OLYMPIA – With minutes to spare, lawmakers passed a two-year operating budget, levy help for public schools and several other key measures that allowed them to beat the midnight deadline that would bring their 2019 session to an end.
They negotiated and approved a $52.4 billion operating budget that will pay for most state programs, policies and salaries for the next two years. Just before midnight Sunday, they adjourned their 2019 session on time – the first time that has happened for a session in which a two-year operating budget was passed since 2009.
In a celebratory press conference afterward, Gov. Jay Inslee congratulated assembled Democrats for prioritizing education, making major changes to mental health, and addressing climate change
“I could not be more pleased,” Inslee said as he gathered with Democratic members of both chambers in his conference room after the session was gavelled to a close.
Legislators adopted a two-year operating budget on time for the first time since 2009. But to do that, they needed a complicated agreement that included several parts.
The lynchpin was a deal on the thorniest issue of the session, a change to the levy authority that local school districts have to collect property tax money to cover programs that are outside what the state pays for as “basic education.” School districts around the state are projecting budget shortfalls, and some, including the Spokane Public Schools, have sent out layoff notices.
The House and Senate had different strategies for addressing the levy problem. But in the end, they settled on a proposal from the Senate that allows district to increase the current levy cap of $1.50 per $1,000 of assessed valuation to $2.50 per $1,000, if voters approve. But the legislation also allows for higher amounts from another source of money known as local effort assistance.
House Republicans were prepared to delay a vote on the levy bill with a series of amendments. Late Sunday evening, they agreed to drop their amendments as part of the deal.
“They have the votes to pass this,” Rep. Drew Stokesbary, of Auburn, the ranking Republican on the House Appropriations Committee said. “We can be obstructionists and go into special session or be the responsible ones.”
In exchange, they got an addition to the levy bill that requires oversight to determine if local districts use money for their local levies for basic education expenses, such as salaries for teachers in those fields, and penalties for districts that do that.
“We’re extremely happy with the way the levy bill turned out,” Senate K-12 Education Committee Chairwoman. Lisa Wellman, D-Mercer Island.
Senate Majority Leader Andy Billig, D-Spokane, said it will allow “local voters to invest in education.”
Critics said, however, it leaves out charter schools, and the ability of some districts to pass higher levies eventually will lead to the kind of inequities around the state that will spark more lawsuits.
“Remember this day, because we’re going to have to follow up and fix this someday,” Sen. John Braun, R-Centralia, said before joining all Republicans in voting against the bill.
The deal also included passage of an exemption to the Public Records Act to keep from releasing the names and addresses of people who participated in the bump-stock buy back program. That issue surfaced in the closing weeks of the session, when two public records requests were made for all participants in the program that made payments to people who turned in the devices last month. The bill that was passed has a clause that makes it retroactive.
Earlier in the day, both chambers approved, and sent to Gov. Jay Inslee, a separate transportation budget of nearly $9.8 billion, with money for roads, highways, bridges and other infrastructure around the state. It includes money for continued work on the North Spokane Corridor, an electric trolley bus line between Browne’s Addition and Gonzaga University, replacement of the Trent Avenue bridge over the Spokane River, rehabilitation of the Palouse River and Coulee City railroad, improvements to the Barker Road and Harvard Road interchanges and connections to Interstate 90 and other projects.
While those negotiations on a levy solution were occurring, a midafternoon debate broke out in the Senate over one tax needed for the budget. Senate Republicans tried to block a newly proposed tax rate on large international financial institutions that would nearly double their business and occupation tax from 1.5% of gross receipts to 2.7%. They argued the banks are likely to sue and the state will wind up in court in a legal fight over the U.S. Constitution’s Commerce Clause.
The tax would raise an estimated $133 million over the next two years for the operating budget and $338 million over four years.
Senate Ways and Means Committee Chairwoman Christine Rolfes, D-Bainbridge Island, said she was surprised that opponents were siding with the 22 biggest banks in the world instead of trying to help citizens who face a high tax burden to pay for schools, colleges, health care and all the other things in the general operating budget.
“This is a small increase on the world’s most profitable companies,” she said. “If we’re not asking our biggest corporations to pay their way, who are we asking?”
Braun said the proposal had only been introduced Friday afternoon and was being rushed through the Legislature.
“This is a bill that has had virtually no vetting whatsoever,” he said. Along with the items Rolfes mentioned, the money was also going to help pay for a record salary increase for state employees that lawmakers had not had a chance to challenge.
After more than an hour of debate on Republican amendments to offer exemptions for interest on loans to farms, minority-, women- or veteran-owned businesses, first-time homeowners and affordable housing – all of which failed – the tax bill passed 26-23.
Earlier in the day, a broad plan to guarantee scholarships for low- to moderate-income students and tax businesses that rely on workers with college degrees received final passage.
The Washington College Grant would supplant the State Need Grant as the state’s largest scholarship program, guaranteeing full tuition and fees for those at or below 55 percent of the median family income – a family of four making $48,500 or less. Those between 56 and 100 percent median income would receive a prorated scholarship.
A quarter of eligible students in 2018, about 22,600, did not receive a scholarship under the State Need Grant because money ran out. The bill would reduce the wait list in the 2019-20 academic year and would eliminate it by 2020-21.
The approved bill also establishes a loan refinancing program, institutionalizes career-connected learning, and allows single-parent students to qualify for the state’s child care program.
To pay for the bill and other higher education priorities, the Legislature approved $393 million of new taxes in the next biennium from businesses that benefit from college graduates. About $163 million of that would go to the grant program.
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