Government shutdown? Inslee concedes the possibility

The governor says another legislative special session is likely. Could this Washington be headed for its own sequester?
Gov. Jay Inslee

Gov. Jay Inslee Tom James/Crosscut

In an impressive display of saving the best for last, Gov. Jay Inslee waited until the end of a press conference today to acknowledge the two most dramatic possibilities so far in the Olympia budget stalemate: a second special session and a state government shutdown.

Inslee's remarks are the latest development in what has been a slow-motion showdown, as rank-and-file Democrats have battled with a coalition of Republicans and Republican-voting Democrats in the state Senate. Inslee said another special session was likely if senators couldn't agree on a budget by Tuesday, the scheduled end of the current special session. If legislators can't reach an agreement by the July 1 end of the current budget year, a government shutdown would be possible, he added.

Although he accused both sides of intransigence, Inslee saved his harshest words for Republicans, saying that they were effectively trying to force a tax cut even as the state struggles to meet a state Supreme Court mandate to find $4 billion for K-12 education over the next two years.

"At a time when we all should be working together to fill that hole," Inslee said, "the Senate majority wants to knock another hole."

At issue was another state Supreme Court decision, where justices have effectively ruled that the state could not collect estate taxes involving a married couple who used a certain type of federal tax shelter. Under the ruling, the state Department of Revenue estimated it would collect about $100 million less per year.

The loss would amount to about 5 percent of the state's additional $2 billion education funding obligation under the court mandate that it provide better financing of schools.

Democrats in the Legislature have proposed re-writing the state estate tax law to keep the tax the same, essentially fixing what was widely termed a loophole. The proposal would not increase taxes, only impose the same taxes when married couples use the federal tax shelter as would occur with an estate involving other married couples or single people.

The Republican-dominated Senate Majority Coalition Caucus responded by saying their differences with Inslee and Democrats are about larger reforms of education and state government. Caucus Leader Sen. Rodney Tom, D-Medina, said the budget proposed by the Senate sharply improves education, but the governor's talk about revenue is focused on protecting non-education programs. Sen. Mark Schoesler, Republican Senate leader from Ritzville, said budget progress has been made but "just not at a pace that I think anybody is satisfied with." Schoesler also said, "We share a lot of common goals." 

At his press conference, Inslee refused to give specifics about budget negotiations, but said the Senate coalition was refusing to go along with the Democrats' proposed change to the law. In light of the education-funding mandate, Inslee said, letting taxes drop would be "going in the wrong direction."

While a second special session has been generally predicted in recent days, the possibility of a state government shutdown has not been discussed as widely. Today, Inslee would not firmly predict either a special session or a shutdown, but said that he has been working under the assumption that a special session would be necessary if a budget deal could not be reached.

While preparations aren't underway yet for a shutdown, Inslee acknowledged that he had begun discussions with state agencies about the possibility. He did not offer details. But he said a shutdown is a real possibility if no budget deal is reached by the Legislature by July 1.

Inslee said that, in his discussions, he has inquired about the effects of any shutdown on services, but he offered no description of the effects.

Tom James has helped cover the 2013 state legislative session for Crosscut through the University of Washington journalism program. He also writes for Crosscut on other subjects. Born in Seattle and raised in Kitsap, Tom worked for the Kitsap Navy News and Central Kitsap Reporter before heading to the UW for a double-major in journalism and economics, which he hopes to finish in 2014.


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Comments:

Posted Tue, Jun 4, 6:06 p.m. Inappropriate

Since the legislature seems to be unable to do the job they were elected to do they may as well go home. Shut it down. Since there is a serious lack of leadership, vision and balls in Olympia there's no point in them being there and getting PAID for it. Their per diem will free up some $$$ for education.

cbbear

Posted Tue, Jun 4, 6:35 p.m. Inappropriate

I dunno, I think the Senate is doing what I want them to do. Inslee is trying to raise taxes, in spite of his campaign pledge not to, and they won't agree. Fine by me.

NotFan

Posted Tue, Jun 4, 9:53 p.m. Inappropriate

Shut down the government? We should be so lucky.

Perhaps after a couple of weeks of gnashing of teeth and blood leaking from the pores of the bureaucrats maybe the clowns in Olympia would get the point that we don't need a lot of the crap that passes as state aid.

Djinn

Posted Wed, Jun 5, 6:46 a.m. Inappropriate

Break out the Special Sauce and the Rye bread grandma! Jay Inslee's going to shut down State Government!

Cameron

Posted Wed, Jun 5, 7:20 a.m. Inappropriate

We had some D senators "switch parties" at the start of the session this year. That move kept Ed Murray from becoming the Senate Majority Leader. Now we have the prospect of two special sessions, and those prevent Murray from fundraising for his mayoral campaign. Sure looks like the people who know him best are doing what they can to keep Murray out of the mayor's office . . ..

crossrip

Posted Wed, Jun 5, 9:18 a.m. Inappropriate

As if we have never had special legislative sessions before....

Hasn't it already been speculated that they are waiting for the next state revenue report, which will likely show increased tax revenues, making the budget easier to create? Also, perhaps waiting to see what the U.S. Congress does about internet sales taxes, which could also bring WA state a windfall of tax revenues. If that is the case, then what is anyone complaining about? It makes perfect sense to wait and see what the latest revenue projections will be. You know, revenues are a fairly important component of any budget, right?

Inslee is not only an empty suit -- he is proving himself to be a drama queen as well. Inslee, just shut up and go to your room. The legislature will come get you when it's time to sign the budget.

