Clock ticking on schools, overall budget

House seems unlikely to accept Senate’s proposal

Staff writerApril 15, 2013 

With just two weeks left in their 105-day session, Washington lawmakers are running out of time to pass a state budget that puts at least $1 billion more into public schools to answer a state Supreme Court ruling, protects the poor and doesn’t rely on gimmicks.

The Republican-dominated Senate Majority Coalition Caucus said it has already done that, passing a $33.2 billion no-new-tax budget more than a week ago on a 30-to-18 vote. That plan included about $1 billion in new K-12 school funding to answer the court finding that the state was not meeting its duty under its constitution.

But House Democrats – and even some Senate Democrats who voted for the plan – said the GOP plan was defective, laced with gimmicks and could even expose the state to a new constitutional challenge over its shift of school construction money into school operations.

The state treasurer, Jim McIntire, also contends a move to take $166 million from timber trust revenues that are supposed to go to schools is a bad idea because it replaces the grabbed money with bonds. McIntire spokesman Chris McGann said the concern is “it’s using borrowed money to pay for operating costs.’’

“I’m reluctant to put a line in the sand on anything. But when you look at the proposal that passed the Senate, this is the piece that stands out as a real problem. I would say this is at the top of that list,” House Majority Leader Pat Sullivan, D-Covington, said Friday.

Sullivan, who backs a $1.3 billion tax package, argues that the Legislature should step up now and assume more school operating costs directly in the budget – without deferring so many state obligations into future years like the Senate does.

Sullivan also said the Senate budget is making other shaky assumptions. He said in an interview that the Senate is triple counting savings it expects to wring from state agencies – by demanding an administrative cut from agencies, expecting $65 million in savings from “lean management” techniques that even a major proponent such as Gov. Jay Inslee said can’t be counted on, and assuming there will be unspent money at the end of the budget cycle.

But Senate Republican Leader Mark Schoesler of Ritzville shrugs off the criticism and said flatly that constitutional concerns are “just wrong.” Schoesler cites a five-page legal analysis from Senate counsel Steve Jones, a Ways and Means Committee lawyer well respected on both sides of the aisle. In a nutshell, Jones said such grabs of school-construction money were done twice in 1981 and that as long as the money taken is considered “excess” – compared to the actual need for school construction – the move should be constitutional.

Republicans say the transferred amount is in excess of what is needed today.

“I think Republicans and Democrats respect Steve Jones’ opinion,” Schoesler said. “I’m sure if you want to torpedo someone’s budget, you go around spreading vicious rumors.”

But Jones’ formal analysis also notes that issuing bonds to replace the shifted money “represents a shift of costs into the future, with attendant public policy concerns.’’

Schoesler brushes off House Democrats’ other criticism that the Senate budget has holes, because some of the assumed savings in state operations are phantom cuts. He said the House budget has even more uncertainty – if Democrats can’t find votes for taxes or for its fund raids.

The Democrats’ $1.3 billion tax proposal, which is a little larger than Gov. Jay Inslee’s tax plan, includes a controversial move to make permanent what are now temporary tax surcharges on service businesses. It also changes a temporary tax on major-label beer into a smaller but permanent levy that also hits craft brewers, and it proposes to close a slew of tax breaks for various industries.

“They haven’t even introduced a tax bill yet, have they?” Schoesler asked.

Indeed, the hour is getting late to put specifics on the table, and a spokeswoman for House Democrats said the dates for introducing and then giving public hearings to the tax bills have not yet been decided.

Rep. Gary Alexander, the ranking House Republican on budgets, said there may be hearings on tax bills but he doubts the Democrats will even bring a substantial tax package up for a House floor vote.

The Democrats’ budget also assumes a $575 million raid of the state’s rainy day fund, which requires a supermajority of 60 votes. The Democrats have only 55 seats, and House Appropriations chair Ross Hunter, D-Medina, said last week: “I don’t have 60 votes.”

With a standoff in the cards, Schoesler, a patient wheat farmer from Ritzville, was giving every indication that the Majority Coalition Caucus, which has 23 GOP and two Democratic members, will hold firm on its no-new-taxes stance.

But he said there are reforms the Senate would still like the House to move.

Among those that the Majority Coalition Caucus has highlighted previously are school reforms that include an A-to-F grading system for public school performance; changes to collective bargaining laws to let the Department of Enterprise Services contract directly with the private sector for technology services such as software; changes to the state-run workers’ compensation system that lower costs for business two years after other reforms were adopted; permanent repeal of a paid family leave law that has never been funded; and others.

“They may have their list but we’ve got lists as well,” Sullivan said.

Among them: a voting rights act, a state Dream Act allowing state need grants be given to undocumented residents that graduate from Washington high schools, and the Reproductive Parity Act that requires insurers to cover abortion if they also cover maternity. Republicans killed all three in committees.

“We are pretty far apart,” Sullivan said. “There is no question about that.” Brad Shannon: 360-753-1688 bshannon@theolympian.com

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