Hidden issues: What's keeping Legislature from budget deal?

Boeing, fish, a bridge to Portland and some esoteric payroll tax for major corporations.
Crosscut archive image.

Sen. Rodney Tom talks with reporters about the negotiations to reach a legislative budget deal.

Boeing, fish, a bridge to Portland and some esoteric payroll tax for major corporations.

At least some of the hidden bargaining chips are becoming visible.

There's a fish study that could delay the Boeing Co.'s need to make expensive pollution fixes. A "go" or "no-go" decision on replacing the Columbia River bridge at Vancouver. Possibly an esoteric payroll tax matter that affects major corporations.

Or maybe the Republican-oriented Washington Senate and the Democratic-controlled House are still split on education and workers compensation reform bills versus closing six tax exemptions to improve Washington's schools. Then again, maybe the two sides are still hashing out how $1 billion should actually be spent to improve the state's schools and meet a state Supreme Court mandate.

Negotiators were not talking specifics Tuesday — saying only that the two sides are very close to an agreement. Actually, everyone has been saying that for several days now.

"Right now, we're down to the details. ... More important than expediency is getting the job done right," said Senate Majority Coalition Caucus Leader Rodney Tom, D-Medina.

Rep. Reuven Carlyle, D-Seattle and one of the House's negotiators, used the old dog years comparison, saying that in terms of what gets accomplished, an hour of negotiations now equals one or more days of normal time. "We're making exponential progress in dog hours," said Carlyle, who was "out of metaphors" for describing the talks.

The current (2011-2013) fiscal biennium ends on Sunday. Come Monday morning at least 26,000 state employees face unpaid furloughs if lawmakers don't sign off on a 2013-2015-budget appropriation.

Several aspects of the budget discussions surfaced Tuesday in Olympia. 

The House wants a transportation revenue package that calls for a 6 cents per gallon gas tax hike. The six cent increase to the current 38 cent per gallon tax rate would take effect on Aug 1. Another 4.5 cents per gallon bump would kick in on July 1, 2014. House Republicans made several unsuccessful attempts on Tuesday to remove the Vancouver-Portland Bridge replacement from the transportation package, and also failed to create an easy opening to a fall public referendum to approve the package.

House Democrats stopped short of calling for a vote Tuesday — which they would have won — on the roughly $10 billion transportation revenue package, in order to have a flexible bargaining chip in the deadlocked budget talks with the Senate. House Transportation Committee Chairwoman Judy Clibborn, D-Mercer Island, said that the caucus leaders had delayed the vote and referred questions to them, but they were in talks with the Senate leaders and could not be reached for comment. Clibborn is expecting the Senate to put together a different transportation revenue package, meaning negotiations will have to continue on that matter.

The Vancouver-Portland bridge replacement is vehemently opposed by Republicans in both chambers. The Senate Majority Coalition Caucus has a 25-24 margin to defeat the $450 million appropriation needed to greenlight that project. A major wrinkle is that the revenue package would also fund a project to extend State Route 167 to the port of Tacoma, which is a big priority of Pierce County's governments and business interests. Three majority coalition members represent Pierce County. That trio — Sens. Bruce Dammeier, R-Puyallup, Randi Becker, R-Eatonville, and Steve O'Ban, R-Pierce County — will have to choose between their caucus and their constituents if House Democrats keep the Route 167 and Columbia River bridge projects linked in the revenue bill.

The majority coalition caucus can delay both projects and other transportation work by simply not taking the revenue package to a floor vote — effectively killing the work until at least 2014.

The Senate majority coalition has been lukewarm about passing a transportation revenue package this year. The coalition does not like the gas tax increase. The House package has $450 million earmarked for the Vancouver-Portland bridge, so Oregon and the feds will foot their proposed shares of  the project, which has a $3.5 billion price tag. Tolls will provide up to $1.3 billion of the cost. (The project also includes highway lane expansions, interchange replacements and light rail.) 

In addition, there were these developments:

  • Carlyle and Rep Hans Dunshee, D-Everett, confirmed the existence of a peripheral budget deadlock item as originally reported by The Herald of Everett. The paper reported the Boeing Co. does not like an upcoming change in state regulations on the level of pollutants that industrial facilities are allowed to discharge into the water. The stricter discharge requirements could lead to expensive upgrades to discharge systems.

Boeing wants a study on the numbers and types of fish consumed in Washington, and an accounting of who caught the fish and where. Boeing and the Senate want that study done before the new pollution discharge regulations go into effect. Gov. Jay Inslee and the House Democrats have opposed such a study, saying it will delay measures designed to protect human health. Dunshee said the study could take two to three years.

Dunshee said a compromise is being worked out which would allow the new regulations to go into effect as planned but also launch a study, with the regulations to be revisited after the study results are known. InvestigateWest ran a story on Boeing's opposition to the new regulations in March.

  • Washington State Wire reported that business interests, spearheaded by the Association of Washington Business, are making an 11th hour push to end a tax on corporate entities that consolidate their payroll operations. Such operations are taxed; corporations argue that this creates a double-taxation burden. Rep. Chris Reykdal, D- Olympia, introduced the original bill, which went nowhere after a House finance committee hearing on Feb. 26. He reintroduced another version of the bill in June during the Legislature's first special session, but it too has gone nowhere.

The Senate's last public 2013-2015 operating budget proposal called for spending $33.2 billion, while the House's last public proposal called for $33.5 billion. A few additional budgetary loose ends may still remain. In the last few days, the Democratic-controlled House was trying to repeal a landline phone tax exemption as a way to prevent cellular companies and other telecommunications firms from filing lawsuits to get the same exemptions. A successful lawsuit in 2014 could lead to a refund of about $430 million in fiscal 2015, plus the loss of about $430 million in 2015-2017 revenue and another $673 million in 2017-2019.

It's unknown whether lawmakers resolved the landline exemption issue.

Other open issues in recent days included several Senate education and workers comp reform bills, and an effort by the Senate to sharply reduce health and social service spending. For its part, the House seeks to preserve health and social servces and close six tax exemptions that could provide $208 million in school-related revenue.

On Monday, Gov. Inslee echoed the House position, saying that social and health services will not be dramatically cut.

This story has been updated since it first appeared to correct and clarify some details of the proposed Columbia River Crossing's finances and scope.

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 johnstang_8@hotmail.com and on Twitter at @johnstang_8