Not-so-diplomatic behavior during special session

The special session this week kind of reminded me of bird hunting: just because you don’t see or hear the birds doesn’t mean they’re not there.

It’s true there wasn’t much to see or hear at the Capitol this week – not outwardly, that is. However, there was no shortage of activity in offices such as mine. Let me back up a few years to explain.

In 2009, when Democrats firmly controlled the Senate and the House of Representatives, a budget wasn’t seen publicly until just two days were left in the legislative session.

The following day that budget was voted on in each legislative chamber, and poof! – A 515-page document that didn’t exist 48 hours earlier was suddenly headed for the governor’s desk. Such rubber-stamping leaves agencies, local governments, the business community and others (including some lawmakers) scrambling to catch up with the details after the fact.

Now let’s return to Friday, March 23. The bipartisan Senate coalition put a revised budget proposal on the table more than a week ago, meaning everyone has had time to take a good long look and come up with questions.

As one of the coalition’s budget negotiators, I’ve spent many hours this week addressing budget-related questions from a range of folks, from the Association of Washington Cities to the Department of Ecology; this is in addition to my duties as Senate Republican floor leader, which require me to be in or close to the Senate chamber each day even when we’re in a special session.

That’s why it’ll be Friday afternoon before I can head back for a weekend in Ritzville. But as long as the pass is navigable, the drive should be at least a little more scenic than it’s been these past few months – after all, spring has sprung!

What’s happening with the state budget?

Budget meetings have taken place each day in this second week of the special session; that’s a change from the final week of the regular session and the first week of the special session. However, these aren’t traditional budget meetings, because all five “corners” of the lawmaking process (both the Senate Republican and Democrat caucuses, both caucuses in the House of Representatives and the governor’s office) are represented.

As I mentioned in my previous commentary, the talks should be limited to the bipartisan Senate coalition and the House Democrats, because they’re the two groups that passed budgets this session. For some reason the governor seems to believe the more, the merrier. It’s interesting that she has injected herself into the talks considering she initially wasn’t interested in negotiating with the bipartisan Senate coalition. Either way, I hope these meetings produce a final budget agreement sooner than later.

News reports about the budget situation have tended to focus on one element in the budget adopted by the House of Representatives and two associated with the bipartisan Senate budget proposal. Here’s a brief description of each, from my perspective.

• House budget cuts basic-education funding.

Each month school districts receive money from the state for basic education. The House budget would not make this $330 million payment for June 2013, and spend that $330 million on other non-education items. House leaders and others claim this is not a cut but a “delay.” However, that’s only true if the next Legislature chooses to backfill the lost millions, and this Legislature can’t guarantee that.

• Senate budget makes money-saving pension change.

Last year the governor requested legislation to change the early-retirement options available to new public employees who enroll in the “Plan 2” and “Plan 3” pension plans. This change would not affect current enrollees, and would save the state and local governments an estimated $2.3 billion during the next 25 years. Although Democrats on the House budget committee overwhelmingly supported the change, it did not go any further in 2011. The bipartisan Senate budget proposal revives this idea and improves it by redirecting approximately $1.9 billion of those savings (state dollars, not employee contributions) toward “Plan 1,” the state pension system that was closed to new enrollment back in 1977 but remains at risk because of chronic underfunding during the 1970s and 1980s. Because this approach would pay off the “Plan 1” liability sooner than current law requires, the Senate proposal also would hold off on making the 2013 payment to “Plan 1” (approximately $143 million), freeing that money for use on priorities such as education.

• Senate budget package helps school employees afford medical coverage.

General-government employees buy their health-care coverage through a consolidated health-care purchasing system (often referred as an insurance “pool”); our budget proposal supports the creation of a similar system for school-district employees, most of whom are now limited to plans purchased at the district level and coverage from just one insurance carrier.

This change (Senate Bill 6442), which is strongly supported by the union representing classified district employees (those working outside the classroom), would offer new money-saving choices to teachers as well as classified employees.

For instance, a K-12 employee in 2009-10 was paying an average of $500/month for family coverage (employee, spouse, children). In comparison, a general-government employee in 2012 pays an average of $217/month for family coverage. The way I see it, saving $300 a month on medical-insurance premiums is no different than getting a pay-raise of $300 a month.

SB 6442 is coming under heavy attack by those who would profit from keeping their 50-year monopoly in place, but claims that it amounts to a “state takeover” of teachers’ health care are nonsense. Teachers would simply be able to choose among private health-insurance policies through the private market, just as state employees do, and probably save a bunch of money in the process.

I understand the focus on these elements of the two budgets; however, the big difference I see is that the House budget is likely to lead to an automatic budget deficit next year – around $2.1 billion – because it spends more than the state expects to collect in revenue. The Senate budget proposal is not expected to lead to a budget gap next year; in fact, indications are it would leave the next Legislature money ahead.

Every year since I became your state senator the Legislature has started its regular sessions staring at a massive budget shortfall. It would be great to reverse that trend, which is one of the big reasons why the Senate budget proposal makes more sense.

Please, not the tobacco ‘gimmick’ again…

It’s been 10 years since the Senate majority leader, when she was the Senate Democrat budget writer, endorsed what many view as the worst gimmick ever used to balance a state budget.

To generate quick cash, she proposed selling off a portion of Washington’s share of the national tobacco settlement – money that was going to each state as a result of a lawsuit against tobacco companies.

Governor Gregoire, who had helped negotiate the tobacco settlement when she was state attorney general, was strongly opposed to the move but in the end gave in and signed that budget.

The state received about 27 cents on the dollar for what it sold off; if I remember correctly that decision has cost about $100 million a year since, meaning there would automatically be $100 million more in revenue to appropriate or save each year if the “securitization” had not happened.

It’s almost incredible, then, that the securitization idea is being floated again a decade later by a pair of Senate Democrats from Seattle. Their bill, introduced Friday, would let the governor sell off enough of what’s left of Washington’s share of the settlement to generate $350 million.

The bill’s prime sponsor says she wants to “offer an option to the budget negotiators.” As one of the negotiators, I say it’s an offer we can do without.

However, it does go to show you just how far some legislators would go to avoid bringing state government’s spending into line with the revenue that is already coming in – as in, don’t spend more than we have – even though that’s crucial to finally getting away from having a perennial budget crisis.