OLYMPIA — Wednesday’s press release announcing a hard-won deal on balancing this year’s budget carried the seal of the Washington State Senate and the names of the Senate’s two budget leaders: Seattle Democrat Ed Murray, chairman of the Senate Ways and Means Committee, and Joe Zarelli of Ridgefield, the committee’s leading Republican.
Murray’s quote spoke of the “painful” cuts in the social safety net necessary this year. “They aren’t necessarily the decisions we’d embrace if we had a wider set of options before us,” he said.
Zarelli’s take: The budget compromise represents progress “toward reforming three large, visible state-only entitlements that provide health care and cash grants for the poor.” That’s important, he said, “because reform needs to have a prominent role in the development of the next biennial budget.”
Two perspectives from two political leaders at the two ends of the political spectrum.
One budget deal.
Gov. Chris Gregoire signed the budget bill Friday.
It’s a far cry from the approach Democratic leaders have taken in past years, when they’ve conducted budget deliberations behind closed doors, often keeping budget documents under wraps until they released them to the press.
Washington’s state budget crisis, which is forcing the state to cut $550 million from the current budget and up to $5 billion from the 2011-13 spending plan, has forged a tentative bipartisanship in the Senate this year.
After years of lobbing well-aimed bricks at Democrats over their spending and budget priorities, Zarelli is now an inside player. He and Murray have worked together closely on writing the supplemental budget required to fund state programs through June 30. His views have been sought by Gregoire, as well as Senate Majority Leader Lisa Brown, a Spokane Democrat.
“Sen. Zarelli has always been a thoughtful and strategic member when it comes to the budget,” Gregoire told The Columbian. “I’ve found him to be willing to roll up his sleeves, understand the issues and do the hard work that this unprecedented time presents us with. We don’t agree on everything, but we do agree that status quo is not an option, that we must make bold decisions that will lead us out of this recession.”
“Sen. Zarelli and I have worked on several issues over time,” Brown said. Among them: a bill allowing Vancouver and other local governments to experiment with tax increment financing, and the establishment of a rainy day fund in the state constitution, long a priority for Zarelli.
“I’ve always found him to be someone who’s very straightforward about what his goals are,” she said. “He’s going to listen to opposing points of view. What’s definitely changed this year is that we have taken a bipartisan approach. We’re taking suggestions from both sides. It’s an unprecedentedly difficult budget situation. It seems that it calls for getting everyone’s ideas on the table and soliciting as much participation as possible. We also think that is more reassuring for the public.”
Zarelli says his message hasn’t changed over the years.
“During good times and during the recession, I’ve tried to remain consistent in my message and to be as factual and honest as I can be,” he said. ” I think that has helped. It has taken us to this point. The scenario in politics is that those who are the decision-makers get to decide whether ultimately they want to listen to outsiders or not. Regardless of the status quo today, the scenario and set of choices are such that to be in the majority doesn’t really do a lot for you. It pushes you toward being a listener.”
Republican go-to guy
First elected to the Senate in a November 1995 special election to fill Linda Smith’s seat after she resigned to run for Congress, Zarelli was elected to a full term representing the 18th District the following year. He earned his stripes as Senate Republicans’ go-to guy on all matters budgetary through his work on the Ways and Means Committee, where he has served since 1997. He chaired the budget-writing committee in 2004, after his mentor, former state Sen. Dino Rossi, left the Legislature to launch the first of two unsuccessful campaigns for governor.
During the years of budget surpluses, Zarelli’s consistent warnings that the state was spending too lavishly and should set aside money for a rainy day were largely ignored by the governor and Democratic majorities in both the House and Senate. Between 2006 and 2008, Gregoire proposed, and Democrats approved, large increases in spending for education reform, health care for children, and early childhood learning.
Over the past several years, Zarelli has tried to counter the Democratic message with his “Budget Tidbits,” carefully footnoted reports offering his take on everything from homeowner property tax relief to the real revenue impacts of new taxes on candy, soda and cigarettes.
