Democrats and Republicans agree to spare education from state budget cuts, but a final budget deal remains elusive.

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OLYMPIA — Republicans and Democrats have agreed to not cut education funding, but otherwise remain far apart on how to close a roughly $1 billion shortfall in the state budget.

Gov. Chris Gregoire sees so little sign of progress on the major sticking points she’s threatened to veto bills if lawmakers don’t compromise and deliver a budget soon.

“If they don’t get something done here, I’m going to start trickling out vetoes,” she said at a news conference Thursday afternoon. “Maybe that will get their attention.”

Gregoire was particularly angry Senate Republicans released a new budget proposal Thursday without letting her, or Democratic leaders in the House and Senate, know in advance.

While Democrats hold majorities in both chambers, Republicans seized control of the budget process in the Senate earlier this month, with the help of three conservative Democrats. They passed a budget different from Democratic proposals with a 25-24 vote and have retained numerical control in the Senate ever since.

The governor said she wants budget writers negotiating face to face instead of through the media.

For their part, Republicans have accused Democrats of refusing direct negotiations and said the new budget was an attempt to jump-start the process. They noted the proposal contains several things Democrats want, particularly when it comes to education.

“What we’ve tried to do is draft a compromise approach here,” said Republican Sen. Joe Zarelli, the architect of the GOP budget.

House and Senate Democrats earlier agreed to no education cuts and criticized the original GOP plan for making about $74 million in cuts to K-12 and higher education.

The new Republican budget dodges cuts to education, in part, by leaving less money in reserves.

The original Republican budget left about $500 million in reserves. The new one leaves $437 million in the bank and limits overall spending in the current two-year budget to about $30.7 billion.

Senate and House Democratic leaders applauded the move. “I think it helps move the process along. They’ve shown a willingness to move,” said Senate Ways and Means Chairman Ed Murray, D-Seattle.

But there were other parts of the proposal that Democrats weren’t happy with, including an effort to revive the charter-school debate by including money for 10 charter schools statewide.

Gregoire said she told Republicans they were wasting their time on that one. “I told them I will veto it. Get over it,” she said.

And there’s been no progress on the biggest sticking point in the budget, namely whether to skip or delay certain payments as a way to free up money for state services.

Democrats have proposed delaying a monthly payment to K-12 schools by a day, pushing it into the next two-year budget and saving $330 million in the current biennium.

Groups that include the Washington Association of School Administrators and the Washington Education Association (WEA), the state’s largest teachers union, support the move. “That’s preferable to cuts in funding,” said Rich Wood, a spokesman for the WEA.

Seattle Public Schools officials said a one-day delay in funding would not create problems for their district. The Democratic proposal sets up a $10 million contingency fund to handle potential cash flow problems for districts statewide.

Republicans oppose the delay, arguing it would contribute to a shortfall in the next budget cycle.

The GOP, however, has proposed skipping a $133 million payment toward funding older, closed pension plans for teachers and state workers.

They tie that move to provisions ending early-retirement options for new employees in the largest pension for state workers and teachers. Currently workers in the plan can retire at age 62 with full benefits if they have 30 years of service.

Republicans say getting rid of the early-retirement options would save the state $1.8 billion over the next 25 years. The state actuary’s office said it has not completed a final analysis on the proposal and could not confirm the savings.

Senate Democrats on Thursday would not rule out the GOP pension proposal, but House Democrats said it would not survive there.

House Majority Leader Pat Sullivan said there was a lot of concern in his caucus about skipping the pension payment and ending early-retirement options.

While Democrats and Republicans have expressed outrage over each other’s proposals, they’re nothing new.

The Legislature approved delaying a $128 million payment to public schools last year to save money. And lawmakers have skipped pension payments at least twice in the past, including in 2003 and 2005.

Andrew Garber: 360-236-8266 or agarber@seattletimes.com