Early learning, K-12 take biggest blows in state budget agreement that overall boosts spending

OLYMPIA – From preschool to K-12, education took the biggest hit after Washington lawmakers unveiled a budget agreement on Wednesday with the largest cuts concentrated in early learning and public schools.

The budget agreement calls on the state to use nearly $1 billion from its rainy day fund while cutting funding for child care, K-12 education and other state services.

Despite cuts, the agreement includes a $1.7 billion uptick in spending from $77.9 billion to $80.2 billion in the biennial budget that runs through June 2027. The the state also increased spending by an additional $621 million through other policy changes.

The budget taps $880 million from the state rainy day fund and a net $36 million tax increase. The plan also proposes spending $55.4 million through June 2027 to implement the new income tax on millionaires passed by the Legislature. The budget assumes $2.3 billion in revenue from the tax, which is applicable on income above $1 million, were it to take effect in the next budget cycle.

The plan also repeals special tax exemptions for drug wholesalers and data centers, which would bring in more than $100 million in the current budget cycle. Gov. Bob Ferguson included the idea in the budget proposal he released in December.

Democratic lawmakers say the deal, which was negotiated between the House and Senate for more than a week, was particularly challenging to reach given recent cuts in federal funding to Washington. State Rep. Timm Ormsby, D-Spokane, chair of the appropriations committee, said Wednesday the deal “is not everything that we wanted.”

“It’s not perfect. We knew that coming in and knew that there would be disappointment in the reductions that we had to make,” Ormsby said. “But we have preserved and protected the core functions of state government.”

However, as the state budget continues to grow, Republican budget writers argue that the difficult budget situation was self-inflicted, with spending outpacing the revenue the state collects. State Rep. Travis Couture, a Republican from Allyn who serves as ranking member on appropriations, said his party was largely absent from deal-making.

“Had my side of the aisle been in the room, with the 3 million people-plus we represent, maybe we could have come up with something, maybe a little bit better,” Couture said. “May not have still supported it, but I think we could have done a better job there.”

State lawmakers in both chambers will vote on the budget Thursday as the legislators prepare to conclude this year’s session. Gov. Bob Ferguson will then have a little more than three weeks to decide if he wants to sign the plan into law.

The largest cuts come to child care, particularly surrounding a program that subsidizes child care for families earning below 60% of the state’s median income. It served 44,000 families across the state, as of last February.

The negotiated proposal announced Wednesday aims to restructure how providers are reimbursed for enrolling kids qualifying for the program, which is state and federally funded, for a total savings of $781 million to the state over the next two years.

As it stands, providers are reimbursed for a full month of care if a qualifying student attends day care for at least one day during that month. Spokane County providers are reimbursed $49 to $68 per student per day, depending on the kid’s age.

Rather than the guarantee of a full month of funding, providers would be paid based on how many days that student attends. If a qualifying kid attends between one and eight days of child care, the provider is reimbursed for 11 days. Between nine and 15 days attendance would bring in 15 days’ worth of pay for providers. Over 15 days, the center receives reimbursement for the full month.

“We’re just trying to make it easier to administrate for the Department of Children, Youth and Families,” Ormsby said.

“And for the providers,” added Sen. June Robinson, D-Everett.

The largest cuts to the budget, this reduction would save the state an estimated $606 million over the next four years, with proposals to end previously planned expansions to the program saving another $175 million over that time. These figures are a compromise, budget negotiators said, with larger cuts than what the House proposed and smaller than the Senate’s proposal.

Reached on Wednesday after she looked over the freshly released proposal, Lilac City Early Learning Center owner Colleen Condon said she was not yet sure how the cuts could affect her business and the families she served. She said she would have to look at eliminating her 401K plan for her staff and cut a couple positions meant to bring behavioral support to her center.

“We’re going to have some hard budget conversations for sure going into this next fiscal year,” she said.

She said most of her students attend at least 15 days in a month, but with the attendance conditions to funding, she is concerned she would have to disenroll families who need childcare the most.

“I’m not going to be able to give them a grace period of a month or two when their attendance is low,” she said. “I’m going to have to cut off service for them.”

Sometimes families will miss long periods of day care if they’re fleeing domestic violence or navigating homelessness, she said. Recently, one of her students was absent for a spell because their family could not afford the gas to take them to day care.

While she empathizes with the realities of her families, she fears cuts to reimbursement would force her to disenroll kids in these circumstances.

“Those are the real-life choices the family had to make, and as a provider, I’m no longer able to meet them where they’re at,” she said.

The state’s K-12 education is also facing cuts of around $110 million over the next four years, though the proposal to offer school breakfast and lunches at no cost to all students adds $140 million in spending in that time, paid for through the proposed millionaire’s tax.

Cuts would be concentrated in the transition to kindergarten program, which the state authority on public schools lauded as highly successful for its over 7,000 enrollees as cuts were floated earlier this session. A $102 million, 4-year reduction could cut those slots by a third.

Smaller K-12 cuts include reducing how much districts are reimbursed for buying school buses and money for running start programs. These areas are cut by $77 million and $14 million over four years, respectively.

Local effort assistance, a program that subsidizes school districts without much property value to tax from, would also see reductions as the proposal ends planned expansions on how much districts could collect per student. The proposal would roll back $45 million for schools over four years.

President of the Washington Education Association Larry Delany said the deep cuts to children’s learning across the board only exacerbate issues of rising costs and consistent “underfunding” from the state.

“We must fully fund our students’ PK-12 and higher education. Right now, we’re on the opposite path,” he said in a statement. “The state’s cuts paired with its failure to keep pace with increasing costs is putting our students’ and our state’s future in jeopardy.”