Gregoire calls special session for Monday

OLYMPIA — State lawmakers rushed to pass a backlog of bills on the last day of the regular legislative session Thursday but left the hard stuff — closing a $2.8 billion budget shortfall — for later.

Shortly after lawmakers applauded themselves upon adjourning the 60-day regular session, Gov. Chris Gregoire called them into special session starting Monday.

"We are at a turning point in our history and we need to get it right," Gregoire said at a late-night news conference

Gregoire urged lawmakers to finish up within seven days and keep their focus only on the budget and a jobs bill, although under the state constitution the new session can last up to 30 days and isn't limited to any particular subject.

Standing with Gregoire, House Speaker Frank Chopp, D-Seattle, and Senate Majority Leader Lisa Brown, D-Spokane, said they believe they're close to agreement on taxes and cuts needed to balance the budget.

"We are making real progress," Chopp said.

As the clock ticked down on the regular session, lawmakers approved a package of education bills promising better funding for public schools and pledging access to quality preschool as a new state entitlement.

The Legislature also approved legislation sought by Gregoire that would allow the state to intervene in failing schools and set up new evaluations for teachers. That was aimed at helping Washington compete for a share of $4.35 billion in federal grants known as Race to the Top.

Democratic leaders said they hope to reach a deal on the budget and taxes within a few days.

"There's no great fight going on here," said Sen. Ed Murray, D-Seattle, the Senate's lead negotiator on taxes. "It's just a matter of getting more time to get through it, and we'll get through it."

The House and Senate have approved different bills that would close the budget shortfall with a combination of cuts, taxes and use of one-time fixes such as federal aid and reserves.

Murray said there's still a fundamental disagreement with the House over whether to include a general sales-tax increase.

The Senate has proposed $890 million in new taxes, including a tax on bottled water, a three-tenths of a cent increase in the state-sales tax, a boost to tobacco taxes, and an end to certain tax exemptions.

The House has proposed $680 million in new taxes, but its package does not include a sales-tax increase.

That's been a big sticking point for weeks between the two chambers. House Democratic leaders say they don't have the votes to pass a sales tax.

Murray said he has the opposite situation in the Senate. "If we don't have the sales-tax piece in there at some level, we don't have the votes for revenue," he said.

Republicans criticized Democrats for wasting taxpayer money on a special session, which costs about $20,000 a day — even as they negotiate a budget that will raise taxes.

Sen. Mike Carrell, R-Lakewood, was one of several Republicans who sponsored a bill to cut off lawmakers' "per diem" allowance of $90 a day for expenses while they're in a special session.

Although that bill was introduced too late to pass in the session, Carrell said he's told the Senate he won't accept the per-diem payments during the special session.

"There's no reason to keep us around here if the majority party can't get its act together. We're burning enough money down here as it is," Carrell said.

In addition to the budget talks, Gregoire and legislative leaders said they wanted to see a major jobs package as part of the discussion.

One proposal pushed by House lawmakers would use $500 million or more in state bonds to pay for energy-efficiency upgrades to public schools — with the idea of kick-starting construction jobs while saving money for schools on utility bills in the long run.

But that plan, which was questioned by the state treasurer, bogged down in the Senate.

Gregoire praised legislators for their work on education, including the Race to the Top.

The measure makes low-performing schools more accountable and creates a new teacher- and principal-evaluation system, necessary for the state to be competitive to win one of the Race to the Top grants.

The state's application for the Race to the Top program is due in June.

Many say the bill won't put Washington in a strong position to win one of the grants, which could be as much as $250 million for a state of Washington's size.

Seattle Times staff reporter Linda Shaw and The Associated Press and contributed to this report. Jim Brunner: 360-236-8267 or jbrunner@seattletimes.com.

Andrew Garber: 360-236-8268 or agarber@seattletimes.com.