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Originally published February 4, 2011 at 8:57 PM | Page modified February 4, 2011 at 9:03 PM

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Senate deal cut on this year's state budget deficit

Democratic and Republican state senators have approved another round of spending cuts and fund transfers to deal with the current fiscal year's budget deficit.

The Associated Press

OLYMPIA — Democratic and Republican state senators have approved another round of spending cuts and fund transfers to deal with the current fiscal year's budget deficit.

The bill approved Friday would slice about $375 million from an estimated $550 million shortfall in the budget that expires June 30. The state House has passed a different plan for cutting the deficit, setting up negotiations between the two chambers so a final package can be sent to Gov. Chris Gregoire.

Once the current budget is balanced, Gregoire and legislators will have to tackle an estimated $5 billion deficit in the roughly $37 billion budget that runs from mid-2011 to mid-2013.

"The fiscal crisis that we're in is the result of the Great Recession," said Senate Ways and Means Committee Chairman Ed Murray, D-Seattle. "And it is apparent that this fiscal crisis is not subsiding anytime soon."

Friday's 38-9 vote was unusually bipartisan for a budget bill, reflecting the narrower gap between majority Democrats and minority Republicans after November's elections. Voters also rejected new taxes and approved stricter limits on the Legislature's ability to raise revenue, making spending cuts and fund transfers the primary methods for balancing the books.

About $255 million of the savings approved Friday are from spending reductions, with roughly $120 million coming from fund transfers. That gets the immediate deficit below $200 million — a gap that may have to be bridged by pushing some K-12 school payments into the next biennium, as suggested by Gregoire.

One of the chief differences from the House deficit-cutting plan is the distribution of spending cuts in education. The Senate plan would take less from K-12 education and more from higher education, including the diversion of about $25 million that had been collected as tuition.

The Senate plan also would preserve a smaller Basic Health Plan, the subsidized health insurance intended for lower-wage working people. That's achieved by instituting tests for assets and legal immigration status and diverting about $6 million from the Life Sciences Discovery Fund, which is bankrolled with money from the national tobacco settlement.

Cash grants under the Disability Lifeline program would be eliminated.

The bill's GOP co-author, Sen. Joe Zarelli, R-Ridgefield, called the plan "a step in the right direction."

Zarelli pointed to overhauls of the Basic Health Plan, Disability Lifeline and a children's health program as ways to save those services from outright elimination in the future.

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