OLYMPIA — The Legislature adjourned Tuesday for the second time this year without a budget agreement, and will return Wednesday to continue its work in a second overtime session called by Gov. Jay Inslee.
Earlier, Inslee said that his Cabinet and his financial office would meet Wednesday afternoon to discuss how to handle a potential government shutdown if a state budget is not signed by midnight June 30, when the current budget cycle ends.
Both the House and Senate have passed budget proposals within the past week, but they have been unable to agree on a final deal.
“If there is not a budget by July 1, the law doesn’t allow us to keep government operating fully,” Inslee said. “This would have significant ramifications for the millions of citizens who depend on state services.”
Inslee said there would be a review of government services to see which ones may be constitutionally mandated, and noted that more than 50,000 state employees who would potentially face furloughs would need to be notified in advance.
“This is uncharted ground,” Inslee said of a potential government shutdown.
Inslee placed the blame squarely on the Senate majority, which comprises 23 Republicans and two Democrats, saying that the reason the state was heading into a second special session was “the inevitable result of the lack of substantive compromise by the Senate majority.”
Inslee cited a budget passed last week by the Democratic-controlled House that backed away from several hundred millions of dollars in taxes that was opposed by the Senate majority, compared to a Senate budget that passed over the weekend that made some concessions on revenue, but only if policy bills on issues like workers’ compensation were addressed first.
“One side is not insisting on ideological policy, one side is,” Inslee said.
Inslee said that while there were several policy bills that he and fellow Democrats initially wanted to see passed, he backed away from pushing them during the special session because “the budget, and funding education, is our priority and our paramount duty and that’s where our focus needs to be.”
Sen. Rodney Tom, D-Medina, who leads the GOP-dominated Majority Coalition Caucus, said that his caucus has already compromised on things like Medicaid expansion and fulfillment of collective bargaining pay agreements for state employees. He said that accepting even the idea of revenue is also a compromise.
“We have made significant movement in trying to come together with a deal, realizing that if we’re going to get out of here there probably has to be revenue on the table,” he said. “But from our standpoint, there also needs to be reforms.”
Tom insisted a deal could be had in the coming weeks and called talk of a government shutdown “nonsense.”
“It’s not going to happen,” he said.
However, in preparation for the worst-case scenario, the House voted Monday to approve a temporary capital budget plan to ensure that crews would continue working on previously approved infrastructure projects even in the event of a government shutdown.
Two billion-dollar holes
Lawmakers have been working on a budget solution since the beginning of the year, looking to mend a roughly $1 billion shortfall for the two-year cycle that ends June 30, 2015. They’ve also been looking to add another $1 billion to the state’s education system in response to an order from the state Supreme Court.
The Senate has said it would make some concessions on revenue that the House wants if some bills that the Senate wants are passed, including one to expand the use of settlements in the state workers’ compensation system, one to give principals the power to reject the placement of specific teachers in their schools and another that would limit the growth of noneducation spending in future budgets.
Another deadline state officials are facing is Thursday, when state officials say they’ll start sending out millions of dollars in refund checks because of a court ruling on the estate tax — even though lawmakers have been considering a patch to keep that money. The legislative fix is one of the bills that the Senate majority has offered in exchange for the reform bills they are seeking.
The bill is a legislative workaround to last year’s ruling by the high court, which found that the estate tax did not apply to married couples who had used a certain estate planning tool prior to 2005. Officials say that if a fix isn’t made to the law, it could cost the state $160 million over the next two years.
