Senate Republicans this week unveiled their proposed 2017-19 operating budget, which incorporates their basic education funding plan and mostly rejects Governor Jay Inslee’s $1.7 billion collective bargaining agreements (CBA) with public sector labor unions. Top-ranking Senate Majority Coalition leaders touted the budget as a fiscally responsible approach to critical state spending, while critics attacked spending cuts and the increased tax burden of the McCleary solution’s local effort levy on some school districts. Budget negotiations could involve the fate of two Senate bills that would reform the collective bargaining process between the governor and public sector union officials.
Budgeting Under Fragile State Economy
At a March 21 press conference, Senate Ways and Means Committee Chair Sen. John Braun (R-20) underscored the economic fragility of many Washington counties. The most recent state data shows the seasonally unadjusted unemployment rates in January for much of Washington was well above the national average of 4.8 percent.
“It’s getting better, but we have to be very careful to protect the economy as we go forward,” Braun said.
He added that their proposed budget adheres to the state’s four-year balanced budget requirement, which he called “most important tool in a generation to keep us off the budget roller coaster.”
State Report: $571 Million In Unexpected Revenue
Making that accomplishment easier was a new quarterly report put out by the state Economic and Revenue Forecast Council (ERFC) a week prior which projects an additional $571 million in state revenue over the next biennium.
The Senate’s proposed operating budget includes $43.0 billion in total spending from the Near General Fund-State, and Opportunity Pathways Account. That is a $5 billion spending increase from the 2015-17 biennium when accounting for the 2017 supplemental.
Some of the budget’s other major spending includes:
- $1.8 billion on the state basic education system due to changing the funding formula from a staff-based to student-based model.
- $493 million on implementing the K-3 class size reduction approved by the legislature (via SHB 2776). The budget proposes repealing the rest of I-1351, which would save $1.9 billion during the 2019-21 biennium.
- $700 million from the Budget Stabilization Account, i.e. “Rainy Day Fund,” to reduce the unfunded liability in the PERS 1 retirement system (the state would collect $56 million in a new surcharge on public agencies using PERS).
The budget would include only $240 million of the $1.7 billion in four-year collective bargaining agreements made between public sector union officials and Inslee in secret negotiations last summer. It approves the CBAs with Washington State patrol and Department of Corrections, and provides a $1,000 wage increase over the biennium for all state employees.
Inslee’s Collective Bargaining Agreements Rejected
Braun told reporters they included CBAs for state agencies that have high turnover rates compared to the national average.
“We ask, ‘Are they truly necessary?’” he said.
He has previously criticized the CBAs and questioned their financial feasibility. Under state law, the legislature is unable to amend CBAs and can only approve or reject them.
“We just think that that’s a decision that should be done at the legislature in the legislative process,” he added.
In agreement was State Sen. Dino Rossi (R-45), co-vice chair of Ways and Means and the primary sponsor of SB 5533. The bill would prohibit collective bargaining groups that negotiate with the governor from contributing to the gubernatorial campaigns. SB 5533 passed the state Senate on a party-line vote.
Another bill he cosponsored, SB 5545 would make state and local collective bargaining negotiations open to the public. It has passed out of committee but not yet reached the Senate floor.
Although the legislature has approved every CBA since the 2002 law was passed, these two bills could influence budget negotiations between state lawmakers. A 2006 paper by Christopher D. Abbott at the University of Washington Law Review argued 2002 CBA law violates the separation of powers doctrine under the Washington State Constitution.
Potential Revival Of Proposed Income Tax Ban
They might also use negotiations to resurrect SJR 8204, a constitutional amendment banning income taxes; a section of their proposed budget funds its election costs. The bill failed to gain the necessary two-thirds majority from the state Senate.
Although Braun acknowledged the Senate Democratic Caucus “provided many thoughtful ideas…that helped refine our thinking,” reaction by Democrat lawmakers to the budget was unenthusiastic at best. Inslee told reporters at a March 21 press conference that budget “the Senate put forward simply does not rise to this challenge or this opportunity. It does not finish the job of educating our children.”
“In some sense it’s hard to take this proposal seriously,” he added.
Senate Minority Leader Sen. Sharon Nelson (D-34) was even harsher in a March 21 statement, calling the budget proposal “cold-blooded” for including cuts to state programs such as the Temporary Assistance for Needy Families and WorkFirst ($96 million) and Funding for Housing and Essential Needs ($52.7 million).
House Democrats were also quick to criticize a new major source of state revenue via the local effort levy as part of the Senate Republican’s K-12 funding plan. The tax is expected to generate $1.5 billion in the 2017-19 biennium and $4 billion in the 2019-21 biennium. It replaces current local school district levies with a statewide rate of $.45 per $1,000 in assessed valuation (AV) in 2018, and then increases it to $1.80 in 2019. Although most of the state’s 295 school districts would have their local tax rate lowered, many districts in the central Puget Sound region would have their rates increased.
“This vision that everybody in King County is rich is just not reality,” Inslee said.
Braun said at the Senate Republican press conference that the local property tax would provide “ample, fair, and transparent funding.”
He added that, “there’s enormous inequity in the state now” when it comes to school district levy rates, and “we continue to work to make this as fair as possible across the state.”
“If we can get this right, and I believe we have, the decisions we make in this budget will have a positive impact on the state of Washington this year and for decades in the future,” he added.
Senate Majority Leader Mark Schoesler (R-9) told reporters March 21 that “this budget makes an unprecedented investment in K-12 and higher ed., and despite all the rhetoric about the other Washington, we’ve stayed focused on what’s most important to residents in this Washington in all 39 counties.”