Overtime Session Foreshadows An Even Bigger Budget Challenge In 2017

'The Mother Of All Budgets' Looms

Overtime Session Foreshadows An Even Bigger Budget Challenge In 2017
The real budget challenge for Washington state comes next year; adequately funding basic education, in compliance with the State Supreme Court's McCleary ruling. Math and science are among the subject areas where outcomes will be closely tracked in coming years. Photo: NazWeb.

As the state Legislature heads into a special session to conclude negotiations on mid-course adjustments to the $38 billion 2015-2017 state budget, some lawmakers are already looking to next year and the perfect storm they know may be waiting for them next year when a new biennial spending plan must be devised.

In a sit-down interview with Lens outside his office in the House wings early Thursday evening, Majority Leader Pat Sullivan (D-47), acknowledged that this year’s overtime negotiations are but a prelude to tougher circumstances in 2017.

That’s when a new budget will have to be hammered out under the shadow of the State Supreme Court’s McCleary ruling on fully funding K-12 education. Other variables that could add complexity are revenue forecasts and a potential recession, Sullivan said. “No one is saying it’s going to be easy next year,” he said.

K-12 Funding Task Force Recommendations Will Be Key

Some $3 billion to $4 billion will be the McCleary price tag, Sullivan said. How much of it must be committed in the new budget next year, and where the money will come from is something lawmakers are looking to a new state task force to help solve in coming months, Sullivan said. The K-12 task force “will have to make strong recommendations on the ‘how’ and the ‘what’” of funding basic education, Sullivan added.

Property taxes will likely be part of the solution but talk of a levy swap is premature, Sullivan said. A levy swap involves the balancing out of unequal burdens on local taxpayers in districts with widely varying tax bases.

Some statehouse sources have said that a 2017 McCleary deal is likely to include a net outflow of school tax monies from richer districts in and around Central Puget Sound to other parts of the state.

The politically volatile scenario also includes state control of teacher salaries, although with cost of living variations for different locales.

‘The Mother Of All Budgets’

About next year, state Rep. Larry Springer (D-45) said, “I think the budget battle is shaping up to be the mother of all budgets. The numbers there are going to be really big. And most of us down there do not think you can meet the McCleary decision without new revenue.”

The new K-12 task force is the result of SB 6195. The bi-partisan bill was signed February 29 by Washington Governor Jay Insee. It creates an Education Funding Task Force that according to the bill report will make recommendations so lawmakers can act by the end of the 2017 budget session. The aim: to “eliminate local school district dependency on local levies for implementation of the state’s program basic education.”

The non-partisan, legislatively-funded Washington State Institute For Public Policy (WSIPP) will work with independent professional consultants and task force members to develop the recommendations. It’s not at all clear if WSIPP’s gimlet-eyed sensibilities will actually influence lawmakers or school districts on the even more pressing question of precisely how the McCleary money should be spent.

WSIPP has previously reported that there are exceedingly modest benefits from class-size reductions across numerous vetted studies. The Institute also found similarly unimpressive achievement-related outcomes from all-day kindergarten.

The new Education Funding Task Force of SB 6195 evolved from a prior workgroup set up by Inslee.

Inslee’s workgroup was supposed to discuss its findings in November if a consensus was reached. But according to the Washington Association of School Administrators “no plan was unveiled and no other comments were made” until several bills including SB 6195 were introduced during the session.

House Republicans like Dan Kristiansen (R-39) claim the workgroup found local levies might be spending far less on basic education than originally thought. The new law warns that a “lack of transparency in school district data regarding how districts use local levy funds” limits the ability “to make informed decisions concerning teacher compensation.”

Regardless, finding the money to meet the McCleary obligation will be a challenge no one relishes. Drawing the state’s rainy day fund for it isn’t an option, said Springer.

On the mid-course adjustments to the 2015-2017 state budget, the House and Senate have been at loggerheads, although both sides say the gap is narrowing.

House Democrats see “small, incremental investments” in mental health, homelessness and education as among their top priorities, Sullivan said. There had been wide gaps on proposed spending, with House Democrats seeking hundreds of millions more, and Senate Republicans holding firm against that.

Progress In Narrowing The Gap

House Minority Leader Kristiansen said the point of contention on the final day of the regular session over the budget proposals concerned a mere fraction of the total spending.

Sullivan expressed hope a deal could be done in two or three more days. “We’re trying to get the framework done,” then ironing out the particulars will follow, he said. “Our goal is to get done as quickly as we can. Our budget negotiators will be down here” the next several days working on an agreement, Sullivan said.

The reported movement comes against a backdrop of wider differences earlier.

The House operating budget approved by the Appropriations Committee would have increased the 2015-17 enacted spending level by $467 million. The Senate proposal would have only added $33 million in new spending. One of the major differences was that the House proposal called for tapping $463 million from the “rainy day fund,” while the Senate proposal did not touch the fund.

The House budget had money from the rainy day fund going to cover last year’s wildfires ($190 million), homeless programs ($38 million), addressing the school district “levy equalization cliff” issue ($90 million) and paying for K-12 school construction ($149 million). The Senate budget proposed a smaller amount to pay for the wildfires, $173 million. Instead of using the rainy day fund for that, it would shift the money from the state’s General Fund to the Disaster Response Account.

Kristiansen said that aside from the wildfires, House Democrats were justifying their raid on the rainy day fund “as being these crazy emergencies, which they’re not,” since only the fires have been declared an emergency by Inslee.

Springer said it made no sense that Senate Republican were refusing to use rainy day funds to pay for a genuine emergency like the wildfires. That’s what the money was intended for, he said.

Such differences are now apparently in the process of being resolved. But they were still persistent enough to force the legislature into special session.

Governor Announces Special Session At Late Night Press Conference

Although the word had been out since the night before, the 30-day special session of the legislature was announced at a press conference late Thursday evening by Gov. Jay Insee.

“Legislators have one fundamental task that they are required every year, and that is to keep the state budget balanced,” Inslee told reporters assembled in the conference room of his office in the northwest corner of the Capitol. “There is no break and no rest.”

The Governor also announced that he had made good on a threat from Monday to veto bills if lawmakers didn’t finish by the end of the regular session. He did that by rejecting 27 Senate bills, while signing 10 bills related to health, safety and law enforcement.

State Rep. Hans Zeiger (R-25), said, “I do know there is bipartisan frustration with the governor’s decision to veto bills, and it’s a big disappointment to the many Washington citizens who advocated for those bills. Inslee’s vetoes will have zero impact on resolving budget differences between the House and Senate. In fact, it may well add work to our plate in terms of overriding the vetoes. Inslee’s inappropriate vetoes are more likely to extend than to shorten our special session.”

Among the vetoed bills are ones dealing with state employee retirement information disclosure, patient out-of-pocket health care costs, disabled college students, the state’s energy facility site evaluation council, marijuana research licenses, cannabis producer services, federal economic development funds, local government treasuries, and reverse transfer agreements.

The charter school bill approved by the House Wednesday night and the Senate Thursday was not among the bills either signed or vetoed by the Governor yesterday. It was too soon after its passage Thursday in the Senate to have made its way to him, and he has 20 days to sign it.

Reporting and writing by TJ Martinell and Matt Rosenberg.



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