Deal reached on $23 billion state budget

OLYMPIA — Legislative budget negotiators reached agreement yesterday on a no-new-taxes, $23 billion two-year state budget, signaling an end to a months-long standoff between Republicans and Democrats over how to plug the state's worst budget shortfall in decades.

"This is a go-home budget," said Senate Ways and Means Chairman Dino Rossi, R-Sammamish.

Rossi and House Appropriations Chairwoman Helen Sommers, D-Seattle, refused to reveal many specifics of their agreement. They said they wanted to brief members of their caucuses before making the details public.

The full Legislature is expected to convene later this week to take up the proposed budget.

During this year's regular 105-day session, lawmakers failed to find a fix for the state's projected $2.65 billion shortfall in the two-year budget cycle that begins July 1. Gov. Gary Locke called lawmakers back into a 30-day special session May 12, but most of them stayed home while budget leaders tried to work out a deal.

That deal was reached yesterday after both sides finally settled their dispute over pay raises for the state's newly unionized home-health-care workers. House and Senate budget leaders have agreed to reject the state's first-ever contract with home-care workers.

The contract was negotiated by the Service Employees International Union (SEIU), which last year successfully organized the state's 26,000 home-care workers.

Rossi said the workers would still get raises under the new budget, though nowhere near the two-step, $2.07-an-hour raises called for in their proposed contract.

The workers also would not get the health-care and workers' compensation benefits they had bargained for.

"I wish we were higher; we should be higher," said Sommers. "But we had to work out a compromise."

SEIU spokesman Adam Glickman said the last budget figures that the union had seen indicated the pay raises would be about 75 cents an hour. Workers now make $7.68 an hour.

"We challenge any politician who votes for this package to live for the next 12 months on the wages and benefits of home-care workers," said Glickman.

The budget will include the same raise for about 8,000 additional home-care workers not covered by the SEIU contract.

One of the other final pieces falling into place yesterday was an agreement over how much state money to set aside for reimbursing hospitals that care for poor, uninsured people. Based on details previously made public, each side was forced to give ground.

"It's taken us a long time," said Sommers. "We started with over $1 billion of differences."

House leaders initially proposed a budget that called for more than $320 million in new taxes, including an increase in the state sales tax. House Democrats also sought pay raises for all teachers and state employees.

But all of that went by the wayside early in negotiations with Rossi and Senate Republicans, though Republicans were forced to give up on more than $110 million in corporate tax breaks they had pushed.

Rossi said keeping taxes off the table was his main goal going into the talks.

Senate Republicans also had to restore $50 million they had proposed cutting from the Medicaid program. The cut would have eliminated coverage for nearly 40,000 low-income children.

They also agreed to back away from their proposal to cut state-funded prenatal care for immigrant women.

The two sides kept in place a plan to start charging premiums for some families on Medicaid and to reduce the number of slots in the Basic Health Plan, which provides subsidized health insurance to the working poor. Both provisions are sure to draw much fire from human-service advocates this week.

The state teachers union will not be happy, either. As expected, the deal does not include the voter-approved cost-of-living raises teachers were to receive each of the next two years. Instead, House leaders agreed to go along with Rossi's plan to give raises only to newer teachers — those in their first seven years of teaching.

Rossi and Sommers said leaders will likely call the full Legislature back Wednesday or Thursday to begin debating the budget. They said lawmakers could have things wrapped up by the weekend.

The special session adjournment deadline is next Tuesday.

Ralph Thomas: 360-943-9882 or