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Originally published June 11, 2013 at 7:45 PM | Page modified June 11, 2013 at 9:08 PM

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In case budget doesn’t pass, state readies for shutdown

With the Legislature headed into a second special session and no budget yet approved, the governor is making plans for a possible government shutdown should the current state budget expire without a new one.

Seattle Times Olympia bureau

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OLYMPIA – Gov. Jay Inslee is making plans for a possible government shutdown in case the current state budget expires June 30 without a new one to take its place.

The news came Tuesday as Inslee announced that a second special session will start Wednesday because the Legislature was unable to reach agreement on a new operating budget, or anything else for that matter, before the end of the current session.

Lawmakers have been at a partisan impasse over the budget and most other matters of significance almost since they first started meeting back in January. There’s little indication things are improving.

On Tuesday, the last day of the 30-day special session devolved into dueling news conferences where both parties blamed each other for intransigence. Republicans, with the help of two Democrats, control the Senate while Democrats control the House and the Governor’s Office.

Inslee said his Cabinet will meet Wednesday afternoon to discuss their options if the Legislature fails to pass a budget before the end of the month, when the current fiscal year ends.

“Late as it is ... as we come closer to this deadline, I believe there is good reason to believe we will be able to reach an agreement,” he said.

Even so, Inslee and his staff say they need to prepare.

“Look, this is an organization with 55,000 employees. They all would have to be advised of their employment status. There are rules we have to follow to do that,” the governor said. “Our lawyers are trying to untangle ... which services are constitutionally mandated or mandated by federal law, and which ones are not.”

In any case, “this would be a major, major disruption of government services,” he said.

It is not clear which services would remain functioning. The Governor’s Office said there’s never been a government shutdown in Washington, although the state has come close. Former Democratic Gov. Booth Gardner signed a budget at 11:58 p.m. on June 30, 1991.

“We’re not going to open the doors to the prisons,” said David Schumacher, the governor’s budget director.

Essential government services would remain in operation but possibly at reduced levels, Schumacher said. “The question won’t be whether the (Department of Social and Health Services) will be open or closed, the question will be which parts ... can be maintained and which cannot,” he said.

Schumacher noted the state would not run out of money, just the authority to spend it. The Governor’s Office is exploring what authority the state would have to keep things running without a budget.

Senate Majority Leader Rodney Tom, D-Medina, dismissed the idea of a shutdown.

“This talk of the government shutdown I think is nonsense,” he said. “It’s not going to happen. We will work diligently over the next couple of days, and however long it takes, to get the job done.”

Tom implied that his Republican-controlled majority in the Senate is not that far from Democrats in budget negotiations. “I think there’s a lot of movement being made. A lot of that movement is behind closed doors, but I think we’re a lot closer than people realize,” he said.

Democrats, however, said the two sides remain at odds. “There has not been significant process made,” said House Majority Leader Pat Sullivan, D-Covington.

Republicans gained control of the Senate on the first day of the regular session in January when Tom and Sen. Tim Sheldon, D-Potlatch, crossed party lines to caucus with the GOP. Republicans appointed Tom majority leader.

The current impasse largely revolves around tax revenue. Democrats want the Legislature to pass a law to get around a state Supreme Court ruling that could cost the state millions of dollars in estate-tax refunds. They also want to close a couple of tax breaks, including one for residential phone service, to raise money.

Senate Republicans have said they would agree to do so only if Democrats pass three controversial bills favored by their caucus, including a measure that would give workers at least 40 years old the option of settling workers’ compensation claims through structured settlements. They say that would save businesses millions in future workers’ compensation costs.

House Democrats oppose the Senate bills.

Senate Deputy Republican leader Don Benton, R-Vancouver, said the Legislature could have been done weeks ago if Democrats would only agree with what his caucus has proposed.

“What’s holding us up is this unbelievable penchant (by Democrats) for additional tax increases,” Benton said. “More revenue, more revenue, more revenue.”

Inslee laid the blame with Senate Republicans for the stalled negotiations — and a potential government shutdown.

“There is no excuse to allow ideological leverage to drive this state into a government loss of services, and it won’t stand,” he said. “We can do better.”

Andrew Garber: 360-236-8268 or agarber@seattletimes.com. Seattle Times reporter Brian M. Rosenthal contributed to this story.

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