Lawmakers have $2 billion in problems this biennium

Budget, including court-ordered funding of schools, will be defining topic

Staff writersJanuary 13, 2013 

The Legislature opens another session at noon Monday facing greater-than-usual uncertainty.

November’s election kept Democrats in control of the Governor’s Mansion and maintained their majorities in the House and Senate. But after two Senate Democrats said they would caucus with 23 Republicans to create a new majority coalition, it’s unclear now who has the upper hand going into session negotiations on the top issues – the budget and school funding.

The 147 lawmakers converging on Olympia include 21 new House members and 12 new senators, including one Democratic appointee yet to be named. And the Legislature will be dealing with a state bureaucracy full of new leaders, as Jay Inslee’s administration moves in.

INSLEE’S AGENDA?

Gov.-elect Inslee has unveiled a few of his ideas, with a heavy emphasis on promoting clean energy and helping businesses through tax credits and technical aid.

“My focus is job creation. I’m going to focus like a laser beam on the things a governor can do” for business, the Democrat told reporters Thursday at the annual Associated Press Legislative Preview.

Inslee says his goal is to put $1 billion of new money into the K-12 public school system – though he says he is giving no guarantees that will all come this year.

He contends it won’t require raising general taxes. Instead, the Democrat campaigned on a platform of promoting government efficiency and tamping down the growth of medical costs. He wants to encouraging preventive health care and expand state agencies’ use of Lean management pioneered by Toyota.

He also favors closure of tax breaks to raise additional revenues, but has given few examples of those that might be ended, such as an exemption on sales of semen for artificial insemination of livestock.

WHO’S IN CHARGE IN THE SENATE?

Even though there are more Democrats than Republicans, the GOP-dominated coalition is in charge – as long as it can keep all 25 of its members united.

The group made breakaway Democrat Rodney Tom of Medina the majority leader and is offering minority Democrats a supporting role in the form of six committee chairmanships and three co-chairmanships.

But Democrats have so far spurned the proposed power sharing, saying anything that Democrat-led committees approved could then be killed in more powerful committees that are stacked against them.

Individual Democrats still could take the coalition up on their offers. Leaders of both caucuses say they believe some will.

“We keep getting calls from different members saying yes, they would like to be a chair,” Tom said at the AP forum. Sitting beside him was the Democratic leader, Ed Murray of Seattle, who acknowledged: “There are some members who I think will take chairmanships.”

WHAT HAPPENS ON THE FIRST DAY IN THE SENATE?

The new majority coalition is expected to offer motions to change Senate rules and let the coalition appoint its leaders.

Under current Senate rules, which Democrats say must be honored until a vote is taken to change them, the group with the most members is automatically the majority caucus. Last week, Democrats were still mulling what counter-motions they might propose.

In other potential first-day tests of the alliance’s ability to hang together, senators will be sworn in and are expected to name breakaway Democrat Tim Sheldon of Potlatch to serve as presiding officer anytime Lt. Gov. Brad Owen is absent, and to place an aide to outgoing GOP Attorney General Rob McKenna, Hunter Goodman, in the key administrative role as Senate secretary.

Committees likely will be named that day, Tom said in an interview. He said his coalition wants to “make Monday a non-event,” avoiding “what people would consider (a) poke in the eyes.”

Senate Democrats likely will be one member short on Day One. Pierce and Kitsap county elected officials are expected to wait until at least Thursday to meet to pick a successor to Sen. Derek Kilmer, D-Gig Harbor, who was elected to Congress.

The new majority’s 25-24 edge marks the fifth time in 30 years that Republicans have – in effect – won a majority, part of a historical seesaw that has seen the GOP edge never exceed a 26-to-23 margin. “I would be shocked if there were another state in the country that had (as many) changes in 30 years,’’ said Brad Hendrickson, deputy secretary of the Senate who started working at the Legislature in 1982.

DOMINANT ISSUES

Writing the next two-year budget is always the big fixation during the longer, 105-day legislative sessions that fall on odd-numbered years. But a year ago, the state Supreme Court said the Legislature is still failing to meet its constitutional duty to amply fund K-12 public schools.

How to meet the court’s demands is liable to dwarf every other issue that comes up as lawmakers look to bridge a budget gap of at least $2 billion and perhaps more, depending who is asked.

With such a shortage of funds, a divided Senate and new governor in town, there is little chance that a clear outline of the eventual budget solution will emerge before the March 20 update of state revenue.

Other potential top issues: expanding Medicaid under federal health care reform to cover more than 300,000 additional people; raising tuition at universities and colleges; requiring insurance plans to cover abortion; gun control; state employee contracts for pay and benefits; public-employee pensions; Puget Sound cleanup; changes to the worker compensation system; and even the death penalty.

Tom says his coalition in the Senate will push to keep the session’s focus on jobs, the budget, education and streamlining government and avoid anything else that threatens to become a major distraction.

