The state House approved its version of the state budget for the next two years.
It's calling for reducing spending by $4.4 billion and agreeing to privatize liquor stores as a way to fill the $5.1 billion gap between projected revenue and projected expenses.
On Tuesday, the Senate took a crack at the budget. Its plan reduces spending by $4.8 billion and shifts a few hundred million around to cover the holes.
So now the heavy lifting - and real political maneuvering - begins as the House and Senate work to come to an agreement.
"We have a legal requirement to create a balanced budget even in time of significant decline in revenue, and we have done so," said Rep. Ross Hunter, House Ways and Means chairman "This budget is responsible. We spend less in this budget, in this biennium, than the revenues we expect to bring in."
Perhaps it is reasonable, but it's not really at a "time of significant decline in revenue." The revenue forecast in March projected an overall increase of about $3.9 billion over the next two years - nearly a 14 percent jump.
This, of course, begs the question: How can the state take in about 7 percent more money a year and still be in such a dire financial situation?
There's no easy answer, but it essentially boils down to the state having to spend more for social services, many of which are mandated by the federal government. As the economy hit the skids, more folks qualified for medical care and other subsidies.
Think about how health insurance and medical costs have soared for families, and it's even worse for state government. When the economy faltered the number of people in need of state services increased.
Unfortunately, higher education is taking a big hit in funding, which will be made up with higher tuition. The House plan has a reduction of 8.97 percent for higher education and the Senate a reduction of 8.26 percent, according to the Washington Roundtable.
The public school system employees - including teachers - are also targeted for a reduction in cash even though both the House and Senate versions of the budget show an overall increase in spending on K-12 education. The House proposal calls for a 7.2 percent increase in public education funding while the Senate calls for a 5.43 percent increase in funding.
Overall, according to the Washington Roundtable, the House budget increases spending by 5.55 percent in the next two years over the 2009-2011 budget cycle. The Senate increases it a bit less, 4.48 percent.
The huge increase in spending comes in social or human services, where the House proposes a 13 percent increase and the Senate a 12.78 percent increase.
And when the House and Senate come together in the next 10 days, and they will come together (although it might take more than 10 days), a spending plan will be adopted that just about everybody will hate.
Yet, the state will be spending more - billions more - over the next two years.