Will 30 days be enough?

BUDGET AGREEMENT: Legislators slated to unveil deal Tuesday, but fight over state debt limit may keep lawmakers working past Wednesday's deadline

May 24, 2011 

Republicans in the state Senate checked one major item off their to-do list Monday as an overhaul of the workers’ compensation system headed to the governor. But that’s not enough to guarantee their votes on a budget deal, scheduled for unveiling Tuesday morning.

There are other items on the GOP list, most prominently a change to the state constitution to limit state debt.

Until those are resolved, Republicans say they will withhold their votes on the budget they helped write. And that calls into question whether lawmakers can finish by Wednesday, the 30th and final day of a special session.

“We’ve got to have these reforms to help” on the budget vote, Senate Republican Leader Mike Hewitt said. “We don’t have a lot of money right now, so if we can help get the debt down, we’ll have a larger operating budget.”

A closely divided Senate and a handful of Democrats willing to defect have given minority Republicans big leverage that they ordinarily don’t have. Democrats who control the House aren’t interested in the constitutional amendment lowering the debt limit, but they want a budget agreement.

“When you put it in the constitution, you’re doing that for a long time,” House Majority Leader Pat Sullivan said. “I think it would be very difficult for us to get that bill done this year.”

House Democrats have their own to-do list with just one item on it: the budget.

It’s “the only thing we have to get done this year,” said Sullivan, a Democrat from Covington.

BOND PROJECTS JEOPARDIZED

Sullivan said House Democrats aren’t willing to stay in town to save the capital construction budget – another annual piece of legislation that is being blocked over the debt debate.

If debt isn’t addressed, members of the Senate’s bipartisan coalition say they will issue no more than a few hundred million dollars in bonds, rather than the robust $1.4 billion.

Fewer bonds means that building projects at community colleges in Olympia and Lakewood would likely be delayed, and recreation grants wouldn’t be available for projects such as the expansion of Pleasant Glade Community Park in Lacey and a Sumner link in a trail from Seattle to Mount Rainier.

But even if a big bond bill is blocked, there still will be $1.7 billion in cash-funded construction work, covering most public school projects in the state.

Negotiations on the debt issue continued Monday night in the governor’s office.

It looked to be a repeat of marathon weekend negotiations that produced a workers’ compensation agreement. The agreement on cutting costs in the insurance system for injured workers incorporated Gov. Chris Gregoire’s deal-making proposal to offer so-called structured settlements to permanently disabled workers.

For months, House Democrats had blocked a previous version of disability settlements from coming to a vote. After compromising on that issue, they were reluctant to bend on debt, another issue important to organized labor.

Some 49,000 construction-sector jobs would be created or sustained if a full construction budget passes with bonds, according to Rep. Hans Dunshee, D-Snohomish, top House negotiator on the capital budget. But with a tighter limit in place for bond debt, future construction budgets would produce tens of thousands fewer jobs, Dunshee has said.

The debt limit today is 9 percent of general-fund revenues. Senators have proposed shrinking it to as little as 7 percent. They cite the growing share of the budget devoted to interest payments that could otherwise pay for school operations or health care, and State Treasurer Jim McIntire’s assessment that Washington’s debt load is too high.

GOP GOALS

Senate Republicans were not budging on another issue they have insisted on and that labor opposes: new mechanisms for outsourcing back-office work done by state employees.

Democratic Rep. Sam Hunt of Olympia said it was unclear which direction negotiations would go as the Senate insisted on taking away state workers’ rights to compete for work targeted for outsourcing in two new agencies.

The Senate has relented on privatization of functions such as printing, leasing and mail, in a bipartisan bill favored by Gregoire.

Hewitt, the GOP leader, said Republicans made it clear from the beginning of their work with Democrats on the budget that they needed eight major policy changes in law. They have made progress on five fronts, he said: reforming workers’ comp, cracking down on welfare fraud, reserving more revenue during economic booms, tightening eligibility in a children’s health insurance program for immigrants, and reworking teachers’ health benefits.

What remains is the debt limit, outsourcing some work and a measure that would have changed how teachers are laid off.

Jordan Schrader: 360-786-1826
jordan.schrader@thenewstribune.com

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