Senate Democratic and Republican leaders announced a deal Wednesday to partially close a roughly $550 million budget shortfall in the current fiscal year, which runs through June.

The proposal addresses $394 million of that shortfall through a combination of cuts, and fund transfers from accounts outside the general fund. The state House passed its own budget proposal last month -- with no Republican votes -- and now the two chambers must hash out a compromise.

It's not clear how quickly that will happen. There are significant differences in the two plans.

The House, for example, would eliminate the state Basic Health Plan -- which offers subsidized insurance to thousands of the working poor -- after a few months, but retain Disability Lifeline, which provides cash and health care for unemployable disabled people.

But the Senate proposal would eliminate the cash grant for Disability Lifeline and retain the Basic Health Plan. The Senate would shrink Basic Health through attrition and by requiring people to periodically prove their eligibility, including showing a valid Social Security number.

"This is another installment in solving the huge budget crisis," Senate Ways and Means Chairman Ed Murray, D-Seattle, said.

Murray said he's hoping a majority of both caucuses will vote for the measure, but it's still early. "They have to work their membership as we are working our membership and the wheels could come off ... and then go back on."

Sen. Joe Zarelli, R-Ridgefield, the ranking Republican on Senate Ways and Means, said he agreed with the proposal, even though he felt it didn't go far enough.

"We agreed last night to move forward with a budget that clearly doesn't solve the problem," he said, but later added, "it's positive movement in the right direction."

You can see the Democratic press release on the jump.

Senate offers budget plan to "do less with less"

OLYMPIA - The Senate today put forward a bipartisan budget plan that Sen. Ed Murray, D-Seattle, says represents "the next installment in our ongoing effort to reckon with the new economic reality."

Declining revenues and the voters' roll-back in November of legislatively-approved tax increases created a $1.1 billion gap in the current biennial budget between incoming revenues and out-going expenses. The 2009-11 budget must be in balance by the end of the current fiscal year, which ends on June 30. To help deal with the problem, Gov. Gregoire authorized across-the-board agency cuts to take effect in October, and the Legislature met for a special session in December - the combined effect of which addressed $588 million of the overall problem.

After these efforts, an approximately $550 million gap remains to be closed.
Murray, chair of the Senate's budget-writing Ways & Means Committee, said, "Washington cannot afford to keep spending at our current rate. Our conversation with the public is no longer about all the good ways we can spend their money. It's about what we're going to cut. It's about doing less with less. We need to be honest about this."

The Senate's plan closes the gap in the current fiscal year by $394 million, of which $140 million is achieved through fund transfers and other agency reversions. This is largest amount of savings proposed to deal with the current shortfall to date. The House plan released in January reduces the gap by $364 million.

Notable ways the Senate plan differs from the House plan include:

-- Reducing but not eliminating class-size reduction efforts in K-4 classrooms
-- Eliminating the Higher Education Coordinating Board and Council of Presidents
-- Transferring tuition funds for financial aid purposes
-- Preserving state funded research
-- Preserving the Basic Health Plan by tightening eligibility
-- Tightening eligibility for the Children's Health Program
-- Eliminating cash grants for the Disability Lifeline
-- Not cutting adult day health care
-- Taking a three percent pay reduction for non-represented state workers 3 months early
-- Reducing management at the Department of Social & Health Services
-- Preserving the Becca truancy program

While painful choices contained in Senate's plan are unavoidable, they do present the Legislature with an opportunity, according to Murray. "Lawmakers can keep kicking the can down the road, keep robbing Peter to pay Paul, and keep ignoring the altered economic landscape at the expense of our priorities, our values and our children's economic future," Murray said. "Or we can choose to make the hard choices now, take the painful cuts now, enact the necessary reforms now and set our state on a new path toward sustainability and growth."

Murray said the Senate's plan is not a full solution that achieves these goals today, but it does move the process one more step forward. "We put this proposal together collaboratively by working across the aisle, and we now look forward to working collaboratively with our colleagues across the rotunda," Murray said.

There remains one more revenue forecast between now and the end of the biennium.
The Senate plan, an amendment to ESHB 1086, will receive a public hearing today in the Senate Ways & Means Committee at 3:30 pm, in Senate Hearing Room 4 of the John A. Cherberg Building.