OLYMPIA, Wash. (AP) - With tax revenue in decline and a financial outlook that some joke will get worse before it gets worse, state lawmakers have passed the halfway mark with their biggest challenge still unsolved: How to close the state's roughly $8 billion budget shortfall while maintaining safety-net programs for the poor and jobless.

It's a financial train wreck that House Majority Leader Lynn Kessler, D-Hoquiam, calls the worst she's seen through 17 years in the Legislature.

"Everybody is going to lose skin in this game. There isn't anybody escaping this one," Kessler said.

In the first half of the 105-day legislative session, lawmakers have bumped up jobless benefits by $45 a week, trimmed some $290 million in current spending and adopted a plan to spend federal stimulus money on transportation projects from Omak to the Oregon line.

The biggest problem remains balancing the budget while avoiding drastic cuts to social programs promoted in last year's elections, which retained Democratic majorities in both chambers and returned Gov. Chris Gregoire to office.

Senate Majority Leader Lisa Brown, D-Spokane, has indicated she is open to sending tax increases to voters. Kessler said members of the House are more reluctant, but they might not have any other options.

Some key interest groups, including Democratic supporters in organized labor and environmental groups, have paid for polling to see what sort of tax increases the public may be willing to support.

"There are very few things that we can tax," said Sen. Ed Murray, D-Seattle. "I think you're looking at some fairly traditional things that we tax - sin taxes, sales taxes - limited for a period of time."

Increasing property taxes, he said, was out of the question.

The tax talk rankles minority Republicans, who say Democrats are acting behind closed doors without transparency or public input.

"They are afraid to share publicly what they are doing," said the Republican budget chief, Sen. Joe Zarelli of Ridgefield.

Zarelli also sees the developing campaign for a public tax vote as a pure "business transaction" - hospitals, teachers and others will bankroll the campaign, betting that it restores streams of state money which flow to them through health care and education programs.

"You have these special interest groups, sacred cows if you will, that are willing to go out and spend some money to make some money," Zarelli said.

The Legislature's openness to tax hikes is a notable departure from Gregoire's budget, which featured significant cuts to social programs and kept her no-new-taxes pledge from the 2008 campaign. Even Gregoire has said she "hates" her budget.

The budget-writing will seriously heat up next week, when state economists release a new forecast of tax income. In the meantime, the Legislature has spent most of its energy refining a raft of other bills that will still be in play during the second half of the session.

With the usual caveat that nothing is truly finished while the Legislature is still in town, here's look at some of the measures that are still alive or seem dead at the halfway point.

STILL ALIVE:

-GAY RIGHTS: Same-sex couples could get all of the state rights afforded to married couples under a measure passed by the Senate. The bill would make changes to all remaining areas of state law where currently only married couples are addressed. The measure would add same-sex domestic partners to state statutes ranging from labor and employment to pensions and other public employee benefits. It was approved by the Senate and now will be considered by the House.

-TEACHER MISCONDUCT: A proposal to toughen and clarify state law concerning sexual misconduct by school employees has passed out of the House. The bill says that employees - including bus drivers, janitors and teachers - who have sexual relations with an enrolled student could be charged with sexual misconduct, even if the student is an adult between the age of 18 and 21.

-WASL CHANGES: The Washington Assessment of Student Learning may be changed under a bill passed in the Senate. The bill doesn't make many radical changes and seems to support the revisions new schools chief Randy Dorn has in mind. A related measure that would change the math graduation requirements and give students a break after attempting the math WASL one time has also passed the Senate.

-GREEN ELECTRICITY: Utilities could get more flexibility in meeting the requirements of voter-approved Initiative 937 under a bill that has passed the Senate. The bill changes targets for green energy, but also allows credits for hydropower. Opponents say that undermines I-937, which didn't include hydro in the original requirement that utilities get 15 percent of their electricity through renewable sources by 2020.

-GREENHOUSE GASES: A bill setting some direction for the state in curbing greenhouse gases passed the Senate and awaits action in the House committee. The bill is a much weaker version of Gov. Chris Gregoire's proposal for a cap-and-trade program to regulate carbon dioxide and other emissions. The environmental lobby has made a cap-and-trade plan one of its priorities this year and is pushing for a stronger program.

-NEWSPAPERS: The state's struggling newspapers could get a temporary break on the state's main business tax. Under a plan approved by the House, the business and occupation tax on newspapers would be cut by 40 percent through 2015.

-BIAW: One of the Democrats' biggest political foes would have to report how it spends workers' compensation refunds under a bill passed by the Senate. The bill targets the Building Industry Association of Washington, which has aggressively campaigned against Democrats.

-YOUNG HUNTERS: A proposal that passed the House would reinstate a law that hunters under 14 be accompanied by an experienced adult. The bill is a response to the shooting death of a hiker killed by a 14-year-old boy who thought she was a bear.

-HOMEOWNER PROTECTIONS: Homeowners could get additional warranty protections against shoddy construction under separate bills approved by the both the Senate and House.

-BATHROOM BREAK: The House has passed a bill mandating emergency access to businesses' private restrooms for sufferers of Crohn's disease and related bowel disorders. The bill was helped along by Pearl Jam guitarist Mike McCready - a Crohn's sufferer - who lobbied for its approval, telling lawmakers that Crohn's sufferers can have public accidents if they can't get quick access to a bathroom.

BILLS THAT APPEAR DEAD:

-GREEN GROCERY BAGS: A measure requiring grocery stores to provide a compostable, recyclable or reusable bag didn't make it out of the House environmental committee. Other cities like San Francisco have already banned petroleum-based plastic bags in large grocery stores.

-DNA TESTING: A bill that would expand Washington law to require a DNA sample be collected from anyone arrested in a felony or gross misdemeanor investigation died in committee. The bill was criticized on constitutional and cost grounds.

-BURIED WITH PETS: State Sen. Ken Jacobsen, D-Seattle, wants to be buried with his deceased cat - so much so that he proposed a bill allowing him to do just that. Despite an outpouring of support from pet lovers of all stripes, legislators were not moved. Now at midpoint in the session, Jacobsen is alive and well, but his bill isn't.

-BALLOT DEADLINES: A measure that would have required voters to get their ballots back to the county elections office by Election Day, rather than simply postmarked that day. This bill stalled in committee.

-MARIJUANA PENTALTIES: Efforts to decriminalize possession of 1.4 ounces or less of marijuana failed to make it past the bill cutoff date. Measures were proposed in both the House and the Senate, reducing the penalty for possessing small amounts of the drug to a civil infraction.

-PORN TAX: A proposed tax on pornography and other adult products and services drew plenty of attention, but never made it past committee. There were free speech problems with the plan, since it targeted a particular type of expression for special taxation.

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AP writers Donna Gordon Blankinship, Rachel La Corte, Phuong Le and Curt Woodward contributed to this report.