New budget spares education, drops reserves

OLYMPIA — Senate Democrats released a budget plan that has officials from public schools, state colleges and some social service agencies happier than previous spending plans. It has fewer cuts in key programs than budgets proposed last year by Gov. Chris Gregoire, or earlier this month by House Democrats. It does not call for voters to approve a tax increase to “buy back” some programs that would otherwise disappear. It does rely on some accounting shifts — what some people call gimmicks — and draws down the state’s reserves below what Gregoire or other spending plans propose. But it doesn’t have support from Senate Republicans, or even enough support yet from Democrats, who hold the majority in the chamber. Asked if he had the bare minimum of 25 votes needed to pass the budget in the Senate, Ways and Means Committee Chairman Ed Murray of Seattle replied: “Not yet.” The budget proposal does have support from the teachers’ union and public school officials. Washington Education Association President Mary Lindquist called it “the best budget for K-12 schools and higher education in four years.” Mary Fertakis, president of the Washington State School Directors Association, called it a “no cuts” budget for schools with predictable funding. It “saves” $330 million by shifting a payment from the state to school districts from June 30, 2013, the last day of the current biennium, to July 1, 2013, the first day of the next biennium. The state used a similar accounting maneuver last year; legislation connected to this budget would make the shift permanent. That shift is better than cuts to programs, and knowing the payment will always be made on that day will allow schools to plan for it, Fertakis said. Gregoire also proposed that delay, as well as a reduction in payments the state makes to “property poor” districts known as levy equalization. Senate Democrats wouldn’t make that latter cut. (Editor’s note: An earlier version of this story misstated the governor’s proposed cuts to education.”) To Republicans who criticized the shift as an accounting “gimmick”, Senate Majority Leader Lisa Brown, D-Spokane, said they should decide which they’d rather do to come up with the $330 million it represents — make more cuts to state programs or raise taxes. Raising taxes takes a two-thirds vote in the Legislature, and the state has been cutting programs for several years because of the recession. “The cuts we took last year went far enough,” she said. The proposal also keeps the state’s Basic Health Plan, a medical insurance plan for low-income residents who don’t qualify for Medicaid, and the Disability Lifeline at current levels. Gregoire proposed eliminating both. Officials from Washington State and Eastern Washington universities also praised the budget, which does not cut work study or need grant programs. WSU President Elson Floyd called it “a profound commitment to higher education”. David Buri, a spokesman for EWU, said the school could avoid any further tuition increases if the proposal, or something very close to it, passes. Molly Belozer Firth, of the Community Health Network of Washington, said keeping the Basic Health Plan intact was crucial: “This is a bridge toward (federal) health care reform.” The budget was not without its critics, however. Jason Mercier, a budget analyst for the Washington Policy Center, said it does not fix the structural problems that cause gaps between what the state expects to collect and what it plans to spend on a regular basis. It has the lowest reserve of any of the budgets proposed thus far, he noted: $369 million compared to $504 million for House Democrats, $602 million for Gregoire and $651 million for House Republicans. “If adopted, lawmakers and citizens will have the privilege of going through the budget deficit yet again for the foreseeable future,” Mercier said. Murray defended drawing down reserves in the Senate Democrats proposal: “The reason we have this reserve is for a rainy day, and it is pouring.” He acknowledged the amount that would be left in the General Fund at the end of the biennium was relatively small, but could grow because of plans to expand state-funded capital projects, and the decision by Congress to extend the payroll tax cut and long-term unemployment assistance. “If the Eurozone collapses, $300 million, $700 million or $1 billion (in reserves) is not enough to keep us from coming back here again.” Unlike budgets that passed the Legislature last spring and a special session in December, this proposal has no support from Senate Republicans, despite weeks of closed door negotiations. “They negotiated in good faith. In the end, we weren’t able to reach agreement,” Murray said. He also defended the process that led to the budget proposal, which was released on day 51 of a 60-day session, seven hours before the scheduled public hearing. With a part-time “citizen Legislature”, there’s no other way to handle the budget short of extending the session, Murray said. Details of the budget will be clarified over the next few days, before it goes to a vote in the Senate, Brown said. Sen. Joe Zarelli, the top Republican on the Ways and Means Committee, said the proposal released Tuesday doesn’t uphold the principles that guided both parties through budget discussions in recent years — no gimmicks, real cuts and spending only what revenue forecasts say will come in. The plan “puts state government on course for another significant deficit next year,” he said. A budget that had more reforms, fewer gimmicks and focused spending on core services would have a better chance of winning bipartisan support, he added: “There isn’t much time left in the session but it’s still possible to do.”