State reaches budget agreement, avoids shutdown

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OLYMPIA, Wash. - The State Legislature has reached a budget agreement, averting the government shutdown that would have happened Monday.

The government shutdown would have caused thousands to lose services, and at points this month it look as though a deal might not be reached by the 11:59 p.m. Sunday deadline. Furlough notices had been sent to 26,000 state employees.

Late Thursday morning, Inslee announced the budget agreement.

"I am happy and I know we are all relieved to report to you that lawmakers have reached agreement on an operating budget for the next biennium," Inslee said. "This allows us to avert a government shutdown on Monday. Legislative leaders tell me they will move as quickly as possible to pass the budget and get it to me for my signature. They say that can be done by 5 p.m. Friday. However, the deal reached today makes it clear that state government will continue to operate. We will be notifying state employees to report to work Monday, July 1. Government operations will not be interrupted. All government functions will be in operation Monday. Washington will be at work Monday."

Budget negotiators were seen entering Inslee's office Wednesday night and Senate Majority Leader Rodney Tom (D)-Medina said there was agreement on a "framework" of a deal. A likely new tax on land-line telephones is one of the reasons negotiators were very close to a budget deal, Tom told KIRO 7 on Wednesday.

Consumers already pay state and local taxes on cable TV, cellphones and phones that use the Internet. The new land-line tax is a response to an industry demand to treat all telecommunications services equally or face a $1 billion lawsuit from the industry. As part of the plan, consumers would pay 95 cents a month for each land-line. The tax would add $85 million to state coffers.

Had the shutdown occurred, some 195,000 clients in the Women, Infant, and Children nutrition program would have lost vouchers used at supermarkets. Earlier this month, some 26,000 Medicaid patients and 11,500 vocational rehabilitation clients were notified that they wouldn't be served, and 7,000 reservations at state parks would have been canceled.