Inslee’s housing referendum faces pushback from lawmakers as budgets are released

OLYMPIA – Democratic Gov. Jay Inslee’s proposal to ask voters to borrow $4 billion to address the state’s housing crisis is getting pushback from Democrats in the state Senate who crafted an alternative bipartisan plan.

A $7.9 billion capital budget proposal released Monday by Senate Democrats and approved unanimously for the full Senate on Friday does not include Inslee’s plan to send a referendum to voters to allow the state to borrow $4 billion to quickly build more housing.

Inslee said in a statement the Senate’s proposal would take the state backward on housing. He said the proposal spends less on housing than in previous years, though he acknowledged much of the boost in recent years has come from federal funds.

“In the middle of a housing crisis, less is unacceptable,” he said.

Every two years, the state Legislature must pass a capital budget, which funds infrastructure and construction projects across the state. The state Senate’s $7.9 billion budget proposal focuses its funds on affordable housing, school construction and environmental protection projects.

The Senate on Friday passed its capital budget proposal unanimously.

The state House of Representatives will release its capital budget proposal in the next week or so, and the two chambers will have to consolidate their proposals into one before the end of the legislative session April 23.

Senate Majority Leader Andy Billig, D-Spokane, said he was “really disappointed” in Inslee’s response to their budget proposal. He said it was not in any way productive.

“We all have the same goal, which is to build more housing,” Billig said. “We hope the governor will be collaborative to bring home the final budget.”

Democratic capital budget writers said the governor’s proposal could lead to more problems than solutions in the budget. Ways and Means Committee Vice Chair Sen. Mark Mullet, D-Issaquah, told reporters Monday that Inslee’s plan would have added $2.4 billion in interest payments, which is money that could go toward other projects, such as building more housing.

“The governor’s referendum was creating a lot of other unintended consequences on the overall budget,” Mullet said.

Inslee told reporters Thursday the rate of borrowing in his proposal is not abnormal for Washington.

The Senate proposal invests $625 million in affordable housing projects, including $400 million in the state’s Housing Trust Fund, which provides loans or grants to build affordable housing across the state. It also includes funding for housing projects near transit, to incentivize landlords to rent to people with housing assistance and for infrastructure to connect affordable housing developments.

Sen. Yasmin Trudeau, D-Tacoma, said lawmakers will continue to grapple with how to invest more in housing, but this proposal is going further than past ones have.

“For purposes of the capital budget, we did everything we could do within our constitutional debt limit,” Trudeau said.

The Senate capital budget proposal has bipartisan support. Senate Minority Leader John Braun, R-Centralia, said the investments in housing focus on the state’s biggest needs and do so in a responsible way that the state can afford.

Braun also praised the budget for its investments in K-12 and higher education.

The proposal provides $894 million for K-12 education across the state, with more than half of that going to help schools with construction costs needed when a district is unable to pass a bond.

Inslee told reporters on Thursday that the Senate’s plan was a “good start to the discussion” and he was looking forward to the House’s proposal on Monday.

He would not say whether he would refuse to sign a capital budget without large investments like he requested. Failing to pass a capital budget by the end of session could result in an extended special session.

“It’s too early to be talking in those terms,” Inlsee said.

He said he would be open to other ways to finance more housing, but that he is asking the Legislature to “dig deep” to make significant investments in housing this year.