Reports could bust gridlock in Legislature

MCCLATCHY NEWSPAPERSJune 17, 2013 

Neither House Democrats nor Senate Republicans are expecting a windfall from two key reports due out Tuesday, but the news could be positive enough to help resolve the differences that are holding up a budget deal.

Budget negotiators didn’t report any breakthroughs over the weekend, but Senate budget chairman Andy Hill was upbeat Monday about the possibility that Tuesday’s reports will bring an overdue end to the legislative session. The pair of reports will give budget writers a more accurate look at costs and revenues.

“I think the revenue forecast will be the final logjam breaker,” said Hill, a Redmond Republican.

The Economic and Revenue Forecast Council’s monthly report last week showed tax receipts exceeding the March revenue forecast by more than $126 million – or about $94 million when adjustments are made to account for one-time factors and blips.

Lawmakers aren’t expecting monthly gains of $30 million to $40 million to continue for the next two years, but they are optimistic.

House Appropriations chair Ross Hunter, D-Medina, hasn’t offered a public prediction but has told his own people that the net financial gain from the caseloads and revenue reports may be a third of what he’s been hearing from some optimists – in other words, $100 million or less.

Senate Majority Coalition Leader Rodney Tom, D-Medina, said last week the reports could help resolve differences between the Republican Senate, which is locked into an anti-tax stance if it can’t get business-friendly reforms, and the Democratic House, which wants to close tax exemptions and save social programs helping the poor.

The Senate is holding out for changes in state workers’ compensation insurance or other areas before agreeing to scale back a tax exemption for out-of-state shoppers or restore a tax on phone and other communications companies.

Top legislative leaders are discussing those controversies separate from the budget talks. Hill said the negotiators are down to the “nitty-gritty” of going through their spending plans line by line.

One boost to revenue was the real estate excise tax, which drove about $34 million of the gains since March. .

Big real estate deals totaling more than $500 million helped drive some revenue growth in the last month, but so did a strengthening residential sales market, according to the forecast council’s tax collections report, which noted the March revenue forecast had expected lower commercial sales due to federal tax changes at the end of 2012.

Sales of trucks and cars and retail sales receipts also have been trending well on a year-over-year basis.

At the same time, the news on the jobs front is shaping up as mixed – with job growth in April falling well short of the March forecast while the overall jobless rate fell from 7.5 percent in February to 7 percent in April. Aerospace and manufacturing jobs declined, but construction in early spring was higher than expected.

Reach Brad Shannon at 360-753-1688 or bshannon@theolympian.com; reach Jordan Schrader at 360-786-1826 or jordan.schrader@thenewstribune.com.

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