This special session was inevitable

The Legislature is high-centered politically on school funding once again. Lawmakers adjourned Friday without a budget deal. There is little hope for an easy compromise when lawmakers return to the Capitol mid-week.

Gov. Jay Inslee called for a 30-day special session to begin Wednesday. It is necessary in part because the Republican-controlled Senate is refusing to consider a capital gains tax, and the Democrat-controlled House is insisting new taxes are needed to pay for higher spending and avoid gimmicks in the Senate budget. Until the House votes on such a tax, or drops it, the Senate is refusing to negotiate.

Sen. Andy Hill, a Redmond Republican and top budget writer on the Senate Ways and Means Committee, says he’s signaled to Democrats a willingness to meet partway on revenue. He said he offered a significant move, but during a meeting with our editorial board he declined to say what share of Democrats’ $1.4 billion tax plan it might represent.

Hill said in any case the Senate won’t accept the capital gains tax or a hike in business taxes.

But in a sign of the difficulties ahead, House Appropriations Committee chairman Ross Hunter, D-Medina, said Hill’s proposal was too small — in the neighborhood of $200 million to $300 million — to provide the sustainable level of revenue needed for schools during the next two biennia.

A version of this gridlock happened two years ago. As budget talks inched into June during two special sessions, Inslee’s administration made preparations for a possible government shutdown. Most Democratic tax proposals died; the Senate accepted changes to the estate taxes and increases in telecommunications taxes.

Lawmakers can’t fiddle forever. A Supreme Court order issued last year held the Legislature in contempt and justices set a Monday deadline for a response to its threat to impose sanctions. Sanctions were never specified.

Attorney General Bob Ferguson’s legal team is planning to send its report to the court — on behalf of lawmakers — and to ask the court’s nine justices for additional time, which he’s confident he can win.

The state’s 295 school districts need to know their funding levels for 2015-17 as they go about issuing teacher contracts for the next school year. But there are good reasons the justices might give lawmakers more time before perhaps freezing their pay or taking some other step to show legislators the court is serious.

One reason for showing patience is that the political differences on taxes are huge — especially with a Senate Republican majority that campaigned on a no-new-taxes platform last November and gained a seat. The House Democratic majority lost a few seats. Just as Democrats may be unable to get a large tax bill through the Senate, the Republicans won’t get their Senate budget, which rejects state worker contracts, through the House — and they might not even get it through their own chamber.

Second, there is some progress being. Both the Senate and House have proposed about $1.3 billion in new spending for K-12 education specifically to address the court’s concerns in the McCleary case. They — and Inslee — roughly agree on the amount.

The real difference is taxes — with the House and Democratic governor seeking a capital gains tax on high earners, which we strongly support, and other tariffs. The Senate’s GOP majority adamantly opposes this, even though a tax on stock market windfalls would raise revenue and begin to rebalance a state tax code that puts a U.S.-worst burden on low-income families.

A few new ideas have begun emerging in the past two weeks. The big one — from Republican Sen. Bruce Dammeier of Puyallup — bars the use of local voter-approved levies for the basic education share of school salaries. His plan raises taxes significantly in some districts, while lowering them in others, and it needs further refinement.

But it is one piece in a much larger puzzle and one we hope both parties can start to consider as they begin inching toward the compromise that justices, and voters, want to see.