OLYMPIA – A dispute between two powerful King County lawmakers appeared Wednesday night to have killed a key transportation bill that would have sped up construction of a carpool lane on Interstate 5 through Everett.

Despite efforts by Gov. Gary Locke, Sen. Jim Horn, R-Mercer Island, and Rep. Ed Murray, D-Seattle, could not end their deadlock that has kept the Legislature from acting on a supplemental transportation budget that contained language to begin the I-5 high occupancy vehicle lanes project in 2006 rather than 2008.

"It’s dead," a dejected state Sen. Mary Margaret Haugen, D-Camano Island, said of the bill Wednesday night.

Horn and Murray, who chair the transportation committees in the respective houses, couldn’t settle their differences on how the Regional Transportation Investment District raises money for road and transit projects in King, Pierce and Snohomish counties.

The Senate approved changes to the taxing district Wednesday. The bill now goes to the House, which will consider accepting or rejecting the changes.

The changes that the Senate approved included increasing the amount of money the transportation district would collect, possibly easing tensions between Seattle and King County over whether the transportation district should build more roads or create more transit.

"It’s really been frustrating," state Sen. Mary Margaret Haugen, D-Camano Island, said, describing the fight as one between the interests of Seattle and King County. "I’m trying to be a peacemaker. We have two chairmen who don’t see eye-to-eye. Lacking a miracle, we’ll have to start all over again next session."

Funded by the 5-cent per-gallon gas tax the Legislature approved in 2003, the Everett I-5 project will add a carpool lane from the Boeing freeway north to U.S. 2 and an all-purpose lane from 41st Street SE to U.S. 2. Work will be done on both northbound and southbound lanes.

Starting, and finishing, the I-5 project sooner will help ease tie-ups for daily commuters. Also, it would ensure the targeted stretch of highway is not ripped up and hampering travel for those driving to Vancouver, B.C., for the 2010 Winter Olympics.

Accelerating the timetable also enables community leaders to follow through on a pledge to the Boeing Co. in talks on the incentive package to have the 7E7 jets assembled in Everett.

Also at risk is money for a bypass that would keep big trucks away from the heart of Granite Falls and a proposed 50-cent increase in vehicle license fees to pay for security on the state’s ferries.

Lawmakers are scheduled to wrap up their 60-day session tonight.