He works closely with Ryan Moore, staff counsel for the Senate Republican Caucus, who has a law degree and a minor in economics. Moore is the caucus’s expert on budget policy and focuses on bills that come before Senate Ways and Means.
“He’s key,” Zarelli said. “We need to make sure everything is provable.”
Last spring, after Democrats approved new taxes on bottled water, candy, soft drinks and cigarettes to help balance the budget, Zarelli ramped up the rhetoric, denouncing the new taxes.
“This should have been the year to reform government, for the majority party to show foresight and leadership and put state government on a smarter and more stable course,” he said. “Instead, the taxpayers are going to be pinched for hundreds of millions more in the name of ‘Washington values.’ ”
In May, in a debate with state Rep. Jim Jacks, D-Vancouver, before the Rotary Club of Vancouver, Zarelli laid much of the blame for the staggering deficits on Gregoire, noting that state spending grew by one-third between 2004 and 2008, a period that coincided with her first term.
“What we’ve lost in the past couple of years was what we grew by in the previous four years,” he said. He accused Democrats of “kicking the can down the road” instead of making hard choices about what the state can and cannot afford.
Voters overturned the taxes in November. They also rejected a proposed income tax on high earners and reinstated a measure requiring that all new taxes and tax increases pass both chambers by a two-thirds vote.
The voters’ verdict was not lost on the governor.
Last summer, well before the election, Gregoire appointed a broad-based bipartisan panel to help her fundamentally restructure state government so it could operate with reduced revenue for the long term. Zarelli agreed to serve on the team. That working relationship has continued.
“From Day One of this budget crisis I’ve said that I would welcome ideas from all corners of the state and from people of all political stripes,” the governor said. “Joe served on my Transforming Washington’s Budget group and he brought a keen awareness to the issues we face. Neither party has a corner on good solutions and neither party can solve this crisis alone.”
The governor’s working group, Zarelli said, “was the beginning of really realizing what we were going to have to do, that we were going to have to bring other people into the camp as well.”
Unfortunately, he said, it didn’t produce the kinds of concrete suggestions he had hoped for. “It helped us understand that people are really good at saying what they want but not at how to do things better. We didn’t get that.”
Democrats have been slow to face the hard fact that the state must make permanent cuts in spending, Zarelli says.
“Decision-makers, including the governor, thought there were other things we could do. As of November, those options are gone. New revenue is off the table. All the low-hanging fruit — switching funds, federal dollars — those things are no longer options, and we are left with one thing: How do we match up our declining revenue with our needs?”
‘Reform and reduce’
Over the summer, Senate Republicans decided to solicit their own ideas for long-term reform. In September, they launched Reset Washington, a website featuring video clips of Zarelli suggesting solutions to the state’s thorniest budget issues, including the state’s unfunded pension liability and welfare fraud.
Soon after Reset Washington’s debut, Zarelli invited state workers to submit ideas for cutting the cost of state government. In the first two months, the site got 7,500 responses. More than a dozen employees in the Department of Social and Health Services wrote to report examples of widespread fraud in the state’s welfare, food stamps and subsidized child care programs, including beneficiaries’ use of state-issued Electronic Benefit Transfer cards to get quick cash in gambling venues.
In November, Zarelli called for creation of an independent office to investigate reports of widespread fraud in the state’s welfare, food stamps and subsidized child care programs. He also called for an increase in the department’s fraud investigation staff and reform of the EBT program.
As a result, Sen. James Hargrove, a Democrat, and Sen. Val Stevens, a Republican, have introduced a bill to reform the welfare system without slashing enrollment.
It’s an example, Brown says, of a new mantra that has emerged from this year’s budget-slashing exercise: “Reform and reduce.”
“From a Republican perspective, you are eliminating waste and abuse,” she said. “From a Democratic perspective, you are preserving a program. That can be a win-win.”
The collaboration between Murray and Zarelli is another new wrinkle.
