- Associated Press - Thursday, May 28, 2015

OLYMPIA, Wash. (AP) - Gov. Jay Inslee has ordered a second special legislative session to convene Friday and told lawmakers working on the state’s more than $38 billion two-year operating budget he wants them to move their negotiations to his office, starting Monday morning.

Lawmakers ended their first special session on Thursday, with a transportation budget, but still must agree on a state operating budget and a plan for answering the Washington Supreme Court on education spending.

The governor said his goal is to help Democrats and Republicans to come together on a budget agreement and said he would be in the room some of the time.

Inslee said the people of Washington are frustrated with the Legislature and he doesn’t want lawmakers to think they have a full 30 days to reach a budget deal.

At a news conference after the first special session ended, the governor said didn’t want to talk about a government shutdown, which could happen if the state does not have a budget by June 30.

“I don’t want to think about the consequences of failure,” Inslee said.

Senate Republicans and the House Democrats agree on what is keeping them from reaching a state budget agreement for the next two years: taxes.

Senate leaders say the state can pay for everything it needs with existing revenue sources, especially since a recent state revenue forecast estimated the state will have an extra $400 million to spend. They say no new taxes are needed.

House leaders - and the governor - say the improvement in the state economy is a big help, but there’s still not enough money to fully pay the state’s responsibilities for education, the safety net, mental and physical health needs and pay raises for state employees, including teachers. They are still pushing for a capital gains tax.

Senate Republicans on Thursday released a new state budget proposal, making some movement toward proposals by House Democrats. House leaders said they would release their next budget proposal on Monday and hold a public hearing on Tuesday.

Senate budget writer Andy Hill said the proposal released Thursday is the offer made to House negotiators last week. He says Senate negotiators made a lot of concessions and are still waiting for more movement from the House.

“We’re frustrated,” Hill said. “Our last offer was on Friday. We received a counter-offer yesterday. The offer did not move toward us.”

House Majority Leader Pat Sullivan says they also have made significant concessions.

“We’re actually trying to work on a solution that gets us home,” he said.

Lawmakers adjourned their regular, 105-day session last month and then returned for a special session.

The Senate budget would spend about half of the additional state revenue identified in the most recent state revenue forecast but Hill said the rest of that new revenue is open to negotiations.

Last week, the state Economic and Revenue Forecast Council found that the state’s revenue collections through the middle of 2017 are expected to increase by more than $400 million - with nearly $327 million for the upcoming 2015-17 budget.

Hill said that extra money was enough to do everything the state needs to do without raising any new taxes.

“We’ve said all along that we can fully fund education, protect the most vulnerable and do it without raising taxes,” Hill said.

Hill said the divided government - nearly half Democrats and half Republicans in both houses - makes negotiations on issues like the state budget take longer, but he believes the end result is better.

Changes from the previous Senate proposal include:

-More money to pay for state employee salaries negotiated in collective bargaining agreements. But the $66 million increase is tied to a demand for collective bargaining reforms.

-A decrease in college tuition rates in the first year of the biennium instead of a two-year phase-in.

-An increase of $12 million in marijuana tax money going back to local municipalities in the next two years.

-About $33 million to maintain state employees’ access to health insurance for their spouses.

House Speaker Frank Chopp said he’s pleased with the progress that has been made on budget negotiations, but there’s still a ways to go.

“We are working toward a common sense middle ground,” he said.

Some sticking points between the House and Senate budgets, according to Chopp:

-The House puts $115 million more into early learning.

-The Senate doesn’t put enough money in state need grants for low-income college students.

-The House spends $50 million more on mental health.

-The Senate plan to lower college tuition could hurt the state’s prepaid tuition college savings program, the Guaranteed Education Tuition program.

-The House budget would spend $150 million more on raises for teachers and other K-12 school employees than the Senate budget, making teacher raises equal to those negotiated for other state employees.

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