Lawmakers ended their session Friday without agreeing on a 2015-17 operating budget, a transportation package, or recreational marijuana reforms. As Gov. Jay Inslee calls them back to Olympia, what will be different?
OLYMPIA — Hands outstretched, chief GOP budget writer Sen. Andy Hill stood just off the state Senate floor last week, talking Budget Negotiation 101.
“When we negotiate, they have a spending level, we have a spending level, and guess what?” said Hill, a Republican from Redmond, as he collapses his palms into a sort of prayer position. “You end up in the middle.”
It sounds so easy — except when it isn’t.
Lawmakers ended the year’s legislative session Friday without agreeing on a 2015-17 operating budget, a statewide transportation package, or reforms to the recreational marijuana system.
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Gov. Jay Inslee has called them back for a special session to start Wednesday, and is bringing in Hill, his Democratic counterpart, Rep. Ross Hunter of Medina, and a few others Monday to try to kick-start budget negotiations.
But what really puts the “special” in special session this year is the state Supreme Court. Last autumn, justices found the state in contempt for not developing a plan to fully fund K-12 education per the state constitution. This week, the state Attorney General’s Office is expected to file a report to the court explaining the Legislature’s progress on that — or lack thereof.
In the meantime, Democrats and Republicans remain divided over funding teacher pay, state worker raises and reforming local property-tax levies.
Before formal budget talks can start, Hill demands that Democrats pass the $1.5 billion in proposed tax increases that fund the Democratic House’s $38.8 billion proposed budget — to prove that they have the votes for it.
Democrats claim the GOP Senate’s proposed $37.8 billion budget won’t adequately fund government and want Hill to sit down with them and work through the budget to determine the cost.
As the clock ticks toward July 1 — when the state needs to have a new budget — lawmakers must find a way past the partisan acrimony that has gripped the Legislature these past few weeks.
But on the eve of the special session, the budget writers say they don’t see much movement.
“Nothing changes,” said Hunter. “Andy has a set of conditions he’d like us to do, even though he absolutely will not consider those [tax] bills.”
“It’s a little Kafkaesque,” Hunter added. “It’s a little absurd.”
“We’ve done our job,” said Hill. “If the governor signed our budget tomorrow, guess what? Government runs.”
The “Ross and Andy show,” as Hunter once called it, is going into overtime.
“A difficult drill”
Like Hill, the governor has also been talking Budget Negotiation 101.
“The House is going to have to find a way to reduce spending,” Inslee, a Democrat, said last week in a news conference. “And the Senate will have to add revenue.”
Then, Inslee called on lawmakers to fully fund K-12 education per the McCleary decision, fund state worker pay increases and teacher cost-of-living adjustments, and pay for early education and mental-health programs. Those are likely places where Democrats would have to agree to some cuts.
The court’s McCleary decision added billions of dollars of spending that lawmakers must find for all-day kindergarten, smaller K-3 class sizes, and materials and operating expenses by a 2018 deadline. Other court decisions have pointed out the egregious results of state underfunding for mental health — like strapping psychiatric patients to hospital beds for prolonged periods without psychiatric care — and forced lawmakers to reckon with those lapses.
“The demands that the courts have placed on us on mental health and K-12 alone certainly make it a difficult drill,” said Senate Majority Leader Mark Schoesler, R-Ritzville.
To fund those and other services, Democrats are proposing tax increases — a capital-gains tax on investment income, a business-and-occupation tax increase on some services like doctors, architects and lawyers, closing some tax exemptions and finding a way to collect more sales-tax revenue online. Those proposals would raise about $1.5 billion in new revenue.
Republicans insist the $3 billion more in projected revenue from existing taxes this budget cycle should be enough to cover K-12 education, mental-health programs and other needs. Taxes, Hill has said, should be the last resort.
As if those disagreements didn’t present enough of an obstacle, lawmakers this year will need more than a simple 50-percent-plus-one majority to forge a budget.
Voters in November passed Initiative 1351, a measure to reduce K-12 class sizes, but lawmakers have said there’s no way they can find the additional $5 billion through 2019 to fund it. But legislators need to have a two-thirds majority in both chambers to alter I-1351.
Teachers are not happy about that scenario. About 4,000 educators and supporters gathered Saturday outside the empty Capitol building and called on lawmakers to fund education costs — including teacher pay raises and I-1351.
Inslee spoke at the rally, as did Sen. Cyrus Habib, D-Kirkland, who had a different “last resort” in mind than Republicans.
“Reversing the vote that the people took in November,” Habib told the cheering crowd, “that’s the last resort.”
“A bit of a concern”
Special sessions are neither rare nor free. The 2001, 2003, 2011 and 2013 sessions — all budget years — have required a 30-day special session in the spring. The 2013 spring special session cost $186,155 just for the Senate, according to state records.
Absent formal budget talks, Hunter and Hill in recent weeks have kept discussing issues that relate to the budget but aren’t at its core — recreational marijuana reform, for example, including rules for locating pot stores and changes to the tax structure. Each little agreement the parties can find brings lawmakers one step closer to a big agreement.
“The fewer moving parts you have,” said Hunter, “the simpler this project is.”
Which raises the question of whether last week’s failure to push through changes in the recreational marijuana system — which lawmakers from both parties had hoped to achieve by the regular session’s end — is a bad omen.
“That’s a bit of a concern,” Hill said.
“I don’t know how to scale the overall badness of it,” Hunter said.
On Monday, about 20 people — Inslee, Hill, Hunter, other lawmakers and staff — will sit down together in an effort to restart talks. Inslee says he won’t suggest specific compromises for either party, but “we do want them to, the extent possible, to explore methods of negotiation.”
“So that Wednesday when the rank-and-file returns,” Inslee said. “Perhaps they’ll be in a position to make significant offers.”