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Inslee unveils ‘unusually large’ $62 billion supplemental budget proposal

Washington Gov. Jay Inslee and Democratic leaders in the Legislature announced on Friday they would delay implementation of a long-term care tax until lawmakers can make revisions to the program.  (Ted S. Warren/The Associated Press)
Washington Gov. Jay Inslee and Democratic leaders in the Legislature announced on Friday they would delay implementation of a long-term care tax until lawmakers can make revisions to the program. (Ted S. Warren/The Associated Press)

OLYMPIA – Gov. Jay Inslee unveiled an “unusually large” budget proposal of almost $62 billion Thursday that would continue focus on helping the state recover from the COVID-19 pandemic.

Aided by a boost in state revenue and unspent federal pandemic relief funds, the supplemental budget invests new money into housing, climate change, salmon recovery and transportation. Supplemental budgets are approved in the middle of the two-year budget cycle to adjust the plan passed by the Legislature the previous year. This year’s budget is an adjustment to the $59 billion budget approved by the Legislature last April.

“We have to be big, and we have to be bold this year,” Inslee said. “Our state is faced with multiple crises, and we have to respond.”

Inslee’s plan uses the additional revenues plus federal COVID-19 relief funds to make new investments across the state. There are no new taxes proposed, and no tax breaks proposed.

In the budget approved last session, the Legislature left about $1 billion in federal funds to be used at a later date. The governor’s new budget plan includes spending the remaining funds on rental assistance and housing, transportation, public health, food assistance and child care.

Reduced enrollment and caseloads in K-12 education statewide left the state with about $900 million in savings. Most of that would be reinvested back into education to help with students’ social, emotional and academic needs. That would mean increasing the number of school nurses, social workers, counselors and additional extracurricular activities.

Larry Delaney, president of the Washington Education Association, said in a statement the additional funding for nurses, social workers and counselors is “critical to our students’ success.”

Delaney said the proposal fails to address another crisis in schools: recruitment and retention of staff.

“Ensuring that compensation can keep pace with rising costs is one small way to show appreciation for our educators and recognize their extraordinary efforts to meet increasing student needs during this pandemic,” Delaney said. “We must invest in our educators to ensure each of our students’ needs can be met.”

The savings, projected revenue increase and the federal money mean this supplemental budget is larger than normal, said David Schumacher, director of the Office of Financial Management.

“We have a considerable amount of one-time money, and we have some pressing needs,” Schumacher told reporters.

The budget would put $600 million back into the state’s “rainy day fund,” leaving the state with $2.5 billion in reserves at the end of this budget cycle in 2023.

House budget lead Rep. Timm Ormsby, D-Spokane, said the governor’s proposal built on much of the Legislature’s budget from last year.

“The impacts of COVID-19 and recovery have not been spread evenly and this year’s supplemental budget needs to be inclusive of all communities who are struggling,” Ormsby said in a statement. “The governor’s proposal lays a foundation for us to remain fiscally sound but focused on tackling the problems of today.”

The lack of tax breaks in the proposal was a point of controversy.

David Schumacher, director of the Office of Financial Management, said tax breaks could put future budgets “in peril” as many of the federal funds being used in this proposal are one-time. He said one-time stimulus checks for residents are also difficult because the state doesn’t tax every single person with an income tax, making it logistically difficult and expensive to get those checks out.

Republican budget leads criticized Inslee’s decision not to include a tax break in his proposal.

Sen. Lynda Wilson, R-Vancouver called Inslee’s refusal to include tax relief “inexcusable.”

“The state treasury is on track to be billions of dollars ahead, yet the governor doesn’t have the heart to propose significant, direct tax relief for a single resident of our state,” Wilson said in a statement. “It’s as though he has no respect for the taxpayers.”

Rep. Drew Stokesbary, R-Auburn, said Inslee’s approaches have yet to make “serious progress” in the state.

“At a time when the state is overwhelmed with cash, it is disappointing, though not surprising, to see that the governor’s budget proposal does not include any tax relief for the families who have struggled through the pandemic and who are now experiencing the highest rate of inflation since 1982,” Stokesbary said in a statement.

Inslee said he couldn’t say Thursday whether he would support a sales tax cut if the Legislature passed it. If the state got additional revenue, it would “certainly be of interest,” he said.

Instead, the current federal funds and additional revenue should go toward helping the state’s current “crises,” such as homelessness and climate change, Inslee said.

Inslee unveiled policy proposals from his plan throughout the week. His $626.5 million climate plan includes a clean building standard and rebates for customers who purchase electric cars . He proposes spending $187 million for salmon recovery, including a continued mitigation study of the lower Snake River dams. He also proposes spending $800 million on a package of proposals to fight the state’s homelessness crisis, including building additional supportive housing and bolstering behavioral health services.

The governor’s proposed budget also includes a plan to address Washington’s nursing shortage. The Washington State Hospital Association recently found there are more than 6,000 open nursing positions across the state.

It would invest $6 million to fund grants for nurses willing to train students and $8 million to support grants for low-income students wanting to become nurses. Additionally, it would spend more than $3 million to create a pilot program that would improve the work environment in long-term care facilities.

Inslee said people look at supplemental budget years as “quiet months in Olympia.”

“It can’t be quiet months in Olympia this year,” he said.

The Legislature must still give approval on any budget and policy proposals. Their 60-day session begins in Jan. 10.

Laurel Demkovich's reporting for The Spokesman-Review is funded in part by Report for America and by members of the Spokane community. This story can be republished by other organizations for free under a Creative Commons license. For more information on this, please contact our newspaper’s managing editor.

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