Today is the first day of a 30-day special session of Washington Legislature to resolve a long list of disputed 2015-2017 budget issues.
That means ... very little.
So far, the Republican-controlled Senate and Democratic-dominated House are $800 million apart — a $38 billion GOP budget proposal and a $38.8 billion Democratic budget plan. But internally, the two plans are structured in dramatically different ways. Also, the Democrats want to raise $1.5 billion with new taxes, tax hikes and closing tax breaks, mostly to pay for $1.4 billion in educational improvements mandated by the state Supreme Court. The GOP believes $1.3 billion is needed and that the money is already in the state’s coffers. So, the Republicans oppose the entire tax package.
Last Friday was the final day of the regular legislative session. Gov. Jay Inslee ordered the negotiators to return on Monday to try to kick stalled talks back into motion, with the full Legislature to return today.
In terms of action, today will merely see the negotiators brief their caucuses this afternoon. Then, the talks will go back behind closed doors with periodic detailed updates to the caucuses, plus vaguer public updates to the press. This routine could last for several weeks.
A public discussion will be held Thursday when the House Appropriations Committee will be briefed on the Senate Democrats' proposals to pay for the Washington Supreme Court's education mandates, along with a proposed restructuring of the state's taxes for education. The committee will also hold a public hearing Thursday on a bill by its chair, Rep. Ross Hunter, D-Medina, to tackle teachers' salaries and school levy structures to help meet the Supreme Court’s orders.
If the Republicans and Democrats don't resolve their differences by June 30, the state government will partially shut down on July 1 due to a lack of a 2015-2017 budget. The Legislature dodged that scenario by only three days in 2013.
There are big differences between the budget stances of the two sides.
A major plank of the 2012 Supreme Court ruling on fixing education is to overhaul Washington’s school revenue system, both to increase it and to make it more stable. The GOP wants to do this with a property tax reform package — phasing up the amount of state property taxes paid while phasing down the amount of local property taxes. The idea is to provide a uniform funding source for the state’s richest and poorest school districts. It would raise property taxes in roughly 40 percent to the state’s school districts while shrinking that rate in roughly 60 percent.
Meanwhile, the Democrats have proposed a 5 percent capital gains tax on the state’s wealthiest 32,000 people to raise a significant chunk of the education money. An alternative Democratic proposal surfaced recently to install a 7 percent capital gains tax on the wealthiest 7,000 Washingtonians.
The Democrats hate the property tax reform proposal. The Republicans hate the capital gains tax concept.
There’s one other potentially important factor lurking in the debates about how to raise more revenue. That’s the proposal from the governor to tax the state’s biggest carbon emissions polluters. The plan never got out of the House Democratic caucus because its leaders could not line up the 50 votes needed to guarantee passage. However, if the House Democrats were to get solidly behind the Democratic governor’s concept, it could change the dynamics of the budget negotiations.
On the spending side, the Republicans want to install some type of statewide salary system for teachers, with adjustments for the cost-of-living in different area. Teachers would not be allowed to collectively bargain with the state for their basic salary arrangements and amounts. Democrats oppose those proposals.
Haunting the Legislature is Initiative 1351, which the state’s voters passed narrowly last November. It requires dramatic reductions in teacher-student ratios in Grades K-12. It has been expected to cost an extra $2 billion for 2015-2017 – money the state doesn’t have.
Both Republicans and Democrats want to limit the I-1351 work to Grades K-3 in 2015-2017. But Republicans’ want to send I-1351 back to the ballot in November for a new vote on the matter. Democrats want to collect a two-thirds majority in both the House and Senate to repeal the measure.
