A breakthrough took place Monday in the deadlocked two-month-old Washington House-Senate negotiations over the 2013-2015 budget.
But all sides are tight-lipped about what that mid-Monday breakthrough was. A widespread, but unconfirmed rumor in the Capitol was that the Senate's Majority Coalition Caucus no longer insists that a workers compensation reform bill pass the House before it will give a green light to repealing a phone landline tax exemption.
But the breakthrough was enough for Gov. Jay Inslee to announce at 2:30 p.m. that "the risk of a government shutdown is significantly less than it was this morning." He declined to go into detail on what happened behind closed doors.
At 1 p.m. Monday, the state government emailed notices to more than 26,000 of the state executive branch's roughly 59,000 employees that they faced likely unpaid furloughs if a 2013-2015 budget compromise is not reached before July 1. That is the first day of the fiscal 2013-2015 biennium. Chain-of-command arrangements mean that additional employees in some agencies also face potential furloughs.
The notices — required by contracts to be made at least a week in advance of a layoff or furlough — were sent at 1 p.m. because what Inslee called the "breakthrough" had not occurred by then. Inslee acknowledged that the 26,000 employees are still in limbo, even though the likelihood of furloughs has shrunk.
Inslee said the breakthrough ensures that roughly $1 billion will go to improvements in education in 2013-2015 that were ordered by the Washington Supreme Court. But he declined to go into detail on how dramatically different House and Senate plans to map out and pay for those improvements were reconciled. He said he did not want to jeopardize the final stages of the negotiations by unveiling specific details.
He expected the negotiators for the two sides to reach basic agreements on the operating budget late Monday or sometime today. However, the rank-and-file members of both chambers left late Monday afternoon, and won't be briefed on the talks until today. If an agreement is reached, it will take at a few days to map out the details to put the basic agreements into action and pass the appropriate legislation.
A major dispute in the recent rounds of talks has involved the Democratic-controlled House's desire to repeal a landline phone tax exemption as a preventve measure to head off cellular companies and other telecommunications firms from filing lawsuits seeking the same exemptions. A successful lawsuit in 2014 could lead to a refund of about $430 million in fiscal 2015, plus the loss of another $430 million in 2015-2017 revenue and an additional $673 million in 2017-2019. The Senate — controlled by a 23-Republican-two-Democrat alliance — has been saying it will pass that bill if the House approves a Senate bill to lower the eligible age from 55 to 40 on potential lump settlements on workers compensation claims.
Other open issues in recent days included the Senate wanting several education-reform and workers comp revision bills passed, and the House wanting to close six tax exemption that could provide $208 million in school-related revenue. Also, the Senate wanted to significantly trim health and social services, while the House wanted much smaller cuts. The House Democrats want to limit college tuition increases to 3 percent, while the Senate majority coalition ants no tuition hikes.
Inslee said social and health services will not be dramatically cut by the talks.
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.
Meanwhile, Inslee wants a transportation revenue package passed this year, and has said he will keep the Legislature in session until one makes it through. Negotiations on the transportation revenue package have been conducted parallel to the operating budget talks
"It's the No.1 thing we can do to create jobs in Washington. ... tens of thousands of jobs," Inslee said of the transportation revenue package.
The Senate majority coalition has been lukewarm about a transportation revenue package. The majority coalition does not like a gas tax increase in the package. Plus many coalition members don't want $450 million appropriated to replace the Columbia River Bridge at Vancouver. That $450 million is needed so Oregon and the feds will foot the rest of the $3.5 billion price tag.
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. So far, the majority coalition has a 25-24 advantage in votes and strict caucus loyalty discipline in opposing the transportation revenue package, But three of it members represent Pierce County. Consequently, those three — Sens. Bruce Dammeier, R-Puyallup, Randi Becker, R-Eatonvile, and Steve O'Ban, R-Pierce County — are facing conflicting pressures between their caucus and their constituents.
For exclusive coverage of the state Legislature, check out Crosscut's Olympia 2013 page.