Changes on his wish list include eliminating what he sees as unneeded regulations; moving away from pension plans that offer retirees a guaranteed benefit toward 401(k)-type plans that many workers in the private sector receive; and paying teachers differently based on the subjects they teach or their performance evaluations.

Sen. Steve Litzow, the Mercer Island Republican who is the coalition’s new education chairman, wants to look at giving principals more control over who’s hired at their schools and putting limits on the kinds of issues that can be bargained between school districts and their employees.

The Democrats who control the House may take a dim view of such changes. On changes to the use of teacher evaluations, for example, House Speaker Frank Chopp, D-Seattle, said recent laws on teacher evaluations should be implemented before adding more.

WILL INSLEE KEEP PROMISE TO NOT RAISE TAXES?

Tom thinks they will avoid raising taxes. “With the governor’s promises of no new revenue, I don’t think revenue’s going to be on the table,” he said in an interview.

But House Appropriations chairman Ross Hunter, D-Medina, says he doesn’t believe the state can meet the court’s education ruling and avoid harming people who rely on popular programs.

And Reuven Carlyle, a Seattle Democrat chairing the new House Finance Committee, wants to lead a discussion of revenue options — including closure of tax exemptions, believing some are not justified.

Inslee’s transition team has said extending temporary tax surcharges enacted in 2010 is not the same as raising new taxes. It remains to be seen if Inslee would see that as a realistic revenue option.

Don Brunell of the Association of Washington Business and Patrick Connor of the National Federation of Independent Business both say the tax question is among their groups’ top worries for the session.

Outgoing Gov. Chris Gregoire laid out a no-tax budget option that includes many cuts, and Olympia Sen. Karen Fraser, chair of the Senate Democratic Caucus, said, “there are some members who feel very strongly that these cuts are unconscionable and if we are really going to improve K-12, we need more revenue. Higher-education people have said the only way to prevent tuition increases is more revenue for them.’’

WILL THE TAX HIKES NEED SUPERMAJORITIES?

It takes two-thirds of the House and two-thirds of the Senate to raise taxes. But the state Supreme Court is considering whether that voter-imposed requirement is allowable under the state Constitution.

If justices make their decision known in the next few months, it could shake up the dynamics of the session.

Another option is a tax referendum, which avoids the new governor and could be done with simple majorities of both the House and Senate.

Greg Devereux, executive leader of the Washington Federation of State Employees, said a coalition that supports new revenue still is toying with the idea of an initiative that bypasses the Legislature. Past talk of such a ballot option has not led to any initiatives.

COST OF DRIVING RISING?

One possibility Inslee explicitly did not rule out on the campaign trail was asking voters for more transportation taxes.

Transportation officials say the state is falling behind on its ability to maintain its roads, buses, ferry routes and other infrastructure, and needs new funding to preserve that system and build major new projects. Among the ideas on the table are a fuel tax increase and a statewide vehicle excise tax.

But attempts to raise taxes for the state’s general fund would make it harder to pass transportation taxes. “Nobody thinks there’s going to be both,” said Sen.-elect Bruce Dammeier, R-Puyallup.

Gregoire also proposed a school-transportation funding idea that would add an excise tax to the wholesale cost of gasoline and diesel fuel. Her plan might be dead, lacking support from Senate Republicans.

THURSTON PRIORITIES

The Thurston County delegation includes Sen. Karen Fraser of Thurston County as Senate Democratic Caucus chair, Democratic Rep. Sam Hunt of Olympia as chairman of the House State Government and Tribal Affairs Committee, Republican Rep. Gary Alexander of Thurston County as ranking minority member of House Appropriations, and Democratic Rep. Kathy Haigh of Shelton as chair of the Appropriations Subcommittee on Education.

Fraser said the top priority for the 22nd District, which includes Olympia, Lacey and Tumwater, is protecting state employees and ending the 3 percent reductions in pay and hours worked that began in July 2011 for most of the state’s nearly 60,000 general workers.

That temporary pay cut ends in June, and Gregoire negotiated contracts with more than two dozen public employee unions that could allow 1 percent pay increases in July 2014 if state revenues reach a certain benchmark level.

Still undecided is what kind of health care benefits public-sector workers, who now pay 15 percent of premiums, will receive. And there are rumblings of pension changes that make the lawmakers leery. Hunt said there also is interest in retaining operating funds for South Puget Sound Community College and The Evergreen State College.

Fraser and Hunt said there are a few local capital projects the delegation would fight for, including a $1 million grant sought by the Thurston County Food Bank to help it pay for a new building. Another is $816,000 sought from the Building for the Arts program to assist repairs to The Washington Center for the Performing Arts in Olympia, Fraser said.

Hunt listed the demolition of the old General Administration Building on the Capitol Campus, the Heritage Center project that would replace it; and keeping funds to dredge Capitol Lake.

Jordan Schrader: 360-786-1826 Brad Shannon: 360-753-1688

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