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Friday, June 6, 2003 - Page updated at 12:00 AM

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House stamps OK on budget, one with definite GOP look

Seattle Times Olympia bureau

OLYMPIA — The Legislature's months-long struggle to close the worst budget shortfall in decades ended in anticlimactic fashion yesterday, when the House voted overwhelmingly — and with no debate — for a compromise $23 billion spending plan.

The budget calls for no significant tax increases. Instead, it relies almost entirely on spending cuts and freezes to plug a projected $2.65 billion deficit in the two-year budget that takes effect July 1.

The compromise, shaped over three weeks by negotiators from the Democratic-led House and Republican-led Senate, has been widely billed as a bipartisan plan.

But it's clear from the vote counts in both chambers that the budget was more appealing to Republicans, even though it closely resembles the plan proposed by Democratic Gov. Gary Locke.

Though the budget cleared the House on a solid 67-30 vote, 24 of the "no" votes were cast by Democrats, many of them among the Legislature's most liberal members. In the Senate, five of 24 Democrats voted "yes."

"(The budget) really does reflect our major priorities," said Rep. Barry Sehlin of Oak Harbor, the ranking Republican on the House Appropriations Committee. Sehlin said the top priority was to fend off tax increases.

House Democratic leaders fought hard for a state budget that would require taxpayers to lend a hand in solving the shortfall.

They floated a wide assortment of ideas for new taxes, including a sales-tax increase, new taxes on candy and gum and another bump in cigarette taxes.

Senate Republicans refused to accept new taxes, though they did agree to a smattering of revenue-generating provisions, such as raising prices at state-run liquor stores by an average 42 cents per liter and hiring additional tax auditors.

Democrats also lost out on efforts to get cost-of-living raises for all teachers, state workers and higher-education employees. And they were unable to help the state's 26,000 newly unionized home-health-care workers win approval for their first contract, which promised pay raises and health-care benefits.

Despite the setbacks, Democratic leaders said they could claim some victories.

Though the home-care contract was rejected, Democrats got Republicans to go along with a 75-cents-an-hour raise for the workers. They got the Senate to abandon a proposal to dump nearly 40,000 children from Medicaid and another to eliminate state-funded prenatal care for illegal immigrants.

"This is a reasonable package," said Rep. Jim McIntire, D-Seattle, one of the main proponents for a sales-tax increase. "I would like to have seen more revenue, but we just did not have the votes. It was time for us to recognize that."

The budget, which passed the Senate late Wednesday, now goes to Locke, who praised the compromise package and pointed out that many parts closely resemble the "Priorities of Government" budget he proposed in December.

"There are many good programs we simply cannot afford to fund now because of a $2.6 billion budget shortfall," Locke said in a written statement. "It wasn't easy for me to propose these difficult solutions, and I know it was hard for the Legislature to enact them. But it had to be done."

The budget leaves about $300 million in state reserves. The state expects to receive an additional $400 million under a relief bill Congress approved last week.

But much of that cushion might be gone soon. Legislative budget leaders believe the state's next two revenue forecasts — one due this month and another in September — will show more downturns in tax collections.

In fact, Senate Ways and Means Chairman Dino Rossi, R-Sammamish, predicted that by the time lawmakers return in January, the state will be scraping the bottom of its reserves.

"Oh, I don't think it's going to be quite that bad," said House Majority Lynn Kessler, D-Hoquiam. "But I'm glad we left a healthy reserve."

Ralph Thomas: 360-943-9882 or rthomas@seattletimes.com

Copyright © 2003 Seattle Times Company, All Rights Reserved.

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