Gov. Jay Inslee has ordered a second-30-day special session to begin Friday in order to resolve sluggish talks on the 2015-2017 budget for Washington. And Inslee ordered that House Democratic and Senate Republican budget negotiators meet face-to-face daily in his conference room starting Monday — instead of sending paper proposals back and forth.
“We all need to move to the middle for some common sense answers,” Inslee said.
Starting in late March, the House Democrats proposed spending $38.8 billion for the main state budget; Senate Republicans suggested an almost $38 billion plan. The two sides have significant unresolved differences in how the proposals are structured, including which money comes from where. In broad strokes, though, the Democrats look first at what needs to be done, and then they adjust revenues and appropriations to those needs. Republicans first look at what revenue is available, then adjust appropriations to match that income.
The GOP proposes some budget shifts to make its plan work. But Democrats say those shifts are one-time measures that will create problems in 2017, when the Legislature tackles another biennial budget. The Republicans contend that the Democrats’ original call for $1.5 billion from a new capital gains tax, an increase in some business-and-occupation taxes and the closure of some tax breaks would hurt businesses and people.
A mid-May economic forecast predicted that the state will collect $367 million in 2015-2017 in previously unexpected tax income. And the federal government is appropriating an extra $115 million to the state government. Consequently, Senate Republican negotiators said Thursday that an extra $482 million eliminates much of the Democrats’ case for new taxes.
“That $500 million allows us to pretty much come to the middle,” said Sen. John Braun, R-Centralia.
Also in a proposal sent Thursday to the House Democrats, the Republicans trimmed their plan to shift $200 million from the Public Works Account, usually focused on capital projects, to the main state budget fund, which actually provides the $38 billion to $38.8 billion. The GOP has cut that shift to $100 million.
And the Republicans now agree to back all $583 million worth of pay increases for state employees that were negotiated between the Inslee administration and the unions. Previously, the GOP wanted to cut that pay package by $75 million. However, the GOP is now pushing a bill to open government negotiations with unions to the public in the future and to create a formula for limiting the amounts of future pay raises.
On Thursday, Inslee portrayed the new Republican proposal as a significant move toward compromise, even though he still disagrees with many portions of it.
Inslee and Democratic leaders said Thursday that the extra $482 million justifies a decrease in their sought-after new tax revenue. However, they also said the Republicans’ proposal falls short in paying enough for teachers’ cost-of-living raises when compared to other state employees’ cost-of-living raises. The Democrats still don’t like shifting $100 million from the Public Works Account. And they criticized the Republican package for having $65 million in unidentified cuts in state spending.
The House Democrats plan to publicly unveil a new budget proposal on Monday, and to hold a public hearing on it Tuesday. Democratic leaders declined to provide details of the proposal at a Thursday press session.
One of the remaining sticking points is that Republicans are vehemently against any new tax-related revenue. The Democrats argued that such new revenue is needed to meet the state’s obligations without leaving problems festering until the 2017 budget talks.
“It’s Pollyannaish to think you can do all of this with twinkle dust,” Inslee said.
GOP budget negotiator Sen. Andy Hill, R-Redmond, said, “The message from the voters is very clear: If you raise taxes, you need a good reason for doing it.” Hill believes the Democrats have not made that case.
