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Originally published Tuesday, April 10, 2012 at 11:56 PM

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Gov. Gregoire will call special session

Gov. Chris Gregoire will call for another special session as the Washington state Legislature is set to reach a midnight deadline for the current 30-day special session.

Associated Press

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OLYMPIA, Wash. —

Gov. Chris Gregoire will call for another special session as the Washington state Legislature is set to reach a midnight deadline for the current 30-day special session.

Cory Curtis, a spokesman for Gregoire, says Gregoire will have lawmakers start the new special session right at midnight to continue their work into the morning.

Her announcement was set to come minutes before the deadline, midnight Tuesday, to officially close out the special session. Lawmakers had been passing bills tied to the budget right up until the deadline, but weren't able to move everything before time ran out.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

Lawmakers reached a tentative budget deal Tuesday, but it wasn't clear if they would get everything done before the special session clock runs out at midnight.

"We have broad agreement on a deal," said Cory Curtis, a spokesman for Gov. Chris Gregoire. Curtis couldn't discuss the specifics about the remaining issues, but said "the hope is they can still be done by midnight."

The House and Senate were moving several bills late Tuesday night in advance of a potential vote on the supplemental budget. Gregoire, who had been meeting with lawmakers throughout the day, appeared in the Senate and House wings to meet with Democratic leaders.

"We're making progress," she said. "But we've still got some things to work out."

Earlier in the day, Sen. Joe Zarelli, Senate Republicans' lead on budget issues, sounded an equally optimistic note after an afternoon meeting with the governor and key Democrats, saying "we're all on the same sheet of music, but some of the notes need to be clarified."

"Time isn't our friend right now," Zarelli said. "We'll work the clock. If we have everything worked out and we're in agreement and the clock expires, there's always another day."

The flurry of activity Tuesday started the previous day and was the culmination of months of negotiations over how to close a roughly half-billion dollar shortfall for the two-year budget cycle ending June 2013.

On Tuesday, lawmakers reached agreement on a bill addressing early retirement benefits for future state employees. That measure had been a key sticking point between Democrats and Republicans.

A Republican-led coalition in the Senate had insisted on several reform-related bills, including the pension one, before taking up the budget.

Senators approved the measure Tuesday by a margin of 27-22, clearing a major hurdle in the quest by lawmakers to complete their work. The state House passed the plan shortly before 11 p.m. on Tuesday night, finalizing a deal that had eluded lawmakers for months and delayed final action on the state budget.

State workers who retire before the age of 62 already have scaled back pension benefits. Under the new bill, pension benefits for workers retiring at the age of 55 would be reduced by as much as 50 percent. The changes only apply to workers hired starting in May 2013. The plan would save the state an estimated $1.3 billion over 25 years.

The Senate also passed other budget-related bills off the floor Tuesday night. On a 42-5 vote, the Senate approved an accounting maneuver in which the state would temporarily claim control of local sales taxes before they are sent back to jurisdictions at their usual time, roughly a month after they are collected. That plan is estimated to increase the state's general fund balance sheet by some $238 million. That measure passed the House last week and now goes to the governor for her signature.

Also Tuesday, the House passed a measure that would require the state's two-year budget to be in line with anticipated revenue over a four-year period or 4.5 percent growth per year, whichever is greater. The measure, another bill that was part of the budget negotiations, was passed on a 79-19 vote and now heads to the Senate for concurrence.

Senate Majority Leader Lisa Brown, D-Spokane, said that if lawmakers weren't able to get all of the bills moved by midnight, they still planned to work until everything was done. If the governor needs to call another special session at midnight, Brown said the plan is for lawmakers to work through the night to finish everything within hours.

"I don't think anyone wants to come back tomorrow," she said.

Democrats hold power in the House and had been unwilling to embrace GOP bills that passed the Senate on Saturday, including one to alter health insurance benefits for K-12 employees.

Sen. Rodney Tom, a Medina Democrat who voted with Republicans on a budget proposal last month, had been out of town this week in California and not expected to return until Wednesday, after the special session ended. However, he was seen in the Senate wings Tuesday, having returned a day earlier than expected.

Tom said he was concerned about how the proposed changes to the pension system were coming together in negotiations. And he also worried that Senate Democrats might push through a budget in his absence.

Tom has been siding with Republicans in the latest talks, helping provide the GOP coalition with a 25-24 majority in the Senate.

Earlier in the day, key lawmakers announced that they reached a deal on the capital budget, but were still working toward finalizing details on it.

House Capital Budget Committee Chairman Hans Dunshee, a Snohomish Democrat, said the agreed-upon $1.1 billion supplemental capital budget includes hundreds of millions of dollars in new spending.

However, the capital budget, which is for building and construction projects, would not be passed until after the operating budget.

Sen. Linda Evans Parlette, R-Wenatchee, said both parties agreed to spend more on projects now, while the economy is struggling and costs are low. She said she expects next year's capital budget to be more modest.

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Associated Press writers Mike Baker and Jonathan Kaminsky contributed to this report.

Follow Rachel La Corte at http://www.twitter.com/RachelAPOly.

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