Politics & Government

Senate scuffle leaves $2 billion hole in day-old $38 billion operating budget

Gov. Jay Inslee signed a new $38.2 billion budget into law Tuesday evening, but by early Wednesday morning, it already had a $2 billion hole in it.

The two-year spending plan hinges on the Legislature delaying Initiative 1351, the measure to lower class sizes that voters approved in November. But in an unexpected development, the state Senate shot down a crucial bill Wednesday morning that would delay the initiative for the next four years.

Now the state has an operating budget that doesn’t balance — something that may or may not be an urgent problem, depending on which person you ask.

Delaying the initiative — something already approved by the state House, and counted on in the Legislature’s approved budget — would save the state $2 billion over two years.

Yet while leaders of the Republican-controlled Senate decried the budget as illegal Wednesday, House leaders said the Legislature could potentially return in January 2016 to find a solution to their I-1351 dilemma.

“There are ways you could deal with it until then,” said House Majority Leader Pat Sullivan, D-Covington, early Wednesday morning.

Senate Majority Leader Mark Schoesler, R-Ritzville, called that “a very large risk.”

“Do you really want to gamble on $2 billion that we cannot possibly find? I think that’s a reckless way to run a state,” Schoesler said Wednesday.

Lawmakers, now in the middle of a third overtime session that began Sunday, have broken a record set in 2001 for most days in session during a single year. They had to go into overtime in April after adjourning their regular 105-day session without an agreement on an operating budget.

Now, it’s I-1351 that is keeping them in Olympia.

The stalemate over I-1351 also is holding up progress on remaining parts of a 16-year transportation package in the state House, as well as a bonding bill that pays for more than half of the construction budget Inslee signed into law Tuesday.

While the entire budget deal appeared sewn up over the weekend, it fell apart this week in the Senate Democratic Caucus room.

Sen. Andy Billig, D-Spokane, said Tuesday that some Senate Democrats didn’t want to scale back the I-1351 class-size reductions unless they made other changes they thought would help students.

Democrats said they could muster the required votes if Senate Republicans would approve a school testing reform bill that already cleared the House. Among other things, that legislation would remove a requirement that students pass a biology test or an approved alternative to graduate from high school, which supporters said would help 2,000 of this year’s seniors earn a diploma.

Amending the initiative would require a two-thirds majority vote in the closely divided chamber.

“There are some members who are saying, if I’m doing something that hurts kids, I want to be able to help kids somehow,” Billig said Tuesday.

The measure to delay I-1351 failed on the Senate floor at about 6 a.m. Wednesday on a 27-17 vote, following a long night of negotiations.

A few Senate Democrats, including Sen. Jim Hargrove, D-Hoquiam, and Sen. Jeannie Darneille, D-Tacoma, favored delaying the initiative. Hargrove said leaving I-1351 and its $2 billion price tag on the books could force the Legislature to cut important social programs down the road.

Sen. Bruce Dammeier, R-Puyallup, said his caucus offered “to relieve the class of 2015 of the biology requirement, just to get us out the door, just to get us finished.”

“We put that out there. They rejected it,” Dammeier said.

Following the vote, Senate budget writer Andy Hill, R-Redmond, said that Senate Democrats reneged on the bipartisan budget deal reached over the weekend. Schoesler, the Senate majority leader, called Democrats’ demands “extortion.”

“The agreement is the two sides get the votes together and do it, and the agreement was broken,” Hill said.

Hill said as a result, the state’s budget now doesn’t comply with statutory requirements that it balance over four years.

However, there aren’t really any concrete consequences to violating that part of the law, said David Schumacher, Inslee’s budget director.

Schumacher compared it to another requirement in statute that the Legislature pass a budget by June 1 — something lawmakers haven’t accomplished in their past two budget-writing sessions.

He said the state’s two-year budget cycle gives lawmakers ample time to figure out what to do with I-1351. Lawmakers could solve the problem later in their current overtime session, which is scheduled to end July 27, or sometime over the next year, Schumacher said.

Still, Inslee would prefer that lawmakers find a solution for I-1351 “sooner rather than later,” said Jaime Smith, spokeswoman for the governor’s office. Smith said the governor is hoping lawmakers agree on a way fix the problem this month, before their current special session ends.

“They’ve had more than enough time at this point to figure it out,” Smith said. “If they don’t figure it out by then, it’s hard to see how any additional time would make it easier.”

Staff writer Jordan Schrader contributed to this report.