Lawmakers Pass Compromise Budget

After three special sessions, the Washington state legislature approved a 2017-19 operating budget Friday, June 30, averting a government shutdown the next day. The new budget spends nearly $4 billion, with $1.8 billion on basic education. Photo: Lincolnite

After three special sessions, the Washington state legislature Friday approved a 2017-19 operating budget signed by Governor Jay Inslee just one hour before midnight and a possible government shutdown.

The budget compromise between House Democrats and Senate Republicans contains what lawmakers believe will satisfy the State Supreme Court’s McCleary ruling for fully funding basic education. If the budget’s four-year spending plan is realized, by 2021 the state will have added nearly $13 billion in new education spending since the 2012 ruling.

SB 5883 was approved in the state Senate by a 39-10 vote, 70-23 in the House. It spends $43.7 billion from the Near General Fund-State and Opportunity Pathways (NGF-P), which is a $5.2 billion, or 13.5 percent increase, from the prior biennial budget. The biggest spending increase is in basic education at $1.8 billion; $7.3 billion over four years through 1 – though the state will save $1.9 billion by declining to fund classroom size reduction via Initiative 1351.

Although many new revenue sources such as a capital gains income tax and a business and occupation (B&O) tax increase were proposed during the session, the operating budget’s new spending relies primarily on a local levy effort that caps the school district property taxes at $1.50 per $1,000 in assessed valuation, while raising the statewide property tax. The operating budget also relies on $456.4 million from online sales tax collection, along with a tax on bottled water.

Sen. Doug Ericksen (R-41) told colleagues Friday on the Senate floor that while he’s concerned about spending increase from the previous biennium, “I can support this budget because we don’t go out and do an income tax on the people of Washington state. We don’t have a tax on energy being imposed on working families. We prevent B&O tax increases on all businesses all throughout Washington, and we prevent the real estate excise tax on apartment dwellers.”

Fiscal concerns were also shared by lawmakers such as Sen. Mark Mullet (R-5), who voted against the budget. He told colleagues that while “I really support the policy on the education stuff,” he is against the use of funds from public works ($254 million in 2017-19) to pay for it, along with the use of bonds to cover the gap in public work funds. “I get we end up in these boxes at the last minute where we have to cut deals and try to get out of here, but when we’re borrowing money at four percent to make payroll in our operating budget, it just gives me a bad feeling in my stomach.”

For K-12, the budget removes the state’s seniority-based teacher salary, while increasing first-year teacher’s salaries from $35,000 to $40,000. The budget increases spending for a variety of programs, including the Learning Assistance Program, special education, transitional bilingual program and the highly capable program.

Speaking on the basic education funding bill, House Majority Leader Pat Sullivan (D-47) told colleagues Friday on the House floor that it “provides significant investments that will allow the 1.1 million schoolchildren in the state of Washington to get opportunities that they’re not getting today.”

In a statement, Superintendent of Public Instruction Chris Reykdal said: “The Legislature has now made the important turn to go beyond the bare minimums called for by the state Supreme Court – they are beginning the long work of transforming our schools with new resources that put kids and educators before partisan politics. I applaud this strong start.”

According to an analysis by the Washington Research Council, the approved budget mirrors that of the House proposal on higher education and special appropriations, while public school spending is closest to that of the Senate version.

Other budget highlights include:

  • $925 million over four years in spending from the Budget Stabilization Account, a.k.a. the “rainy day fund,” for pension-related spending, leaving the account with $1.7 billion in 2021 (the current balance is $1.6 billion). Unless spent on an emergency, a supermajority vote is required by the legislature to withdraw rainy day funds.
  • Passage of SB 5977 sponsored by Sen. Michael Baumgartner (R-6), which gradually reduces the B&O manufacturing tax for all business in the state to the same rate paid by Boeing.
  • $4.6 million to implement Inslee’s Department of Ecology Clean Air Rule restricting greenhouse gas emissions for natural gas distributors, oil refineries and power plants. The rule is currently being challenged in court.

 

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