State Sen. Steve Litzow (R-Mercer Island) and Rep. Tana Senn (D-Mercer Island) took a break from the second special session in Olympia to visit the Chamber of Commerce luncheon on June 4, talking about the $600 million difference between the Senate and House budgets left to be negotiated.

The legislature completed its 105-day regular session on April 24, went into its first special session on April 29 and its second on May 29. It still has not passed a budget, or approved a proposed $15 billion transportation package.

Failure to reach a compromise could result in government shutdown, but both legislators said they were “confident” that a solution exists.

“We’re right at the goal line, and hopefully we do not throw an interception,” Litzow said.

Litzow said the “single biggest issue that’s holding us up right now” is that the House is proposing a new tax on capital gains, and that the Senate is “not even considering [that].”

“We essentially agree on about 98.5 percent of the budget,” Litzow said. “There’s no huge differences that we are fighting for, outside of the capital gains tax … We don’t think we need it, and we don’t think the electorate is ready for it.”

Litzow, who chairs the Senate Education Committee, said the state has been working for the past two years on how to address the McCleary decision. Both the House and Senate’s proposed budgets include about $22 billion on education.

The Senate’s budget would reduce tuition at state colleges and universities by 25 percent where the House would merely freeze tuition, and would set aside $1.5 billion in reserves or rainy day funds to the House’s $1.25 billion. But the House wants to spend more on mental health, parks, pay raises for state employees and teachers, and twice as much as the Senate on early learning.

Both agree that voter-approved Initiative 1351, which would reduce K-12 class sizes, is not doable. It would cost about $2 billion per year, Litzow said, so he would want to send the initiative back to voters.

“We can’t fund it,” Senn said. “We’re $0.6 billion apart, not $2.6 billion.”

Senn said that new revenue sources will eventually be needed to balance the budget, and that the Senate’s plan uses some one-time revenues.

She said that a capital gains tax could provide a dedicated revenue stream, especially for higher education, and also help to fund parks, address the state’s growing mental health problem and begin to alleviate some income inequality issues.

Lawmakers are facing two deadlines in the coming weeks. The first, and official, deadline is July 1, the start of the new biennium. The second is posed by the U.S. Open golf tournament, slated for Chambers Bay the week of June 15-21, when hotel rooms in the Tacoma area will be almost completely booked.