Inslee: Tap state reserves to fight homelessness; delay North Spokane Corridor work until July

OLYMPIA – Washington should tap its rainy day fund for some $319 million to help fight homelessness in communities around the state, Gov. Jay Inslee said Wednesday.

With the 2020 legislative session set to start in less than a month, Inslee announced budget proposals that would make mostly modest adjustments to existing programs and call for no new taxes. It would delay some major transportation projects around the state, including six in the Spokane area, until July 1 to help cover the projected loss in taxes and fees from Initiative 976, and some smaller projects until sometime in the next two-year budget cycle.

The biggest change he’s proposing, however, is an effort to cut the number of people living in parks, along highway rights-of-way and in temporary camps around the state. Among the elements of the plan are the following:

• Increasing the number of shelter beds in the state to about 10,000, from the current number of 7,800, with competitive grants to cities, counties and local nonprofits.
• Enhancing current shelters by adding laundries, bathrooms and storage spaces.
• Providing housing assistance for an additional 1,080 people.

Washington has an estimated 9,500 people living without permanent shelter in communities across the state, based on the latest count. In some respects, it’s a “terrible irony” for a state that has one of the strongest economies in the nation, Inslee said.

But that economy also has spawned an influx of 100,000 new residents to the state, he said: “We can’t build housing stock fast enough.”

Unlike some previous years in which Inslee has proposed new or higher taxes to cover new programs, his 2020 plan asks the Legislature to tap the Budget Stabilization Account, also known as the rainy day fund, for the $319 million it is projected to cost over the next three years.

One catch: Taking money from that account requires a 60% super majority in both chambers.

Sen. John Braun, of Centralia, the top Republican on the Senate Ways and Means Committee, said it was good Inslee didn’t propose any new taxes but the emphasis on housing “seems to ignore government’s track record on addressing homelessness.” The extra spending comes at a time when there are concerns the current budget isn’t sustainable, he added.

Inslee also is not proposing any change in taxes to respond to the passage of I-976, which reduced renewal fees for annual license plate tabs by eliminating some fees and taxes. The change is being challenged in court, but if the initiative is upheld, it would reduce the state transportation budget by $454 million through June 2021.

Braun and other Republicans have proposed filling that gap by shifting some or all of the sales tax collected when vehicles are purchased from the state’s operating budget to the transportation budget. Inslee said Wednesday he opposes that because it would take money away from public schools, which make up a majority of the operating budget.

The state would soon find itself facing another court fight over its education spending, he said in a news release.

After I-976 passed, he ordered the Transportation Department to put new contracts on hold. In his supplemental transportation budget, he’s proposing contracts on the next phases of 26 major highway projects be delayed until July 1.

Among those projects are parts of the North Spokane Corridor, improvements at I-90 at Barker and Harvard roads and the Medical Lake interchange. He’s also proposing delays on building some trail, public transportation and rail projects.

The Legislature has the final say on how to spend money on projects in the session, and Inslee said it “is going to have to make some tough decisions here.”

House Appropriations Committee Chairman Timm Ormsby, D-Spokane, agreed the 2020 budget should be a simple update that focused on increases or decreases in demands for state programs and called Inslee’s plan to fight homelessness “creative thinking.”

“We might move some pieces around differently from the governor’s plan, but I suspect the bottom line will be very similar,” he said in a news release.

The state budgets on a two-year cycle, and the main spending plans for this biennium passed earlier this year. Without a major economic downturn or windfall, budgets in even-numbered years usually make adjustments to the existing plans.

A governor’s proposed budget is the beginning of a process that includes hearings and votes on separate budget proposals in the Senate and House, and a final compromise among the three spending plans.