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Lawmakers adjourn with balanced state budget

OLYMPIA - Levy equalization funding will not be cut, despite worries in many local school districts that state legislators would balance the budget on the backs of rural schools.

A compromise budget, which reportedly brings into balance what was a projected half a billion dollar deficit, was passed in the early hours this past Wednesday morning after a second special session in 2012 had to be called when time ran out on the first special session on Tuesday. The budget does not cut education spending for either public schools or higher education, leaves the social safety net mostly intact and promises to create new jobs.

Among the highlights of the marathon session was a bill to require the budget to be balanced over four years instead of just two, forcing legislators to look at the long-term effects of their choices.

"With these reforms, we all but ensure that we won't be back here in January facing another billion-dollar budget deficit," said Jim Honeyford (R-Sunnyside).

"We could have settled for less just to get out of Olympia a month ago, but in the end it would have left state taxpayers with a perennial budget deficit. The Senate coalition was steadfast in its belief that enough was enough, and fortunately we were able to stick to our guns on this one."

Another bill will require school districts to offer transparency and choice in health care plans for their staff. Yet another bill overhauls the state pension system for an estimated $1.3 billion in savings over 25 years.

Also during the session, legislators passed a bill that will create an estimated 43,000 jobs for construction and other projects.

"It wasn't easy - and nobody got everything they wanted - but lawmakers proved it is possible to come together and find a way to protect what's most important, including education and jobs, while also adopting long-overdue reform measures that will hopefully end the cycle of never-ending budget deficits," said Association of Washington Business President Don Brunell.

The governor's original budget proposal included massive cuts to education, including slashing the amount of money provided by levy equalization to poorer school districts. The original version of the bill reflected many of the governor's ideas. Democrats pushed the idea of adding to the sales tax to fund education, but the idea was dropped and the final budget changes the education funding very little.

Including the special session held late last year to deal with the state budget, the regular 2012 60-day session, the first 2012 30-day special session and the barely-one-day second 2012 special session, lawmakers have spent a total of 108 days in Olympia to reach this budget agreement.

But the budget isn't all good news. According to the Washington Policy Center, a non-partisan think tank based in Olympia, the new budget has one major flaw which may result in the legislature revisiting it sooner than anticipated. The state reserves, which ideally should be close to 5 percent, are instead at 1 percent. That leaves only $319 million in total reserves compared to $31.1 billion of spending.

However, the center also notes that the budget gives the governor more flexibility on across-the-board cuts, which could restore balance in a critical situation. The governor's original proposal called for 2 percent reserves.

"I'm pleased the legislature reached an agreement this morning to solve our budget shortfall. The supplemental budget passed preserves critical programs, including education, and sets our state on a more sustainable path," said Gov. Chris Gregoire in her official statement.

"Our job isn't done," she added.

"Implementing this supplemental budget won't be easy, but I'm confident we've developed a solution that protects our state's financial future while preserving critical programs that Washingtonians rely on."

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