In Olympia, not much talking in state budget talks — and clock is ticking

OLYMPIA — The chief Democratic and Republican budget writers have been meeting to discuss negotiations on the state’s 2015-17 operating budget — but there isn’t much to say.

With just a week before the legislative session officially ends next Sunday, talks have broken down over bridging the gaps between the two parties’ widely different perceptions of how to fund education, social programs and other government basics.

Democrats are calling for $1.5 billion in new revenue, mostly through a new tax on some capital assets and an increase in part of the state business-and-occupation tax.

But before negotiations can begin, Republicans insist the Democratic House take floor votes and pass those tax bills. Otherwise, Sen. Andy Hill, R-Redmond and chief GOP budget writer, the Democrats are just talking about “phantom money.”

“It’s all about setting the bargaining points,” Hill said Saturday.

Democrats see it another way.

“We met with the Senate Republicans. They said very strongly that they would not pass either a capital-gains or a B&O tax,” House Majority Leader Rep. Pat Sullivan, said last week in a news conference. “They made it very clear that there’s no way that that would happen.

“And then they turned around and said, ‘but we won’t start negotiating until you pass those tax bills over to us,’ ” Sullivan, of Covington, added. “That’s just absurd; it makes absolutely no sense.”

In order to meet court orders to spend more on K-12 education and improve mental-health services, the Democratic budget calls for $38.8 billion in spending, funded in part by about $1.5 billion in new revenue. Along with revenues from capital gains and a rise in part of the business-and-occupation tax, the Democratic plan would end some tax exemptions — including one that prevents a sales tax on bottled water and another that benefits oil refineries. They also propose to collect more sales tax from some online purchases.

In their $37.8 billion budget, Republicans argue there is no need for new taxes. They say education and other programs can be funded with existing taxes and the projected $3 billion more coming in from existing revenue.

To make their budget work, the Republicans reject state-worker contracts negotiated or arbitrated last year and redirect nearly $700 million in other spending. Nearly half of that — $300 million — comes from projected recreational-marijuana tax money, much of which has been earmarked for health and substance-abuse programs, in keeping with the 2012 voter initiative.

Both budgets spend a similar amount — $1.3 billion for the GOP and $1.4 billion for the Democrats — to fulfill the state Supreme Court’s K-12 funding order known as the McCleary decision.

The Republican Senate budget would lower state college tuition; the House Democratic budget would freeze tuition and spend more on early education and parks than the GOP.

Republicans made Democrats an opening offer, according to Hill, that would have included some spending beyond the initial GOP proposal.

“We basically said we’re willing to have a discussion about that,” Hill said. In addition to that offer, $100 million more in revenue was freed up recently with news that the state will receive that amount in federal money for child health care, according to Hill.

Before talks can resume, Sullivan and other Democrats want Republicans to drop their demands for tax votes.

“I think that by them locking the door, it makes it much more likely for us to go into special session,” Sullivan added. “I hope that that’s not the case.”

A special session must be called for by the governor and would last for 30 days; a 2015-17 budget is needed before July 1, the start of the state’s 2015 fiscal year.

Hill argues that Democrats all along have been planning on a special session or maybe even a government shutdown to force Republicans — more of whom come from far-flung districts in Eastern Washington — to capitulate.

His negotiating counterpart, Rep. Ross Hunter, D-Medina, disputes that Democrats want to hang around Olympia.

Hunter on Saturday said he recently brought to Republicans a detailed list of negotiation issues so the parties could get to work.

As far as the talk of a special session or even a government shutdown, “I’m not sure that’s adding a lot of illumination to the problem,” he said.

“I think I would rather be home,” Hunter added.

Hunter said he and Hill this week will try to hash out how to pass bills that have implications for the budget — including early-childhood education and recreational-marijuana reforms.

But a solution to the differences over the budget itself remains elusive.

“We’re meeting daily,” said Hill. “But there’s only so much we can do.”