“We have worked together before on transportation and capital budgets,” Zarelli said. “We are very workable. He is from a much more liberal area in Seattle. My area is more conservative. He understands he is going to have to make decisions on programs and funding on things he cares very much about but can’t do anymore. Where we can provide for continued support, I’m open to that.
“It’s my job to serve and to continue to express the viewpoints I have always expressed,” he added. “That drives a collaborative effort to work toward a set of principles.” Inside the room, writing the budget, “there’s respect, there’s give and take.”
Murray told reporters in Olympia this month that some of the cuts in an earlier version of the current budget bothered him, especially eliminating monthly $258 Disability Lifeline cash grants and slashing funding for financial aid to college students.
“I’m not sure I would have cut cash (grants) if it had been a Democratic proposal,” he told reporters in Olympia. “I’m not sure that we would have cut the state need grant if it had been a Democratic proposal. But there was a lot of give and take.”
Bipartisan budget
State Sen. Craig Pridemore, D-Vancouver, also a member of Ways and Means, experienced his own immersion in the state’s budget in 2008, when he oversaw the writing of the budget as the committee’s vice chairman. Both Pridemore and Zarelli also sit on the State Economic and Revenue Forecast Council, which gets regular briefings on the health of the state’s economy.
These days, Pridemore said, he finds himself agreeing with Zarelli more often than with the liberal wing of his own Democratic caucus on the need for deep, permanent cuts in state spending. Bipartisanship is essential, he said, because grappling with continuing shortfalls in the current budget and yawning deficits in 2011-13 isn’t something either party can do alone.
“From my perspective, there are not 25 Democrats or 25 Republicans who can pass the budget,” he said. “We must have a bipartisan budget. Murray can write the budget, Zarelli can write the budget, or we can stay here until one of them does.”
Zarelli says there’s a political reason Gregoire is working more closely with Republicans on the budget this year.
“The dynamics are such that it’s almost impossible, if not extremely difficult, for the Senate’s liberal Democrats to pass a budget here by themselves,” he said. “The governor is politically astute enough to know our involvement is useful.”
That’s only half the story, Pridemore counters. The governor needs support from her own party because “a lot of Republicans are unwilling to vote for a budget that doesn’t cut everything.”
Are Senate Democrats split on the need for deep program cuts to balance the budget? Brown, a liberal Democrat herself, chooses her words carefully.
“The Democratic caucus is a big tent, with diverse perspectives,” she said. “What I would say in terms of the more liberal members is that I’m also from a district that is highly affected by the human services reductions.”
Bumps in the road
The latest compromise on the budget isn’t the only example of the new bipartisan spirit. It was on display during the December special session, when the Legislature cut $600 million from the current budget in one day.
It was also in evidence on Feb. 11, when a hotly contested bill requested by the governor to expand unemployment benefits for the state’s jobless workers finally emerged as a compromise that passed the House 98-0 and the Senate 41-4.
The House is not as far along as the Senate on the road to bipartisanship. On Friday, House Republicans declined to support the budget compromise Zarelli and Murray had announced two days earlier, in part because it did not preserve $25 million in school class-size reduction for kindergarten through fourth-grade students.
“While I appreciate the efforts to craft a bipartisan early-action budget, I cannot compromise my principles, the principles of our caucus, or the trust and faith of the citizens and families we represent solely in the interest of bipartisanship,” said Rep. Gary Alexander, R-Olympia, the ranking Republican on the House Ways and Means Committee. “The blueprint of establishing priorities, protecting education and moving forward with long-term solutions that we began last December in our first ‘bipartisan’ budget agreement have been abandoned.”
Will bipartisanship last beyond the immediate budget crisis? Will it spread to the more partisan House chamber? No one can say for sure. Nonetheless, Gregoire told The Columbian she is pleased.
“There has been a spirit of cooperation and communication between both chambers and both parties that I haven’t seen in my time in public service.”
Kathie Durbin: 360-735-4523; kathie.durbin@columbian.com.
