Gov. Chris Gregoire called another special session at midnight so that lawmakers could keep working through the night.

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OLYMPIA — Lawmakers reached a tentative deal on the state budget and related bills Tuesday and were working through the night in an effort to complete their work.

The 30-day special session ended at midnight with several bills still not passed, including the state budget. However, Gov. Chris Gregoire called another special session so that lawmakers could keep working.

The governor said there’s an agreement with legislative leaders in both parties for a one-day special session. “The intent is for folks to continue working through the night until the job is done,” she said.

Marathon negotiations this week between the governor and Republican and Democratic leaders apparently broke a months-long impasse. The governor’s office announced a tentative deal had been reached Tuesday afternoon, setting off a flurry of activity as lawmakers rushed to pass bills before adjournment.

The Legislature went into special session March 12 after lawmakers were unable to reach agreement on how to close a roughly $1 billion budget shortfall during the regular session that ended March 8.

Negotiations had also bogged down over a handful of bills, including proposals to eliminate early-retirement options for new employees in the state’s pension plans, consolidate the purchase of health insurance for K-12 employees, and require the budget to match expected revenues over a four-year period.

Negotiators apparently reached compromises on those bills.

Although Democrats hold majorities in both chambers, Republicans have controlled the budget in the Senate with the help of three fiscally conservative Democrats. That coalition insisted on passage of the pension and K-12 health-care bills, among others, before acting on the state budget.

Those proposals would not save money in the current budget, but supporters argued they would reduce future growth in state spending.

House Democrats, however, balked at the Senate coalition’s proposals without major changes.

That was where things stood until Gregoire moved to break the stalemate on Monday with a new compromise package and lengthy negotiations.

Asked what happened to clear the way for adjournment, Sen. Joe Zarelli, of Ridgefield, Clark County, the lead GOP budget negotiator, said with a chuckle, “I’d love to think I broke them down.”

Zarelli added, “We all got to the point where we all understood we each needed to give and we needed to allow the other to get enough in the transaction. When we got there, we finally got it to work out.”

Sen. Jim Kastama, D-Puyallup, one of the three Democrats voting with the GOP, said the bills they wanted passed were worth going into special session.

“I think that you have to understand that there are people, and I’m one of them, who have come all this way to get real reform. Things that make a difference.”

The compromise pension bill passed the Senate by a 27-22 vote and later cleared the house.

State workers who retire before the age of 62 already have scaled-back pension benefits. Under the new bill, benefits to workers retiring at the age of 55 would be reduced by as much as 50 percent. The changes only apply to workers hired starting in May 2013. The plan would save the state an estimated $1.3 billion over 25 years.

The Senate also passed other budget-related bills off the floor Tuesday night. On a 42-5 vote, the Senate approved an accounting maneuver in which the state would temporarily claim control of local sales taxes before they are sent back to jurisdictions at their usual time, roughly a month after they are collected. That plan is estimated to increase the state’s general-fund balance sheet by some $238 million. That measure passed the House last week and now goes to the governor for her signature.

Also Tuesday, the House passed a measure that would require the state’s two-year budget to be in line with anticipated revenue over a four-year period or 4.5 percent growth per year, whichever is greater. The measure, another bill that was part of the budget negotiations, was passed on a 79-19 vote and was headed to the Senate for concurrence.

This story includes material from The Associated Press.

Andrew Garber: 360-236-8266 or