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Originally published Tuesday, June 18, 2013 at 8:15 PM

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Revenue boost puts Legislature closer to budget deal

State officials predict rapid progress in budget negotiations after two forecasts on Tuesday gave the Legislature an additional $320 million to spend over the next two years.

Seattle Times Olympia Bureau

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OLYMPIA — State officials predict rapid progress in budget negotiations after two forecasts on Tuesday gave the Legislature an additional $320 million to spend over the next two years.

That’s not a ton of money, considering lawmakers are negotiating a two-year budget north of $33 billion. But it may be just enough to get past final barriers to an agreement.

Republicans and Democrats alike said they expect to reach agreement on a budget before the current fiscal year ends on June 30. Failure to do so would lead to a government shutdown starting July 1.

“I’m very confident the budget writers will be done by July 1,” said David Schumacher, the governor’s budget director.

The first bit of good news came from the state-revenue forecast, which projects the state will take in $231 million more than expected, with roughly half of that coming from the current fiscal year and the rest over the next two years.

Steve Lerch, the state economist, cited an improved housing market for the uptick in tax collections.

In addition, the state’s caseload forecast showed fewer people using certain state services including Medicaid. That boosted the bottom line by an additional $90 million.

The small windfall comes at the critical time in budget talks. House Democrats have been pushing to close tax breaks as a way to raise more money for education and social services.

Republicans, who control the state Senate, have said they would only consider closing tax breaks if the Legislature passes certain bills — including changes to the workers' compensation system — that Democrats oppose.

That’s where things have been stuck for weeks, with both sides refusing to give in. The tax breaks Democrats have focused on in recent weeks would raise around $160 million over the next two years.

Republicans note the revenue and caseload forecasts provide even more money than that, so the Legislature should just call it day and pass a budget.

“All along, the House has been insisting on more revenue, and we’ve been saying if there’s going to be more revenue there needs to be more reform,” said Senate Majority Leader Rodney Tom.

With the new money, “We will put our reforms off the table for now and wrap this up,” he said.

Senate Republicans took control of the state Senate in January when Tom, D-Medina, and Sen. Tim Sheldon, D-Potlatch, crossed party lines to caucus with the GOP. Republicans appointed Tom majority leader.

Democrats, who control the House and governor’s office, were not as eager to say the additional money will solve any remaining differences.

In particular, Democrats want to eliminate a tax break for conventional residential-phone service. But House Majority Leader Pat Sullivan, D-Covington, said Democrats would not let the phone-tax break derail a budget deal.

He noted, though, that other differences remain to be ironed out, including funding for social services and education.

Andrew Garber: 360-236-8268 or agarber@seattletimes.com

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