OLYMPIA – A $1.2 billion add-on to the state’s main operating budget, with a scheduled tax break for property owners and enough money to satisfy a court order to improve public schools, passed both chambers of the Legislature Thursday.
On the last day of the Legislature’s 60-day session, Democrats extolled their supplemental budget’s ability to help students in public schools and colleges, improve the state’s embattled mental health institutions and provide some reduction next year for the jump in property taxes this year.
“We didn’t accomplish everything but we did accomplish our budget goals,” Senate Ways and Means Committee Chairman Christine Rolfes, D-Bainbridge Island, said.
The budget does fully fund public schools, finally getting the state out from under years of a state Supreme Court order, said Sen. Andy Billig, D-Spokane.
Republicans criticized it as an example of profligate spending that can’t be sustained if a recession or other emergency occurs, and they said more money should have been given back to taxpayers and put in reserves.
“In my 26 years here, I’ve seen three recessions, horrendous forest fires, flooding of the Chehalis River,” Sen. Mark Schoesler, R-Ritzville, said. “We did not save in the budget for the rainy day.”
Washington budgets on a two-year cycle, and the Legislature was in an unusual position of having some $2.3 billion more in projected tax revenue than lawmakers expected when they approved the 2017-19 budget last June that totals $42.7 billion.
Tax revenue kept growing because of the strong economy with every quarterly report, and last month they were given the latest projected bump of $1.3 billion.
Although Gov. Jay Inslee called for a carbon tax and House Democrats talked about a capital gains tax, the budget passed Thursday has neither. Instead, it attempts to reduce the impact of last year’s jump in the state’s property tax levy that was approved as a way to pay for court-ordered improvements to public schools.
If signed by Inslee, the state’s property tax levy would come down by 30 cents per $1,000 of assessed value in 2019. Republicans called for a bigger cut this year, but Democrats said trying to reduce tax assessments that already have been sent out, and in some cases already collected, would be too confusing for taxpayers and put too much strain on county governments.
Democrats pay for the tax cut by keeping some of the excess revenue from going into the general fund, where it would automatically be put in reserves. In a repeat of Wednesday’s debate over the tax cut, Republicans denounced that as an “accounting maneuver.”
Here are some highlights from the budget:
The budget adds $776 million for raises for teachers and other school employees. Last year, the Supreme Court said the Legislature had accomplished most of the tasks of fully paying for the state’s share of public education. But it said lawmakers had illegally delayed the full raises to teachers and other staff. It also sets aside $105 million for penalties the court assessed over the years.
Lawmakers also added $27 million for special education students and $29 million for school employee benefit programs.
Colleges and universities
The supplemental budget adds $18.5 million to the State Need Grant program through mid-2019, and projects a total of $116 million for that financial aid program through mid-2021. That will clear up about three-fourths of the waiting list of approximately 4,600 students, Democrats said, and put it on track to cover all eligible students by 2022.
It adds $4.3 million to the Opportunity Scholarship program and $750,000 for Gold Star Family stipends.
Facing federal court sanctions for shortcomings in its mental health services, the budget adds $165 million to an array of programs and institutions. It adds $50 million to state hospitals, $46 million for fines from the court case and $40 million to community health treatment services, which includes increased Medicaid rates.
Sen. John Braun, R-Centralia, argued the budget was taking the wrong approach. “State hospitals are in disarray,” he said. “It’s not a matter of money, it’s a matter of management.”
It adds $28 million to the Department of Natural Resources for the cost of wildfire suppression in 2018, and another $7 million to the State Patrol for fire mobilization services during the 2017 fire season.
It also adds $48 million to the Military Department Disaster Recovery Account for efforts connected to 13 presidentially declared state disasters.
The budget projects it will have $1.2 billion that won’t be spent on the various programs and policies covered by the budget and another $1.1 billion of the extra revenue that will go into the Budget Stabilization Account, which is often called the Rainy Day Fund.
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