Washington Senate budget raises eyebrows, but not taxes

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OLYMPIA — State lawmakers are going down to the wire to negotiate a budget deal, but they haven’t even agreed on whether the numbers they’re using are real or imaginary.

Some 12 percent of the Senate’s proposed budget solution, at least $300 million, is achieved through a series of guesses about how much money can be saved and how much in extra taxes can be collected without specific directives or changes in the law.

The GOP-led budget bridges the state’s fiscal shortfall and plows an extra $1 billion into basic education without raising taxes — at least on paper. Democrats argue the Senate is playing with funny money.

“It’s one thing to identify it,” said House Finance Committee Chairman Reuven Carlyle, a Seattle Democrat. “It’s another thing to book it, go to the bank, cash the check and go down to your local mom-and-pop and start spending the money.”

The lead author of the plan, Andy Hill, the Senate budget chairman and a Redmond Republican, said he is confident the assumptions will pan out. A $33 billion budget, he said, outlines categories of spending but can’t be expected to specify every dollar spent.

Hill said it’s the House budget that is questionable with its reliance on hundreds of millions of dollars in new tax revenue that has not yet passed the House and $240 million from the state’s rainy day fund that requires supermajority votes to tap.

“Ross Hunter admitted he doesn’t have the votes to do it. So that seems completely imaginary, of their own admission,” Hill said.

Hunter, the House budget chairman and another Democratic critic of the Senate budget math, has said the rainy day fund issue would be resolved in final negotiations.

Negotiators have just a week left to strike a deal before the end of their 105-day session. The Republican-flavored Senate budget is far apart from the one in the House, which would pay for education with fewer cuts to social services and with some $1.3 billion in new revenue from expiring taxes that would be renewed and tax breaks that would be eliminated, many of which went before their first public hearing Friday.

Some of the Senate’s assumptions are ambitious versions of a common tactic in state budgeting, one that even the House budget does in smaller form. That is to assume state agencies can afford to take a bit off the top.

But in a more creative move, the Senate is also betting the state can collect $40 million in extra sales tax from online transactions over the next two years without raising taxes or hiring new tax collectors — targeting taxes that are already due but not collected.

Shoppers are supposed to send government a cut of their online purchases, but hardly anyone does. Federal courts have ruled that states can’t make online retailers collect the tax unless those sellers have a physical presence in the state, and there’s a debate over what presence means.

A larger share of the unspecified budget changes, roughly $150 million, comes in the form of savings from efficiencies.

The Senate says its proposed savings aren’t just built on a wing and prayer. Hill said budget writers and staff have scoured the books of some agencies and found areas that seem to yield even more cuts than he built into the budget.

On top of the efficiencies, the Senate budget also assumes agencies will leave about $120 million unspent. That’s less than the average over the past few years but higher than the typical amounts in the years before the recession hit.