Budget agreement may be days away

May 20, 2011 

The sound of state legislators stirring toward adjournment could be heard a little louder Thursday at the Capitol.

Budget writers in the state House and Senate were working into the evening to narrow their differences on a roughly $32 billion two-year operating budget, and leaders talked with a growing confidence that an agreement is near.

And today, the 98 members of the House were returning to Olympia three days early from a recess to hold budget hearings on bills that passed the Senate on Thursday. They also were preparing for floor action over the weekend that would allow a final rush toward adjournment by Wednesday, the final scheduled day of the 30-day special session.

“I think we’re going to get there,” Senate Ways and Means Committee chairman Ed Murray, D-Seattle, said as he headed to an early evening meeting with legislative leaders, budget writers and Gov. Chris Gregoire. He and others emerged after 6 p.m. feeling more optimistic about getting around budget roadblocks, and he said: “We’re making progress. I think we can get there by Wednesday.’’

Technically a budget is all they need to pass – with the Senate’s majority Democrats and minority Republicans each providing enough votes to pass an agreement. But disputes over a workers’ compensation reform and a new state debt limit could politically block that vote in the Senate or House.

There also is a timing problem. Murray and his House counterpart, Democratic Rep. Ross Hunter, both said a deal has to come quickly in order to handle budget-bill drafting and other procedural chores needed to get to a final vote Wednesday. That means an agreement must come by Saturday or Sunday.

Republican Sen. Joseph Zarelli of Ridgefield said the House and Senate are now less than $100 million apart on total spending – less than a third from where they started.

Gregoire’s budget director Marty Brown said that House-Senate disagreements remain on the Disability Lifeline (that helps disabled people as they transition to Social Security pensions); on education spending, pay and layoff issues; higher education and state need grants; and government reorganization bills. How each of those is solved could require larger cuts in other areas.

Gregoire has made clear that she won’t call lawmakers back if they fail to finish Wednesday – until they have a budget deal ready to vote on.

House Republican Leader Richard DeBolt of Chehalis said there is progress on the budget. But he sees political sticking points over how to cut costs in workers’ compensation and getting a constitutional amendment that asks voters to lower the state’s debt limit onto the November ballot.

“Everything else is inches away,” DeBolt said.

The worker compensation system’s trust fund has been running short due to poor investment returns in 2008-09 and high claim costs. Gregoire offered a new idea this week – what some call “structured” settlements – to settle permanent-disability claims at lower costs. Instead of giving workers the option of taking a lump sum to settle a life-time disability claim, the “structured” approach might pay it out in installments.

But Gregoire’s legislative director Jim Justin refused to explain what the “structured settlement” concept looks like, and labor advocates said they had not heard details.

Democratic Rep. Tami Green has said House Democrats are analyzing it to see if it could pencil out, and the caucus hoped to know as soon as today, when House Speaker Frank Chopp is expected to be available to talk with the Senate on workers’ comp. Chopp favors a package of changes – including a stop to cost-of-living raises for permanently disabled pensioners at a time that public-sector employees are facing pay freezes or cuts.

Senate Majority Leader Lisa Brown, D-Spokane, said parties are talking and there is movement on the workers’ compensation issue. She considers the high number and cost of Washington’s permanent-disability claims to be an “outlier” compared to other states. But like Chopp, she wants a package to lower system costs without harming workers.

Senate Republican Leader Mike Hewitt of Walla Walla said earlier in the day that he also wants an agreement on real savings in workers’ comp, not passage of any specific cost-cutting policy.

But he fumed that Chopp, who has been locked into meetings of late, was not available to negotiate on workers’ comp. Hewitt cited eyewitness accounts that Chopp had breakfast at The Spar restaurant with the Washington State Labor Council’s president, who opposes some of the workers’ comp reforms.

Chopp, a Seattle Democrat, bristles at the idea he alone is blocking an agreement and said this week that a great majority in his caucus is opposed to lump-sum settlements. He said there is a danger these could take advantage of injured workers desperate to get cash.

Labor groups also hold that view, but one lobbyist expressed a fear that unions were about to get “rolled over” by circumstances as lawmakers shift their focus to doing whatever is needed to get out of town.

The action on the budget came as the Senate passed several bills Thursday that figure into the budget.

 • One was a Medicaid fraud crackdown that the attorney general supported. It could quadruple the state’s $20 million a year in fraud recoveries in the system, according to its backers, Democratic Sen. Karen Keiser and Republican Sen. Cheryl Pflug.

 • In a move that raised cries of hypocrisy, the Senate also approved an extension of tax-break designed to benefit filmmakers. Majority Democrats have been railing against tax exemptions for corporations all year, but Sen. Jeanne Kohl-Welles, D-Seattle, argued the tax had created jobs and that a legislative audit of the tax break showed it paid off.

 • The Senate also fell one vote short of passing a bill that would let King County ask voters in November if they want to extend a rental car and restaurant tax. The tax was adopted in the mid-1990s and is scheduled to expire in 2015. The proposal would have funded a state convention center expansion, the arts and housing.

Brad Shannon: 360-753-1688 bshannon@theolympian.com

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