Signs of progress, but no firm budget deal

OLYMPIA — Gov. Chris Gregoire and Democratic and Republican lawmakers negotiated for hours Monday in hopes of reaching agreement on a balanced budget and government reforms before time runs out in the special session.

It remained unclear late Monday if the marathon talks resulted in a deal lawmakers could approve Tuesday, the last scheduled day of the extra session.

Senate Majority Leader Lisa Brown, D-Spokane, said shortly after 8 p.m. that party leaders and budget writers had a framework to resolve differences which have stalemated the Legislature for much of the 30-day special session that ends Tuesday.

However, a half-hour later, Republican leaders from the House and Senate left the negotiations to speak with their caucuses without confirming what Brown said.

When Senate Republicans emerged from their caucus around 10:15 p.m., members were adamant no agreement was in hand.

“We don’t have a deal. I don’t know of any deal,” said Sen. Mark Schoesler, R-Ritzville. “It’s not out of reach. It just hasn’t happened yet.”

Meanwhile, the House adjourned just after dinner while senators remained at their desks anticipating they would be voting on bills at some point. Frustration ran high among Democratic senators.

“If we don’t get it tonight, it’ll be another 30 days,” said Sen. Mary Margaret Haugen, D-Camano Island.

Without an accord, Gregoire would have to decide soon whether to bring legislators back or proceed with across-the-board cuts in spending by state agencies to plug a projected $500 million budget gap.

Prospects of a third special session to solve a festering shortfall in the two-year budget appeared to motivate party leaders in the House and Senate and the governor Monday. They began meeting in Gregoire’s office at 12:30 p.m. and negotiated into the evening, taking breaks for food and to brief members of their respective caucuses.

Gregoire initiated the talks by offering what her staff described as a possible ‘go-home’ proposal.

“Good compromise,” Brown said hours later, adding it appeared to have enough support in all four caucuses to get it through.

While party leaders and budget writers huddled behind closed doors, many House members awaited word at or near their desks on the floor.

“We’re hoping. We’re staying,” said Rep. Hans Dunshee, D-Snohomish. “We’ll be here around the clock if there’s hope.”

Optimism has been in short supply in the overtime session that began March 12 after lawmakers failed to agree in the 60-day regular session on how to re-balance the budget and make major reforms in several government programs.

Solving the budget problem has vexed lawmakers for some time. Gregoire called them into special session in late November to confront what was then a $2 billion deficit. With cuts and transfers they erased about a fourth of the shortfall.

In mid-February, better-than-expected revenues and a drop in demand for state services left lawmakers facing a $500 million hole plus whatever they set aside in reserves.

Since then, lawmakers have been stuck.

House Democrats, who hold a 56-42 majority, passed a budget plan while 22 Republicans and three Democrats united to pass a much different version in the Senate. This coalition of senators also insisted several major reforms be approved before it would be willing to act on a new budget and House Democrats opposed most of them, creating a stalemate Gregoire sought to break Monday.

By Monday, the list had been narrowed to three: eliminating early retirement options for state workers hired after July 1, a consolidation of health insurance plans for public school employees and a requirement that lawmakers balance the state budget for up to four years at a time.

“The longer people are talking, the better,” said state Sen. Jim Kastama, D-Puyallup, one of the three moderate Democrats aligned with Senate Republicans on budget and reform matters.

The state Senate did make some progress Saturday by passing versions of two of the reforms sought by Senate Republicans and moderate Democrats.

On a 29-17 vote, senators approved a bill aimed at improving health insurance coverage for all public school employees.

Presently, health insurance plans are offered on a school district-by-school district basis for teachers and classified workers. Sen. Steve Hobbs, D-Lake Stevens, authored a bill to consolidate the number of plans and push most of the workers into a state-run system.

However, the bill passed Saturday allows school districts to continue offering coverage for their teachers and classified employees under certain conditions. For example, the plans must establish employee premiums for full family coverage that are at most three times the cost of premiums for individuals.

Districts that fail to comply with the different requirement could have their employees placed in the existing health insurance program for state workers.

Also Saturday, senators approved legislation to require the state’s two-year budget to be in line with anticipated revenue over a four-year period. This measure, championed by Kastama, cleared the Senate on a 30-16 vote.

What didn’t pass Saturday was a bill to eliminate early retirement options for some state employees. After a rancorous debate, senators deferred action.

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

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