Debt limit rift could stall lawmakers in Olympia

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OLYMPIA — A rift over how to handle Washington state’s debt limit threatened to stall the Legislature’s work Monday, just two days before lawmakers are due to complete their special session.

Gov. Chris Gregoire called an afternoon meeting with House and Senate leaders to figure out whether there was room for an accord, but lawmakers emerged with only the promise to continue talking. Jim Justin, Gregoire’s legislative director, said there are strong opinions on both sides of the issue.

“It’s going to be tough,” Justin said. He still believes lawmakers can finish their work by Wednesday, when the session comes to an end.

The Senate has wanted a constitutional amendment that would eventually reduce the state’s usage of bonds from 9 percent to 7 percent of state revenues. But Rep. Hans Dunshee, D-Snohomish, said his Democratic colleagues in the House are unwilling to even support a compromise plan — one that Dunshee proposed — that would ultimately move the debt limit to 8.5 percent and create a suggested guideline of 8 percent.

Dunshee said the curbs would lead to cuts for a variety of construction projects, including schools. That could force local governments to pay an increased share and potentially have to raise taxes.

“This is a big deal,” Dunshee said. “A lot of members of my caucus are averse to that — doing this quick for something that’s going to be there forever. If you do it wrong, you shift costs to the locals.”

But Senate Republican Leader Mike Hewitt said Dunshee’s recommended compromise — the ones Democrats rejected — doesn’t even do enough. He’s willing to make some concessions from the Senate package approved earlier this year, but he warned that Republicans won’t vote for the state’s general budget if the debt issue isn’t addressed.

Hewitt acknowledged that the issue may disrupt the push by lawmakers to complete their work.

“It could. Absolutely,” he said.

The amount Washington pays for debt service has grown 61 percent in the last 10 years to $1.8 billion. It now accounts for more than 6 percent of the state’s operating budget.

Because the proposal would amend the state constitution, it also must be sent out for a vote of the people.