Democrats unveil state budget compromise

They scale back increases in education spending and eliminate fewer tax loopholes than they had targeted.
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They scale back increases in education spending and eliminate fewer tax loopholes than they had targeted.

Democrats will give up roughly 78 percent of the new tax revenue that they originally wanted in order to reach a budget compromise with the Republican-oriented Senate.

It's hard to say what the Senate's Majority Coalition Caucus — 23 Republicans and two Democrats — thinks about the new Democratic position.

Majority coalition leaders were in meetings and generally could not be reached for comment Wednesday in Olympia. Coalition caucus leader Rodney Tom, D-medina, issued a short press release.

Tom's press release said: “I am disappointed that this House budget proposal is balanced on the backs of Washington’s school kids. Our children deserve our first dollars, not our last dime. We in the Senate will continue to work with our House colleagues to seek a workable compromise, but we will not let political expediency stand in the way of fulfilling our obligation to provide for our schools.” 

Tom's press release did not elaborate beyond that statement, and it did not address specific points and concessions in the new Democratic House proposal. 

However, while speaking on a panel at an event co-sponsored by Crosscut on Wednesday evening, he said legislators are closer to agreement than is generally perceived. He also continued his criticism of the compromise offer's education spending, saying the Senate budget had more money for schools.

The House's new proposal essentially cuts the education fix-it budget from the House's original $1.17 billion in extra money to meet Senate Majority Coalition Caucus' lower figure of $1 billion for that 2013-2015 fix-it work — a smaller number that Tom has wanted. State estimates say that Legislature must allocate roughly an extra $4 billion to $4.5 billion in new education money across the upcoming three budget biennia to meet the Washington's Supreme Court's mandate to improve teacher-student ratios, install all-day kindergartens, expand some high school instruction, and other measures.

Democratic House and Senate leaders held a Wednesday press conference to outline their new proposal.

"(Gov. Jay Inslee) asked us to compromise. This is a very large move in that direction," said Rep. Ross Hunter, D-Medina and one of the House Democrats' chief budget negotiators. "It does represent a significant compromise," said Sen. Sharon Nelson, D-Vashon Island and the Senate Democrats' No. 2 budget writer.

The Republican-dominated Senate and Democratic-controlled House have been deadlocked for more than a month in closed-door negotiations on the 2013-2015 state-operating budget. In late April, the Senate proposal totaled $33.21 billion, extending no taxes, closing no tax exemptions and setting aside $1 billion for Supreme Court-mandated education improvements. The Senate has wanted significant cuts in health and human services programs. The $34.33 billion House budget would raise an extra $1.17 billion for the education fix-it work by closing some tax exemptions and extending a business-and-occupation tax on service firms. The House has wanted cuts in health and human services to be much smaller than the Senate proposes.

The new Democratic proposal would:

  • Trim its $34.33 billion budget proposal by $789 million — making it now $33.541 billion, or $331 million more than the Senate's last public position from late April.
  • Eliminate an attempt to extend an expiring business and occupation tax on service, which would have raised close to $500 million in new revenue for 2013-2015. At the evening event, Tom said it's important for the Legislature to keep temporary tax increases from being permanent.
  • Trim the House's original attempt to cut 15 tax exemptions to raise $751 million in new revenue to seven tax exemptions to raise $255 million in new revenue mostly for the education fix-it work required by the Supreme Court, with the remainder routed to higher education. The rest of the roughly $1 billion will come from other budget shifts. The seven remaining targeted exemptions are on extracted fuel used at oil refineries, addressing prescription drug warehouses, no sale taxes on non-residents, no sales taxes on bottled water, addressing travel agents and tours, and two tax breaks that address high technology research and development. Washington has 640 tax exemptions totaling many tens of billions of dollars.
  •  Trim some K-12 education appropriations not related to the Supreme Court-mandated improvements. The new  proposal also expands the original proposed cuts in health and human services.
  • Allocate an extra $93 million to higher education. College tuition hikes would be limited to 3 percent.
  • Eliminate a House plan to raid the state's rainy day fund to balance the budget.

The Senate's Majority Coalition Majority Coalition Caucus has kept to a strong stance of no new taxes and of not closing any tax exemptions. If the Senate does not agree to eliminating the seven tax exemptions still targeted, that would reduce the House's allocation for the court-mandated education fix-it work from about $1 billion to roughly $800 million.

House Majority Leader Pat Sullivan, D-Covington, said the piles of bills that the Republican-oriented Senate and Democratic-controlled House have been essentially holding hostage for end-of-session horse-trading have significantly dropped in the House Democrat priorities. He said some trading might occur if time remains, but downplayed that possibility. Senate Republicans have a list of 33 bills that have stalled in the House, which they want passed as part of a budget deal — at least as of a couple weeks ago. Some are essentially budget-related, but many are not, Sullivan said.

So far, Republicans have been publicly adamant that their workers compensation reforms and education reforms bills need to be passed for a budget deal to go through — at least that was the GOP's public stance a month ago. Republicans have been mum about those bills since. But Tom spoke of the need for "fundamental" reforms.

Meanwhile, the Majority Coalition Caucus has stalled Democrat bills to provide possible financial aid to children of undocumented immigrants who graduate from state high schools and want to apply to college, and to require insurance companies that provide maternal coverage to also include abortion coverage. Sullivan's statement hints that the Democrats may not be interested in swapping passage of those bills for guaranteeing some stalled Republican bills to get through the House.

Inslee praised the House and Senate Democrats' new budget proposal.

“I’ve asked both sides to compromise and come to the middle and this is progress in the right direction. ... This proposal is a good faith effort to help us finish the people’s business. It significantly scales back new revenue, but preserves essential services that are necessary for keeping our kids healthy and ready to learn," Inslee said in a written statement. "But if we’re going to finish on time, we need all sides to come together now.”

Inslee was referring to the special session ending June 11, and fiscal 2011-2013 ending June 30. The Legislature's 105-day regular session ended April 28. Democratic and Republican leaders continued budget talks with little movement until Wednesday through a two-week recess and through three weeks so far in the new special session that ends next Tuesday. If needed, Inslee will call second special session to begin Wednesday.

For exclusive coverage of the state Legislature, check out Crosscut's Olympia 2013 page.


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About the Authors & Contributors

John Stang

John Stang

John Stang is a freelance writer who often covers state government and the environment. He can be reached on email at and on Twitter at @johnstang_8