OLYMPIA – Some $4 billion in construction projects remain in limbo after the Legislature entered a new fiscal year Saturday morning without passing a capital construction budget or settling a major water rights issue.

Tempers flared about 2:30 a.m. Saturday, after a day that saw lawmakers pass a $43.7 billion operating budget, taxes to pay for it and a laundry list of other significant bills that have been pending for much of the year. 

Despite the fact it had taken them 174 days to get there, the work they did that started some 18 hours earlier could have gone down as some of the most productive in anyone’s memory.

But they couldn’t reach an agreement on a possible fix for what’s known as the Hirst decision, a Washington Supreme Court ruling that pits developers against Native American tribes and environmentalists over water.

Senate Minority Leader Sharon Nelson, D-Maury Island, accused Republicans of stalling negotiations in an effort to prolong the session and keep lawmakers from raising campaign funds for a tight special election for a Senate seat that could shift the majority of the chamber. “This is a major disservice to the citizens of our state,” she said.

Sen. Mike Baumgartner, R-Spokane, countered that Senate Republicans had been clear from the start of the session the Hirst decision needed to be addressed. “We will have a capital budget when we have a Hirst fix.”

Since the beginning of the year, Senate Republicans had linked the 2017-19 capital budget, which includes money for new schools, state buildings and water projects, to a change in state water laws that addresses Hirst. The Senate passed such a bill four times; the House had several versions but couldn’t muster a majority to pass one. One was reportedly in the offing late Friday when talks broke down.

It was as if the Senate Republicans, having taken the capital budget hostage, were willing to shoot their hostage rather than negotiate the ransom. Was it worth it, they were asked later.

Senate Majority Leader Mark Schoesler, R-Ritzville, said the Hirst decision is stalling development in across the state. The capital budget has a significant number of water projects and Senate Republicans believe Hirst and that budget are linked. 

The Legislature passed a stop-gap capital budget totaling some $330 million to keep existing projects going and avoid layoffs of employees paid by that category of spending. In what could be seen as extending a single middle finger from across the Rotunda, the House also passed a version of the full two-year $4 billion capital budget on a 92-1 vote and sent it to the Senate before adjourning about 3:30 a.m.

Senate Republicans returned to the floor at 3:50 a.m. and blocked a vote on that full budget by forcing an adjournment until Monday.

But that is scheduled as a quick “pro forma” session which hardly any will attend, and Tuesday is July Fourth. So, the earliest anything could happen is Wednesday, which would be the halfway mark of the Legislature’s third 30-day special session. They could continue seeking a solution in the remaining 15 days, or vote to end the current special session and ask Inslee to call them back later if they can reach a deal. In the early hours of Saturday morning, it wasn’t clear which option had a better chance of success.

They could also put off approving any new capital projects until returning to Olympia next January for the 2018 session. 

Last October, a divided court said counties must comply with the Growth Management Act and make an independent decision about whether enough water was available before approving a building permit for a project that needed a new well for water. Before the Hirst decision, many counties relied on state Department of Ecology assessments of whether water was available, so well permits were easier to obtain.

Although the ruling involved a Whatcom County case, it has statewide implications. A month after the decision, Spokane County adopted a temporary ordinance, which it later extended, with limited restrictions that allow for some development.

During hearings on bills proposing different fixes, frustrated landowners told lawmakers they can't build on property they bought to build their family dream homes. Groups that represent builders, contractors and farmers said the ruling has shut down needed development around the state.

But tribal members and environmentalists argued they've been warning about declining water resources for years and any rewrite needs to pay more attention to the cumulative effects of residential wells.

Sen. John McCoy, a member of the Tulalip Tribe, said Senate Republicans don’t seem to realize the Native Americans aren’t going to give up their treaty rights and have to bring them into negotiations. 

“The tribes are willing to negotiate a reasonable deal,” McCoy said. “The tribes aren’t interested in people going without water.”

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