Washington lawmakers edge closer to final deal

OLYMPIA, Wash. (AP) -- Washington lawmakers edged closer to a final budget deal Friday, aided by an agreement on fixing the state's estate tax, the prospect of an unexpected revenue boost and fresh signs of compromise.

The estate tax solution was signed by Gov. Jay Inslee early Friday morning, protecting about $160 million in estate tax revenue that otherwise would have been lost through refunds and a decline in future collections over the next two years.

Meanwhile, Senate Majority Leader Rodney Tom said budget negotiators may also get a boost early next week when the state gets a new revenue forecast that he expects to be in a positive direction. While state leaders are trying to identify which workers would need to be temporarily laid off in the even that lawmakers don't complete a budget by June 30, Tom insisted a deal will get done.

"There will be no government shutdown," said Tom, a Democrat who leads a largely Republican majority in the Senate.

Tom also said Senate leaders have largely backed away from two policy bills that they had sought — one that would have given principals the option of rejecting teachers who are appointed to their schools and the other that would have placed limits on the rate of growth for non-education spending in the state budget. Tom said the Senate is moving away from those proposals because of opposition from the House.

The Senate is still pushing for changes in the state's workers' compensation system and another education bill that makes a variety of changes, including an enhanced focus on young students who are reading below grade level and development of rules on how to handle student discipline.

House Majority Leader Pat Sullivan wasn't as confident as Tom that the Legislature could avoid a shutdown. He said the Senate insistence of working on policy bills at this stage complicates the process.

"We still have a lot of work to do," Sullivan said.

Inslee said he hoped lawmakers from both sides walked away from the late-night estate tax agreement knowing what mutual victory feels like. Lawmakers had scrambled to reach a deal in time to prevent the first $13 million the state agency said it would have to send to 10 estates before a 9 a.m. court hearing on Friday.

The measure passed Thursday night was a legislative workaround to last year's ruling by the state Supreme Court, which determined the estate tax did not apply to married couples who had used a certain type of trust in their estate planning.

"When you reach consensus to help the state move forward, it's mutual victory," Inslee said.

Lawmakers are looking to balance a roughly $1 billion shortfall and hoping to add a similar amount of money to the state's education system in response to a state Supreme Court ruling.