ideals and the philosophies that drive the spending of those dollars is what I believe has been the real sticking point between the two majorities.”

Where money goes

The budget calls for the state to spend $33.6 billion in the next biennium, which begins Monday and runs through June 30, 2015. It will set aside $630.3 million in reserves though all but $53 million is tied up in the constitutionally protected rainy day fund

It erases a $1 billion shortfall while pumping an additional $1 billion into public schools, moving the state a step closer to complying with a court mandate to fully fund the basic education of roughly 1 million students by 2018.

“This is a great success to have that first downpayment,” Inslee said. “We’ve got a long ways to go but this is a very, good healthy downpayment that we all have made.”

From the outset, both parties in both chambers sought to reach the $1 billion figure for education but differed immensely on how to spread it around.

Not all the specifics on where the money will go were immediately available Thursday afternoon but the budget pays the state’s full share of transportation costs by the end of the biennium; that’s in the neighborhood of $100 million.

There’s $160 million for learning assistance programs and $10 million for helping schools improving the academic performance of students. There’s going to be several hundred million dollars provided for materials, supplies and operating costs, also known as MSOC.

There’s money for reducing class size and adding teachers to increase the number of hours of instruction in upper grades.

“We still have a lot of work to do in order to establish a statewide system that provides all children the educational opportunities to be successful,” Litzow said. “I am encouraged by the dedication of lawmakers on both sides of the aisle to make important fiscal and policy reforms focused on improving student achievement.”

Higher education is getting an increase in money, too, said Sen. Andy Hill, R-Redmond, chairman of the Senate Ways and Means Committee.

The budget provides $140 million more than the current budget, he said.

Under the deal, tuition would not rise at community colleges and universities for the next two years. However, colleges will be allowed to raise tuition for the 2014-15 school year if they meet certain conditions,

Tax changes

The fight on taxes dominated budget talks all year.

House Democrats, backed by Inslee, pushed for $1.3 billion in new revenue while Senate Republicans opposed all of their proposals.

In the end, the Senate agreed to accept two tax changes that bring in around $245 million for the budget. Those dollars will come from revising rules for estate taxes and ending a tax break for users of landline telephones; both measures were drawn up in response to court cases.

Hill didn’t say why his caucus relented on the measures.

“There’s compromise here, clearly,” Hill said. “It is going to be a bipartisan budget with huge investments in education and a reprioritization of spending that is different from what you’ve seen in the past.”

House Democrats are likely to push some of the same tax measures next year. They said Thursday additional streams of revenue are needed to comply with the Supreme Court’s 2012 decision in the McCleary case.

“The investments in this budget closely resemble those in the budget we passed earlier this year,” said Rep. Ross Hunter, D-Medina, chairman of the House Appropriations Committee. “But the funding of those investments is not sustainable in the future, and we have more work to do to meet our McCleary obligations.”

More details

Most details of the agreement trickled out very slowly Thursday afternoon as the actual budget bill was getting written.

Hunter, Hill and others said the final budget assumes a transfer of $350 million from the Public Works Trust Fund, which is housed in the separate state construction budget. Those are dollars counted upon by cities and counties for sewer and water projects.

It embraces an expansion of Medicaid by making an estimated 300,000 low-income adults eligible for assistance. The federal government will pick up the entire cost and that will save the state as much as $300 million, budget writers have said.

The budget will restore 3 percent pay cuts to state workers and approve collective bargaining agreements with employees of the state and higher education institutions. Both budgets assume savings of $324 million by suspending the cost-of-living raises for teachers required under Initiative 732.

And it also funds a 50-cent an hour increase for 43,000 home care aides, which workers secured through arbitration.

Seafood contention

While the two chambers had grown increasingly close in their levels of spending in recent days, negotiations got jammed on wording of several provisions.

For example, they collided on a study of how much seafood Washington residents eat, the results of which could lead to changes in water quality standards.

Boeing Co. opposes efforts to increase the existing fish consumption figure because it would lead to stricter standards and require costly renovations at the facilities.

The Senate wanted a study completed before tackling the standards while House Democrats and Republicans wanted the survey and rule revisions done simultaneously.

In the end, lingering disagreement on verbiage led to an agreement to exclude the fish study from the final deal.

“From Day One, I said it is going to be a tough budget to put together and had we not engaged in ideological policy bills I think we could have been done earlier but that is what it is,” Sullivan said.

Kristiansen said this year’s negotiations involved a lot more people on the wording of provisions.

“What’s taken so long and the controversial part of this is there was such a difference of opinion on the details of how the money is being spent and the transparency of how the money is spent,” he said.

Jerry Cornfield: 360-352-8623’

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