Washington legislators are headed into an unusual second special session, still hoping to bridge stark partisan differences and avoid a June 30 deadline for averting a partial government shutdown.
Dejected and weary lawmakers were closing out their 30-day special session Tuesday with little to show for their labors. Gov. Jay Inslee, a freshman Democrat who once served in the state House himself, called a special session to convene at 9 a.m. on Wednesday.
At a Capitol news conference, Inslee sought to strike a balance between conciliation and impatience. He said he still wants to work with the Republican-controlled Senate on compromise legislation and a budget that boosts K-12 funding by $1 billion. But he also lit into the Senate coalition caucus, accusing them of rigidly following an “ideological agenda,” holding the school budget hostage for GOP bills that failed to pass the Democratic-controlled House. By contrast, he said, the House Democrats have backed off of some major priorities and have chopped their tax package by $771 million, he said.
The Senate coalition — 23 Republicans and two Democrats — have called for a somewhat smaller budget and said they would vote for new revenue only if the House will pass some policy reform bills.
Washington lawmakers and incoming Gov. Jay Inslee are arriving in Olympia for a grueling budget-year legislative session that begins at high noon on Monday.
The 63rd Legislature and the newly elected governor face a big budget shortfall — perhaps $2 billion, counting pay raises, rising cost of services for a growing and graying population and a state Supreme Court order to invest more in the state’s public schools. Democrat Inslee and a number of legislators say they will try to avoid raising state taxes, but talk of finding additional revenue from taxation of Internet sales, marijuana permits and fees, tax loophole closures and other sources.
Inslee and legislators from both parties also talk of a transportation funding package to go to the statewide ballot either this year or next.
But the biggest fireworks may turn out to be political and not fiscal. Two fiscally conservative Democrats have joined a solid bloc of 23 Republicans to seize control of the state Senate. The “majority coalition” plans to install the two Democrats in leadership roles, including Rodney Tom as majority leader. The coalition offered power-sharing, but the Ds mostly rejected the invitation to have fusion government essentially run by the minority.
Some analysts fear gridlock, given that the House and governor’s office are controlled by the Democrats, but leaders told an AP pre-legislative forum on Thursday they’re hoping for productive session. Tom and Senate Democratic Leader Ed Murray spoke of a “grand bargain” on key issues, such as K-12 enhancement and transportation.
Inslee also was in an upbeat mood heading into the session convening Monday and his inauguration Wednesday morning. He said he’ll focus on job creation and the economy “like a laser beam” and looks forward to partnering with the Legislature.
Lawmakers’ key tasks will be budget and revenue issues and dealing with a variety of touchy issues, including gun-control. They also are asked to deal with two initiatives and confirming Inslee’s cabinet appointees.
House Democrats have weighed into the tax debate in Olympia, offering an assortment of tax hikes – called “cats and dogs” in Capitol-speak – rather than a package that is anchored by a state sales tax increase.
The $858 million package is closer in approach to Governor Gregoire than the Senate Democrats. The Democratic governor proposed a $605 million mix of taxes, including a $1-a-pack tax on cigarettes, a tax on pop and candy and a higher hazardous materials tax on petroleum and other products. The House closes tax loopholes and taxes smokes, bottle water, elective cosmetic surgery, custom software and personal aircraft. It boosts the tax on lawyers, accountants and others. It does not include the hazardous waste tax increase, nor does it follow the Senate’s lead of boosting the sales tax by three-tenths of a cent on the dollar. The Senate’s approach would raise $918 million during the next 18 months.
The two chambers, in consultation with the governor, are racing a March 11 adjournment deadline to pass a budget rewrite and a tax package that will close a $2.8 billion budget gap.
In an unusual rush of budgetry at the Capitol, the Senate and House went public with their dueling budget plans within hours of each other, setting up a dash to adjournment within a few weeks.
Both proposals rely on another round of spending cuts, more federal bailout bucks, fund transfers galore, and, yes, tax increases. The prob: closing a budget gap of $2.8 billion, just a few short months after dealing with a $9 billion projected deficit.
The Senate tax package, topping $918 million, would include a three-tenths of a penny boost in the state sales tax, to 6.8 percent, raising over $300 million in the next year. Senate Democrats also propose a $1-a-pack addition to the cigarette tax and over $500 million worth of tax exemption/loophole closures. The Senate also is using $229 million from the “rainy day” fund and booking $583 million in expected federal money. Budget cuts of $838 million are spelled out in Senate Bill 6444 (more…)
While Washington lawmakers and Governor Gregoire contemplate the prospect of tax hikes to help close a $2.6 billion budget shortfall, Oregon voters have upheld the Oregon Legislature’s decision to boost corporate and personal income taxes to the tune of over $730 million.
