Budget Set – Now Real Work Starts

Budget Set - Now Real Work Starts
Washington House Democrats announce a budget deal. Left to right: Rep. Timm Ormsby (D-3), Rep. Pat Sullivan (D-47), Rep. Kristine Lytton (D-40), and Rep. Hans Dunshee (D-44). Image: TVW

After a 19-day special session the state legislature approved a supplemental operating budget that despite new spending preserves the four-year balanced budget and includes no new taxes. Business leaders and policy experts had previously warned against raiding the Budget Stabilization Account to pay for new spending. When lawmakers reconvene next January after fall elections they’ll confront a heavy lift on funding basic education. A related task force they created this session begins its work soon.

A ‘True Supplemental Budget’

Rep. Bruce Chandler (R-15) said it “probably looks more like a true supplemental budget than any we’ve seen in recent memory.” He sees it as a victory for “folks working hard to pay the state’s bills.” Chandler is the Ranking Minority Member of the House Appropriations Committee.

Sen. John Braun (R-20) said the supplemental budget maintains the 2015-17 budget’s model of “living within the means provided by taxpayers.” Braun is the vice-chair of the Senate Ways and Means Committee and a lead budget negotiator

The budget’s passage without new taxes was celebrated on social media by lawmakers like Appropriations Committee member Rep. Luanne Van Werven (R-42).

Democrats Find Bright Spots In Budget Deal, Too

At the same time, House Democrats budget leaders like Majority Leader Pat Sullivan (D-47) said they managed to make incremental progress in funding for things like youth homelessness, K-12 education and mental health services.

“We believe this budget gets us there,” Sullivan said during a Tuesday press conference.

For example, the budget allocates almost $15 million for homelessness, $11 million to Western State Hospital and $7 million for new teacher recruitment.

Appropriations Committee Chair Rep. Hans Dunshee (D-44) said one of the biggest compromises they extracted from Senate Republicans was scrapping their plan to pull $43 million from the mental health reserves with the Regional Support Network.

Strong Emergency Fund Reserve

The approved budget creates a strong emergency fund reserve. It withdraws $190 million from the “rainy day fund” to cover last year’s wildfires. This leaves $701 million in the account at the end of 2015-17 biennium and an estimated $1.1 billion at the end of the 2017-19 biennium.

In lieu of new taxes the budget assumes collection of $46 million in unpaid taxes on advertising or royalties. Penalties are waived if the back taxes are paid by October.

To cover new spending the budget also draws an additional $154 million from the Public Works Assistance Account on top of the $73 million biennial transfer.

The new budget spends $277 million less than what House Democrats had originally sought but $157 million more than the first budget proposal approved by the Senate.

Not all lawmakers were pleased with the final product.

In a Facebook post Sen. Reuven Carlyle (D-36) criticized the budget for not authorizing a levy lid limit for school districts. He also felt it represented a “punt” on the McCleary mandate to increase basic education funding.

This sentiment was shared by Sen. David Frockt (D-46) who also voted against it for similar reasons.

Now Real Work Starts

A new joint Education Task Force created by the state legislature aims to address both those issues before the levy lid “cliff” occurs in 2018. Sullivan said the work would begin immediately after the end of the legislative session. The task force will also determine a new base salary for teachers and how to pay for it.

The McCleary mandate is expected to cost three to four billion dollars, but some believe much of that will be covered by shifting to the state local levy money already used to cover basic education.

While pleased with much of the supplemental budget’s outcome, some policy experts aren’t thrilled with all of it.

Performance Audit Funding Would Take A $10 Million Hit

Jason Mercier at the Washington Policy Center decried a section of the budget that appropriates $10 million from the account used for performance audits. The supplemental budget proposals of Governor Jay Inslee and the House and Senate had all sought to sweep away the additional performance audit funds after a similar $12.5 million grab from the same pot in the approved biennial budget last year.

This had sparked vocal opposition from Deputy Auditor Jan Jutte.

This appropriation means “we can kiss the rest of the performance audit work plan for (20)15-17 goodbye,” Mercier remarked in an email. In a statement released today Jutte said the State auditor’s office was preparing to lay off some performance audit personnel and terminate consulting arrangements with subject matter experts on pending performance audits.

A veto by Inslee of the sweep-away is theoretically possible, and has precedent, Mercier wrote Tuesday.

As part of the new budget, medical assistance forecasting has been moved from the Health Care Authority to the Office of Financial Management. In January HCA admitted to sizable miscalculations in their budget projections.

During the Tuesday press conference Dunshee also revealed that one of the things holding up negotiations had been a bill capping overtime pay for state-paid individual provider home care aides (IPs). HB 1725 was approved by both the House and Senate Tuesday, with $29 million allocated in the budget for home health care individual provider overtime based on a federal rule.

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