If you didn't know better, you'd think our current legislative special session was called primarily for the purpose of bailing out Wenatchee, at least judging from the buzz in the hallways of the Capitol yesterday. That's all any of the in people wanted to talk about, and with a $42 million default looming on Wenatchee's municipally financed Toyota Town Center arena, a proposed bailout somehow became the first order of business.

But... it doesn't look like it's gonna happen.

"There are bailout Republicans and there are sane Republicans," Rep. Glenn Anderson (R-5) said today regarding the Republican-sponsored bailout bill... or so Rep. Luis Moscoso (D-1) tells me. According to Moscoso, House R's are having a tough time lining up even half their caucus behind a bill sponsored by their own leadership, not enough of a show of support to satisfy some Dems. But the bill's woes in the House are nothing compared to its troubles in the Senate, where several senators have already pronounced it DOA.

Sen. Ed Murray (D-43) insists the bailout bill isn't dead, though he wouldn't mourn it if it was. Murray says he personally opposes the bill, but would let it out of his Ways and Means Committee if it had the votes. "But the people out there trying to find the votes for the bill can't find them, " says Murray.

The concern voiced by state Treasurer Jim McIntire and some legislators is that the bond market would punish other local jurisdictions with higher interest rates should the state allow the Wenatchee Public Facilities District to default, but Murray isn't buying it. When the Washington Public Power Supply System defaulted on $2.25 billion in bonds after abandoning construction of two nuclear power plants, King County's bond ratings were not impacted says Murray, so he dismisses fears of across the board ratings downgrades. In fact, he's more worried about how a bailout might negatively impact the state's credit ratings should it establish a policy of de facto guaranteeing the debt of local jurisdictions. Murray's also concerned about the moral hazard such a bailout would promote should local governments feel shielded from the consequences of their own financial ineptitude.

It's just bad policy says Murray. And bad politics. "If they come forward with a proposal in which the bondholders have to take a hit as well as the taxpayers," says Murray, he might be able to support it. But it's hard for Murray to see the political wisdom in kicking off the special session with a bill that ultimately bails out Wenatchee's bondholders... a bailout that now looks unlikely without a strong Republican show of support.