OLYMPIA – Facing uncertainty over a possible economic downturn from the novel coronavirus and the need to fight the outbreak that has claimed more than two dozen lives in Washington, lawmakers significantly changed the budget plan they expect to pass Thursday.
The new supplemental operating budget would leave a cushion of $918 million in projected revenue unspent. That’s a significant change from a month ago, when budget proposals by the House and Senate had ending fund balances of less than $10 million. It has no new taxes.
“If the (projected) revenue is reduced, we have built in a buffer,” Senate Ways and Means Committee Chairwoman Christine Rolfes, D-Bainbridge Island, said.
Lawmakers also expect to tap the state’s reserve account, known as the “Rainy Day Fund,” for at least $100 million for state and local expenses related to the COVID-19 outbreak. That number could increase if legislators decide a higher amount is warranted before the scheduled adjournment of the session Thursday.
House Appropriations Chairman Timm Ormsby, D-Spokane, said the budget and economic outlooks changed dramatically in the last month. In February, legislators got an unexpectedly strong forecast from Steve Lerch, the state economist, who projected revenue from taxes and fees would be $1.5 billion ahead of the amount they were told last April when they passed a record $52.5 billion two-year budget.
House and Senate budget writers developed plans that spent much of that money, adding to programs for a wide range of areas, including homelessness, health care, forest health, environment and public schools. Shortly after those budgets received their initial votes, the state’s first death from COVID-19 was reported.
Lerch told the legislators the economic effects of the virus were uncertain.
The budgets passed by the House and Senate were “substantially obsolete,” Ormsby said. “This is a wake-up call.”
Legislators and staff began rewriting spending plans to make reductions in some areas and increases to control the outbreak, taking suggestions from minority Republicans as well as Democrats, he said. While the operating budget still would spend more money than the Legislature approved last year in key areas, it does scale back spending on other areas or delay some plans.
Even with the changes, total spending in the operating budget would go up by about $1 billion.
The negotiated budget proposal, which was made public Wednesday afternoon, adds about $235 million in programs to fight homelessness and increase affordable housing, which are priorities for public health and safety, Rolfes said.
“We still look at homelessness (programs) as investments tied to coronavirus,” she said. “We need to get people safe, or they will die.”
Sen. John Braun, of Centralia, the top Republican on the Ways and Means Committee, agreed that spending went down and minority members did have some influence on the final compromise. But Republicans still are disappointed with some aspects.
“This is a better budget than it could have been, but the spending is still too high and it misses the mark in areas that would most help our most vulnerable citizens,” Braun said in a prepared statement.
The proposal also adds money for rural health care and increases rates for family practice physicians treating people on state insurance plans. It adds $50 million to the paid family and medical leave program and $10 million to a program designed to get so-called “difficult to discharge” patients out of the hospital and into less expensive facilities.
The budget is expected to pass both chambers by Thursday. Senate Majority Leader Andy Billig, D-Spokane, predicted the Legislature, which often adjourns close to midnight on its final day, could be done before sunset “with goal of getting everybody out of here as soon as possible.”
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