State House passes budget; talks await on solving deficit

OLYMPIA — The state House approved its version of a state spending plan late Friday night, a prelude to final negotiations over how to bridge a $2.8 billion budget shortfall.

With just six full days left in the 60-day legislative session, the House and Senate will now have to work out differences in their budget blueprints and settle on a tax package to help pay for it all.

The budget was approved on a 55-43 vote after several hours of debate. It now must be merged with the Senate's version.

If lawmakers are unable to finish their work on time, Democratic Gov. Chris Gregoire could be asked to call the Legislature into a special session. The entire House and half the Senate are up for re-election in the fall.

Majority House Democrats' original budget proposal called for about $860 million in higher taxes and about $650 million in spending cuts. Democrats amended the budget to add about $46 million in state spending during Friday's debate, including roughly $22 million in extra spending for state employee health-care coverage.

Some $550 million would be solved with fund transfers and other one-time solutions, while federal bailouts would account for about $640 million.

Cuts would be felt across state government under the House plan, including reductions in K-12 class-size programs, public-university spending and government staffing.

Democrats said their blueprint was a responsible, balanced approach to fixing one of the worst budget problems in memory, coming on the heels of the Great Recession.

"We're looking for our economy to recover and we've gotten little glimmers of good news," said Ways and Means Chairwoman Kelli Linville, D-Bellingham. "We're not there yet. But we are doing the best job that we can to make sure that we maintain the values that we care about."

Republicans countered that Democrats hadn't done enough to find efficiencies and reforms, and were too cavalier about raising taxes during a fragile recovery.

"The one thing we've heard from a number of people back home is please, please, please don't raise taxes," said Rep. Bill Hinkle, R-Cle Elum.

As introduced, the House's separate tax plan would close tax exemptions, broaden the base of the state sales tax, increase taxes for certain service professionals and raise tobacco taxes.

The Senate tax plan, meanwhile, revolves around a temporary three-tenths-of-a-cent increase in the sales tax, paired with a rebate for poorer Washingtonians. It also would raise tobacco taxes and shrink tax exemptions.

Senators could approve their revenue package over the weekend, said Senate Majority Leader Lisa Brown, D-Spokane.