Oregon voters, balloting by mail, on Tuesday approved a pair of referenda, both by a margin of better than 53-47. Measure 66 will raise the margin income tax rate on personal income above $125k for individuals and $250k for couples, producing $472 million for the current biennium. Measure 67 boosts business taxes by $261 million this biennium. This includes raising the corporate income tax. (more…)
Senate budget Chairwoman Margarita Prentice has introduced a plan for closing state agencies one day a month for the next 16 months, as a way of cutting costs as the state deals with a multibillion-dollar budget crisis.
Prentice, a Renton Democrat, outlined in Senate Bill 6503 introduced on Friday, specific closure days starting with Friday, March 12, and lasting through June 10, 2011. Most of the closures would be Fridays, as California currently does, giving state workers a long weekend, and less pay. Sometimes called “furloughs,” the bill calls it a temporary layoff of each worker.
The bill doesn’t indicate how much the state would save. The measure says some services would be exempt, such as prisons, institutions, state patrol enforcement and investigation, ferry operation, some public health programs, firefighting, military, fish and wildlife enforcement, parks, liquor stores, some Labor and Industries units, and some higher education programs.
Washington’s election-year session gets under way at high noon on Monday, with lawmakers and the governor facing 2.6 billion problems.
That, of course, is the size of the new projected budget deficit, $2.6 billion. Less than a year ago, lawmakers closed a $9 billion gap, but the anemic economy, coupled with soaring demand for state services during this recession, has produced yet another yawning chasm. Governor Gregoire says a no-new-taxes budget fix would require service cuts and layoffs totaling $1.7 billion. She and majority Democrats say they favor a solution that combines cuts, use of federal dollars and some assortment of tax and fee hikes. Minority Republicans continue to advocate for re-sizing the budget, without resorting to new revenue.
It’s a 60-day session and legislative leaders predict a furious pace, focused largely on budget concerns. The governor delivers her State of the State Address at mid-day Tuesday, and her budget staff says she’ll probably also have a fresh budget-and-tax plan that day as well. The final legislative version isn’t expected much before the scheduled March 11 adjournment. (more…)
Governor Gregoire has proposed, “with the greatest reluctance,” a new Washington State budget that fills a projected $2.6 billion deficit by cutting $1.7 billion from state programs and using $900 million in “rainy day” savings and fund balances.
But she says she hopes the Legislature won’t pass her own no-new-taxes budget that she was required by state law to submit.
She called her proposal “balanced, but unjust” and said she’ll propose a second budget next month that restores many of the cuts in education, health care and services to the poor – along with a revenue package to pay for it. She vowed to find additional money to retain the Basic Health Program, welfare for unemployable people, and levy equalization for property-poor school districts, and to restore cuts in Head Start, college financial aid, and numerous state-funded health and social service programs. (more…)
It’s true that the state and national economy are finally recovering, but consumers aren’t spending and unemployment keeps edging upward. That odd situation, dubbed a “revenue-less recovery,” today led the state Economic and Revenue Forecast Council to slash another $760 million from the expected tax revenue for the next two-year period.
State budget Director Victor Moore says the grim development means the Legislature and Governor Gregoire now have a budget hole of $2.6 billion to fill, just months after fixing a $9 billion spending gap. He and other Democrats on the forecast panel immediately raised the prospect of at least some tax hikes to accompany a new round of spending cuts. Republicans warned against that, saying it would hit businesses and consumers when they’re already hurting. House Revenue Chairman Ross Hunter said any tax package should be adopted in Olympia, since routing it through the November ballot would delay the fix by nearly a year.
Moore said the budget gap is “numbing” in sheer scope, and added, “Everything is on the table (including taxes) — I just now need a bigger table.” He said the $2.6 billion gap is $100 million worse than the governor’s office had expected. (more…)
Governor Gregoire and the Washington Legislature are cringing at the thought of a projected $2 billion budget gap this winter, and that number is expected to rise a bunch more in Thursday’s revenue forecast update. This after closing a $9 billion gap in April.
Does misery love company? Then take note that our sister states of Oregon and California are facing dire straits. Today’s LA Times says the fresh deficit of $21 billion is looming for the not-so-Golden State, even after the budget nightmare of ’09 was temporarily dealt with. California is at the top of an “endangered” states list compiled by the Pew Center on the States. And according to former Oregon journo and J School professor Floyd McKay, Oregon is in a heap of trouble, too, particularly with a statewide vote skedded for January on a $733 million tax rollback. Oregon already cut $2 billion in spending and boosted taxes by $1 billion.
Oregon, too, is on the most endangered list. Washington’s mess isn’t bad enough to make the cut, and the report gives the state top marks in managing its finances.