Olympia outlook: It’s raining cash

OLYMPIA – Even in a place famous for its clouds and rain, last January was unusually bleak in Olympia.

State lawmakers faced a $1.8 billion budget shortfall. They knew they would wrangle for months over a big hike in transportation taxes. And uncertainty loomed over Gov. Christine Gregoire’s 129-vote victory over Republican Dino Rossi. When Gregoire gave her inaugural speech, many GOP lawmakers sat stone-faced, refusing to acknowledge her.

A year later, it’s still rainy, but the mood is very different.

To many lawmakers’ surprise, voters backed the gas tax increase. And though Republican legislators are still often unhappy with Gregoire, they acknowledge that she’s the governor.

On the money front, the state now has a very different problem: too much cash. After years of struggling to patch together budgets, economic growth has left lawmakers with a $1.4 billion surplus. Gregoire and top lawmakers are calling for restraint. They say most of the money should go into a rainy-day fund to pay the bills next year. Instead of cuts, leaders’ biggest challenge this year will be keeping both foes and friends away from that surplus money.

“It’s an election year and there’s a billion dollars on the table,” said Rep. Toby Nixon, R-Kirkland. “But if we start passing it out, where does it stop?”

This is the second year in a row of Democrats’ political trifecta: They control the House, the Senate and the governor’s office. They used their power last year to put money into schools, educators’ salaries, health care and higher education. They passed environmentalist-backed bills setting “green building” standards for new public buildings, as well as a controversial law requiring tough new auto emissions standards here.

This year, the agenda will be less ambitious. It’s only a short 60-day session, unlike last year’s 105 days.

“It’s really a session to tweak and continue on the same path,” said Senate Majority Leader Lisa Brown, D-Spokane.

Republicans – outnumbered 55-43 in the House and 26-23 in the Senate – say they’ll try to win some victories by building “philosophical majorities” with conservative Democrats. Among the GOP’s priorities: reducing regulations for business, property owners and health insurers; repealing the state’s estate tax; and strengthening the state spending limit.

“The system is inherently built to grow,” Senate Minority Leader Mike Hewitt, R-Walla Walla, said of the spending cap. “Something has to be there to keep us in check.”

Here are some of the major topics this session:

Sex offenders: Spurred largely by last year’s attack on the Groene family, allegedly by convicted sex offender Joseph Duncan, lawmakers in both parties want to toughen sex offender laws. Among the proposals: longer sentences, harsher penalties for sex offenders who fail to register with authorities, renewing “community protection zone” laws for schools and day cares, and electronic monitoring of some released sex offenders, perhaps for life.

“We know that Level 3 sex offenders reoffend,” said House Minority Leader Richard DeBolt, R-Chehalis.

The tough-to-mention truth, however, particularly in an election year, is that these things all cost money. (A prison bed costs about $27,000 a year, according to Hewitt.) Also, some prosecutors and victims’ groups say, the harsher the penalties, the harder it will be to get people to testify against abusive family or friends. Changes in the law, Brown said, should be done “with an eye not on what is politically popular and works on the talk-radio circuit, but with what works.”

Energy: Eager to score points with both environmentalists and farmers, lawmakers in both parties are pushing changes to encourage homegrown fuels like biodiesel and ethanol. Democrats also want to require all diesel fuel in the state to include 2 percent biodiesel – a fuel made from vegetable oil. The percentage would rise to 20 percent by 2020.

“We want to move (alternative fuels) from the fringe to the mainstream,” said Sen. Erik Poulsen, D-West Seattle.

Gregoire and many lawmakers are also calling for more money to help low-income people pay their heating bills this winter.

“People need help right away,” said Sen. Bob Morton, R-Orient. “Like now.”

Budget: Gregoire’s proposed $500 million in new spending includes a $31 million raise for teachers and some school staff, more child abuse caseworkers, more state troopers, and $42 million to start cleaning up Puget Sound. She’s also supporting a new $63 million life sciences building at Washington State University, paid for with interest off its timber and land-lease profits.

In theory, most lawmakers seem to agree with Gregoire’s call for fiscal restraint. But one-on-one, everyone seems to have at least one modest proposal. And there are 147 lawmakers.

“We’re all going to ask for something,” said Sen. Darlene Fairley, D-Seattle.

Environment: Environmental groups and lawmakers want to build on last year’s successes in Olympia with several proposals: cleanup dollars for Puget Sound and perhaps the Spokane River; a free drop-off system for old computers, TVs and other electronic waste, paid for by manufacturers; a ban on some toxic flame retardants; and more alternative fuel production.

Gay rights: For more than a decade, liberal lawmakers have been trying to ban discrimination on the basis of sexual orientation in housing, employment and financial matters. (Such a law already exists for race, religion, sex and other categories.) This has repeatedly passed the House overwhelmingly, but last year died – by a single vote – in the Senate. Brown plans to try again.

Not directly related, but overshadowing this debate, is a pending court ruling on the state’s ban on same-sex marriage. The state Supreme Court decision could come at any time.

WASL: With the high school class of 2008 required to pass the Washington Assessment of Student Learning to graduate, state lawmakers are getting nervous. Gregoire has proposed spending $38 million to help struggling students, and lawmakers are considering alternative testing for some students. Legislative leaders and Gregoire, however, say they don’t want to solve the problem by watering down the test.

Taxes and fees: Republicans want to do away with the state’s estate tax, which they say breaks up family-owned businesses. But Democrats aren’t likely to go along, since losing the tax means losing $100 million a year.

Both sides, however, are discussing doing away with the unpopular “day use fees” that state parks now charge.