No deal on budget crisis; special session set May 12

By David Postman and Ralph Thomas
Seattle Times staff reporters


OLYMPIA, WA— The Legislature failed last night to agree on a fix for the state's worst budget shortfall in decades. In a battle of numbers, a projected $2.6 billion deficit looked like it would outlast the 105 days of the legislative session and the millions of special-interest dollars spent lobbying lawmakers on the budget.
The dispute will be settled in special session. In a meeting last night, Gov. Gary Locke and legislative leaders agreed to convene a special session May 12.

The regular session adjourned shortly after 11:30 p.m. with the Republican-controlled Senate holding to its promise not to raise taxes and the Democratic House saying it wanted to increase taxes on candy, gum, cigarettes and liquor in order to spend some $400 million more than Republicans want.

Democrats want to raise salaries for teachers and public employees. Republicans don't.

Republicans want to renew tax breaks for high-tech and biotech industries. Democrats don't.

The governor issued a proclamation with a lengthy list of issues to be dealt with in the special session. On the agenda will be charter schools and what Locke said was substantial work left undone on school testing and other education issues, as well as bills dealing with new terrorism crimes, gay rights, water law, prescription drugs, unemployment insurance, workers' compensation, community-development financing and a new issue — a proposal to allow shared leave time for state employees serving in the military.

And a second special session may be needed to deal with workers' compensation and unemployment insurance. Those are priorities of Boeing, whose executives have told lawmakers they want to see action on them soon as a sign that the state will be more business-friendly.

In addition to the operating budget, lawmakers failed to complete work on a $2.7 billion construction budget that will be included in the special session.

Gambling is likely to take a higher profile in the special session. It was in the background throughout the regular session as the Entertainment Industry Coalition (EIC), a group of bingo-hall, bar, restaurant, bowling-alley and cardroom operators, pushed to get the same electronic slot machines Washington tribes now have in casinos.

Yesterday, the Washington Education Association (WEA), the state's largest teachers union, joined forces with the EIC.

WEA executive Bob Maier said the union would push the EIC plan in the special session so long as the money would be dedicated to teachers' salaries.

"That's a hoot," House Majority Leader Lynn Kessler, D-Hoquiam, said of the new alliance. "But hey, that's what makes this place so interesting."

Locke last night said he supports allowing the state lottery to expand Keno games to every four minutes using online terminals.

House budget writers had proposed the expanded Keno as a way to help fund their plan. But it was dropped at the last minute when Democratic leaders said they could not get the 50 votes needed to approve it.

Locke's support will lend more heft to that movement.

The teachers' involvement and Locke's comments worry anti-gambling forces.

King County Prosecutor Norm Maleng, a leader of Citizens Against Gambling Expansion, called it irresponsible for the teachers union to turn to gambling — which he said has a disproportionate impact on poor families — as a funding source.

Lawmakers settled one issue that has vexed them for years. Late Saturday, they agreed to raise the state gas tax by a nickel per gallon in order to pay for $4.1 billion worth of transportation-improvement projects over the next 10 years.

Locke said lawmakers should be able to strike a budget deal before the special session. But it was unclear whether the two sides would even come to the table.

Senate Ways and Means Chairman Dino Rossi has said he will not begin negotiating with the House Democrats until they pass all the pieces of their budget. Besides Keno, the House last night could not muster the votes to suspend two voter-approved initiatives that mandate teacher pay raises and boost funding for class-size reduction efforts. The Senate passed such measures weeks ago.

"I'm not negotiating on something they can't do," said Rossi.

House Speaker Frank Chopp said the House will pass the rest of its budget bills in special session and shrugged at news that Rossi would refuse to come to the bargaining table.

"I'm hopeful that he'll be there, because we'll be there," said Chopp, D-Seattle.

The Senate passed its budget on a bipartisan vote April 4. But the ruling House Democrats argued among themselves until finally agreeing to a plan late Saturday.

"Obviously, when one body puts out their budget on the 104th day of a 105-day session, that doesn't give us much chance," Rossi said.

Outside the House and Senate chambers yesterday was a hint of why it was difficult to settle the budget issues.

Lobbyists from a broad array of interests milled about. Labor groups who had led the charge for the House budget worked to see if there was a way to get the Senate to go along with the plan that would give their public-employee members raises.

Business lobbyists bolstered Republicans to stick to their no-tax pledge, and pushed for renewal of business tax breaks.

Some groups were unusually blunt in efforts to sway lawmakers.

The teachers union, for instance, ran ads pressuring individual House members — mainly Democrats — to protect teacher pay raises. The teachers union also said it would cut off campaign donations to Democrats who did not support raises.

The Service Employees International Union (SEIU) was equally aggressive in pressing lawmakers to approve a $2.07 hourly raise over the next two years for the state's 26,000 recently unionized home health-care workers.

The SEIU jammed committee hearings with home-care workers and their disabled or elderly clients. The union bombarded lawmakers with e-mails, phone calls and faxes, ran TV ads and even held a demonstration outside one senator's home.

As of April 1, unions representing teachers and other public workers had spent nearly $2 million lobbying the Legislature.

On the other side, business groups spent millions more trying to persuade lawmakers to hold the line on taxes and grant new tax exemptions. Tax increases would only prolong the state's economic woes, they warned.

A broad coalition of business groups ran newspaper ads calling on House Democrats to follow the lead of Locke and the Senate and pass a budget without new taxes.

Lt. Gov. Brad Owen said the pressure and constant presence of lobbyists makes it difficult for either side to compromise. It looks too much like caving in to your patrons, he said.

He remembered the last time there was a tax increase. It was 1993 and Owen was a conservative Democratic senator. The session dragged on with no fix to a projected budget deficit until a plan to raise business taxes emerged late one night.

Owen said it came after lawmakers closed themselves off from the hordes of lobbyists.

"You just have to get together by yourself without any of the lobbyist community around," Owen said. Then, when there is compromise and a deal is struck, "Everyone swallows and takes the hard vote."

That wasn't happening last night.

Senate Majority Leader James West, R-Spokane, said the budget dispute is a reflection of a healthy political system. "That's a tug-of-war of philosophies, not a tug-of-war of interest groups," he said.

Social-service lobbyists felt squeezed between the powerful groups backing Democrats and Republicans.

"There is a single biggest loser in both budgets, and it's health care," said Lonnie Johns-Brown, a health and social-service lobbyist. "We're going to increase the number of uninsured by tens of thousands."

Her issues don't fit comfortably with those of either side's financial and political patrons. "I understand that people need to take care of the strongest components of their base," Johns-Brown said. "You just don't sacrifice everything else."

David Postman: 360-943-9882 or Seattle Times staff reporter Andrew Garber contributed to this report.

Copyright © 2003 The Seattle Times Company


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