With billions to cut, state budget negotiations begin

OLYMPIA — All the budget cards are on the table and now come negotiations on which ones get played.

Democrats in the House and the Senate along with the governor have laid out moves they’d make in covering an unprecedented $9 billion budget shortfall in the next 28 months.

The Legislature’s majority party and Democratic Gov. Chris Gregoire will spend many hours in the legislative session’s remaining 25 days soldering together a final agreement.

Conversations won’t be all that fun. None of them have liked the plans they’ve put forth because each slashes funding of public schools, colleges, human services and health care programs — all core ideals of the Democratic Party.

“I think we have to triage at this point and take the best of what’s in our means,” said Rep. Brandon Williams, D-Olympia.

House Democrats released their spending plan Tuesday, one day after their Senate counterparts and nearly four months after the governor.

The House proposal spends $31.4 billion and stashes $850 million in reserves in the two-year budget starting July 1. Budget writers said they are cutting $4 billion in spending in the plan.

They cover the rest of the shortfall with federal stimulus dollars, transfers from the capital construction budget and other state accounts such as the lottery, rainy day emergency reserves, and revenue from tax and fee changes.

“Nothing was totally spared,” Rep. Kelli Linville, D-Bellingham, the House chief budget writer, said in a prepared statement. “We tried to be surgical about the cuts, but the sheer size of the hole forced us to make very tough decisions.”

It will make for difficult negotiations on a final product.

When Gregoire’s budget came out, she faced a $6 billion gap between the amount of expected revenues and the anticipated cost of continuing to run government as Democrats desired.

Now, the state is projected to see $2.9 billion less in tax receipts.

“The governor’s budget was the most compassionate of the three templates and she was dealing with a separate reality,” Williams said.

Funding of public schools is where some of the toughest conversations will occur.

Budget writers in the House and the Senate incorporate federal stimulus dollars in fundamentally different ways. They’re confusing each other now, and that may slow their ability to find agreement.

Part of the federal money can be spent only on special education or Title I programs for students of low-income families.

Another chunk of it comes with no strings and can be poured into almost anything — raising pay, reducing class size, buying library books.

Sen. Rosemary McAuliffe, D- Bothell, said the Senate considered how much districts receive in the nondiscretionary funds and then sought to spread the latter dollars evenly among school districts statewide so “there are no winners or losers.”

When all the calculating is done, every district will end up receiving about 2.5 percent less from the state in the next budget than this one. That amount may sound small, but the dip could lead to 2,000 to 3,000 teachers losing their jobs, she said.

“I’ve looked at all 295 districts and what it means for them. Now I will look at the House plan and see what the impact of their budget is on those districts.”

House members contend their plan deals with the money in a clearer fashion.

They don’t calculate special education and Title I money into allocations for districts. They focus only on the discretionary dollars, putting most of them into reducing class size under Initiative 728.

House budget writers slash $750 million in I-728 funding and then add back $260 million in federal aid.

The result is a 55 percent reduction overall, a cut that is half as large as the Senate’s and more than twice as large as the governor’s. It may cost up to 3,000 teachers their jobs, said Rep. Kathy Haigh, D-Shelton.

It’s not the only pain the House inflicts on public schools. Teachers will lose their two professional development days and get no cost-of-living adjustments, though some will earn step increases for additional education and years of service.

Gregoire, who proposed her budget before approval of the federal stimulus package, is poised to preserve as many public school dollars as possible.

“The hard negotiating now begins,” said Glenn Kuper, the governor’s budget spokesman. “She feels that if we want quality education in our state, we must be prepared to pay for it.”

Higher education is another point of divergence.

Gregoire proposed $372 million in cuts, offset partly with tuition hikes of 7 percent for universities and 5 percent for community and technical colleges. The House cuts $683 million while supporting higher tuition increases — 10 percent and 7 percent, respectively. Neither eliminates enrollment slots.

Democratic senators hack $613 million from higher education after assuming the same boost in tuition as the governor and adding in $100 million in federal money. About 3,200 enrollment slots a year would be lost. Layoffs will result in any of the three scenarios.

There are areas of agreement in the proposals.

Teachers and state workers receive no pay raises. Enrollment in the Basic Health Plan is frozen and up to 45,000 low-income people may be lose out on the state-subsidized health care program.

Another similarity between the House and the Senate is their desire to keep state parks open by raising $28 million from a $5 fee paid by car owners when they renew their license registration each year. This fee would not be mandatory, but car owners would have to check a box to opt out of paying.

Both budgets call for more than $60 million in savings by reducing or eliminating community supervision for some nonviolent offenders. But neither the House nor Gregoire proposes closing the 1,292-bed McNeil Island Corrections Center as the Senate desires.

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