Insiders Say Deal is Near in Budget Talks

By Brad Shannon, The Olympian, Olympia, Wash.

Mar. 4–With less than a week left to go, majority Democrats in the Legislature say they’re close to a budget agreement that leaves as much as $950 million in cash for next year’s needs while cutting taxes by $60 million or more for business interests this year. “Our third proposal just went over” to the Senate, House Majority Leader Lynn Kessler of Hoquiam said Friday, predicting a budget deal will be final by Sunday. The Senate’s budget-writing vice chairman, Sen. Mark Doumit, D-Cathlamet, also thinks Sunday is likely. Thursday is the session’s 60th and final day, and the operating budget is the biggest piece of unfinished business in a supplemental budget year that already has seen big achievements — everything from passage of a gay rights bill to approval of medical liability reforms and a major Eastern Washington water-storage agreement. All week long, Democrats in the Senate and House swapped proposals and counterproposals as the top negotiators inched closer to agreement on a supplemental budget plan for the 15 months left in the two-year budget cycle that ends in June 2007. Details of the talks have been virtually inaudible, contained by what one social services advocate called a “cone of silence.”"There’s nothing to say,” insisted Senate Ways and Means Committee Chairwoman Margarita Prentice, D-Renton, at one point during the week. The top House budget writer, Democratic Rep. Helen Sommers of Seattle, said the goal is to set aside $950 million in several accounts for 2007. That includes roughly $300 million for pensions, $200 million for education and $100 million for debt service, she said. How to help students pass the WASL, a high-stakes graduation test required of 10th-graders this year as a condition for high school graduation, is among the disputes to settle. Gov. Chris Gregoire had proposed $38.5 million for remedial education, but the Senate allocated a portion for a teacher’s planning day and the House favored an approach more like the governor’s. The House and Senate are moving toward agreement that is likely to delay the planning-day funding in favor of Gregoire’s approach, according to Sommers and one key senator. Other questions deal with how many new slots to add to the Basic Health Plan, which provides subsidized insurance for the working poor; how many thousands of children of noncitizens to add to a special immigrants health program; how much money to add to K-12 education programs; and how many tax breaks to grant. The tax breaks could be the last piece to fit into the budget, because the amounts might be resized according to the spending needs. The House proposed $55 million worth of tax breaks, while the Senate proposed about $51 million. Seattle Rep. Jim McIntire, the Democrat who leads his caucus on tax issues, said many of the taxes from both chambers might survive but “some of them can be squeezed” for a final agreement. The favorable tax treatments ultimately could cover such industries as aerospace, aluminum smelting, forest-products manufacturing and movie productions. They also cover such things as canned salmon, buildings for biotech and medical device manufacturers, farm machinery replacement parts, real estate excise taxes paid by military personnel forced to sell and transfer, syrup used by restaurants for soda pop, solar hot-water equipment and equipment to control dairy manure. The two chambers’ proposals in a few cases were identical. But some requests, including a timber-manufacturing tax break, cleared only one chamber. One analysis by the Economic Opportunity Institute in Seattle pegged the tax loss at close to $94.6 million this year if all were to pass, with the cost soaring to $194.6 million in the next budget cycle. Republicans, meanwhile, say they are in the dark, fearing the worst from Democrats in what has been the dominant party’s session all year. “I haven’t heard anything about it,” Sen. Joseph Zarelli, R-Ridgefield, top minority on the budget, said of the ongoing budget talks. He has sent e-mails to his Democratic counterparts offering suggestions, but hasn’t gotten feedback, he said. Zarelli and his House counterpart, Thurston County Republican Rep. Gary Alexander, both said the budget at best leaves the state with a $600 million shortfall in 2007. Both scoffed at Democratic statements that the budget saves more than $900 million for the next budget cycle. The Republican said that Democrats, by putting much of the $900 million into special expenditure accounts, in effect are raising the legal spending limit for the next budget cycle by setting a higher base this time. Zarelli said the limit rises by $1.2 billion next year.

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Copyright (c) 2006, The Olympian, Olympia, Wash.

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