Lincoln

Posted Mon, Jun 10, 9:50 a.m. Inappropriate

Yes, and don't forget the August GDP numbers. And those might not be definitive, so maybe wait for the September numbers. And then the Christmas shopping numbers. And maybe the cows will come home, that might change things. Eventually we might just wish our way out of the shortfall. Inslee would be an empty suit if he relied on wishful thinking like this, as he has often done in the past. I'm glad he's feeling some need to get engaged in the process. I'd like to see more.

Posted Wed, Jun 5, 3:11 p.m. Inappropriate

I've been giving a lot of thought to the conundrum presented by the McCleary decision. I read the decision and read the 1993 legislation that set it up. It seems to me that the Legislature created a no win situation for itself in 1993 by making it a law that all students have to demonstrate a level of proficiency. Don't get me wrong, our public schools can do a lot better than they now do. But there's no way the 1993 standard of ALL students demonstrating proficiency can ever be reached. http://www.k12.wa.us/dataadmin/pubdocs/GradDropout/10-11/GradDropoutStats_2010-11.pdf indicates that more than 20% of all Washington high school students drop out or fail to complete within 4 or 5 years. And despite the dumbing down of the WASL and the change in its name, no schools have a 100% pass rate.

Now McCleary buys into prescriptive solutions like reduced class size and more hours in class, and the legislature has got to find a way to pay for it. That's not going to meet the 1993 standard. Bellevue High claims that 96% of students will go on to college. Bellevue High does not have a 100% WASL pass rate, and not all the kids who attend graduate. The International School has a higher pass rate, but you could argue that folks who self select into their lottery and are willing to provide their own transportation to school are somehow different than the demographics at other Bellevue high schools. Still, while International shows the best performance in the district, that performance is still based on the same district wide curriculum, class sizes, and number of classroom hours.

I think the Legislature needs to redefine what it means to deliver basic education. It has to be about the quality of the curriculum and the qualifications and performance of the teaching corps, and not so much about measuring student performance. Tom Stritikus, the Dean of Education at the UW, can tell you about how to teach teachers to teach in ways that enhance student learning. I'm not saying that students shouldn't be evaluated to ensure that they're learning, but hanging the definition of success solely on student performance is never going to get us there. Now the legislature is tasked with finding $1-2 Billion to fund smaller class sizes and more instructional hours. If you do that and the court finds that all kids still aren't demonstrating proficiency, what then? It takes strong curriculum, great teaching, and strong family support for students to succeed.

gadfly

Posted Wed, Jun 5, 3:50 p.m. Inappropriate

strong family support for students to succeed,,,, in a perfect world, that is the answer.

salmonjim

Posted Thu, Jun 6, 9:23 a.m. Inappropriate

As a state employee who has not had a pay increase in years a shutdown of any length would likely be devastating to me.

eric1972

Posted Thu, Jun 6, 10:16 p.m. Inappropriate

Why do you think pay increases should have happened during a 6 year Great Recession aka DEPRESSION?

I think
a) you are lucky you didn't become unemployed
b) you are lucky you didn't see your salary be reduced

I do not understand how housing values can reduce by 40 to 50% all across the country, and how 32% of all US households are underwater in their homes, and how at least 15% of all US residences were forfeited in foreclosure between 2007 and 2013, and why wages in government and non-profits and universities and unions did not reduce by 20% or more.

Private industry basically cleaned house by letting everyone go, then cherry picked new hires at lower wages. Why hasn't that happened across the board?

It seems the housing market reset, but nothing else did. Why?

Posted Fri, Jun 7, 12:01 a.m. Inappropriate

The Fed has kept pumping air into the leaking tire, so the housing values are kinda-sorta maybe mostly back. It sucks, but the alternative was deflation and depression. The rub is that the Federal Reserve can only create money to be lent, but it cannot create the ability to service the debt.

NotFan

Posted Fri, Jun 7, 4:12 p.m. Inappropriate

The Fed could actually spend money with each state for more infrastructure, and create jobs which will service household debt.

On an infrastructure note .... have any of you driven down 101 to Pacific County recently? I couldn't tell if WADOT was just planning to let that highway crumble back into dirt, gravel & sand or if the master plan was to just ignore it totally in case a tsunami wipes out SW Washington. No point wasting all that highway money on silly old 101 if the tsunami comes.

What a mess that stretch from Montesano to the coast is, dangerously inexcuseable. There is one stretch where the highway shoulders have fallen off on both sides, ravines on each side. Nasty little place for a nasty big wreck, and I'll bet cell coverage there for emergencies is non-existent.

I hear Madam Gregoire said she'd never go down there again. Nice leadership.

Posted Sat, Jun 8, 12:08 p.m. Inappropriate

I would undoubtedly agree about the highway, but you're misunderstanding what the Federal Reserve does. Or maybe I should put it this way: If the Fed were to find a way to do what you suggest, it would constitute an expansion of their reach that would dwarf, say, the New Deal and Great Society expansions of government from the 1930s through the 1970s.

Not to put too fine a point on this, but do you know how the Fed creates money? It's one of those things that will bore a layman to tears, but if you were familiar with the mechanism you'd see just how far removed it is from what you are suggesting.

NotFan

Posted Sun, Jun 9, 10:12 p.m. Inappropriate

"Why hasn't that happened across the board? [firing everyone and hiring a few back at lower pay]"

Because some of us don't want mal-distribution of income and wealth to get worse than it already is.

louploup

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