Legislature Passes State Operating Budget

The Legislature passed a 2019-21 operating budget plan and revenue plan on Sunday, making critical investments in behavioral health, affordable housing, education, and the environment. We have reports from both sides of the aisle.

Dan Frizzell from the Washington State House Democratic Caucus has more on the balanced budget that makes progress on some of the state’s thorniest problems.

John Sattgast has reaction from Washington State House Republicans:

Highlights of the $52.4 billion two-year operating budget include:

Behavioral Health: The two-year budget will make significant investments in continued efforts to reform and improve the state behavioral health system.

  • $47 million to expand community behavioral health beds and services.
  • $92 million in this biennium to ensure the stability of state hospitals and the safety of patients and staff.
  • $74 million in this biennium to comply with the Trueblood court ruling.

Affordable Housing: In addition to the state capital budget, the state operating budget makes key investments in housing programs and services.

  • $15 million focused on permanent supportive housing and youth homelessness.
  • $14.5 million for the Housing and Essential Needs Program, which helps people with disabilities who are struggling to find or maintain housing.

Education: This budget fulfills the bipartisan promise made by the Legislature to fund health care coverage for school employees through the School Employee Benefits Board (SEBB) program. This investment will cost $328 million in this budget and $837 million over four years.

  • $155 million for additional special education funding ($294 million over four years).
  • $61 million for additional levy assistance for areas with low property values.
  • $12 million for paraeducator training.
  • $2.5 million additional funding for student mental health and safety.

Workforce Education InvestmentCreates a new Washington College Grant to make public college tuition-free in Washington state for families earning less than $50,000 per year, with partial scholarships for families up to state’s median income, and significantly invests in community colleges.

It addresses demand through targeted investments by bringing together students, parents, higher education institutions, workers, and businesses. To pay for the investments, the Legislature increased B&O rates on businesses that rely on a highly-educated workforce.

  • Expands access to the Washington College Grant (formerly the State Need Grant).
  • Makes career pathways a priority by expanding programs that guide students through community and technical colleges or apprenticeships and increases counseling.
  • Increases capacity at the public community and technical colleges and four-year institutions for high-demand programs, such as computer science, engineering, nursing, and other high-demand fields.

Other investments:

  • $35 million to expand Early Childhood Education and Assistance Program (ECEAP) slots and rate increases.
  • $62 million for rate increases for community residential services providers (long-term and developmental disabilities care).
  • $31 million to improve habitat and protect Orcas.
  • $9 million to eliminate the backlog in testing sexual assault kits.
  • $24 million in state general funds to increase our wildfire response and address natural disasters.
  • $4.5 million to expand rural broadband.

While the state economy has resulted in additional revenue over the current two-year budget, existing expenses have outpaced that revenue growth. The state faces an additional $5.8 billion in expenses over the last two-year budget, most of which ($3.9 billion) comes from the bipartisan education funding agreement reached in 2017.

The state’s revenue growth over that same time was $4.5 billion. Therefore new revenue was needed to make critical investments in behavioral health, housing, higher education, and the environment.

Revenue is added by changing the Real Estate Excise Tax (REET) rates for property sales over $1.5 million. Washington’s current REET rate is a flat rate regardless of the value of the transaction.

The Progressive Real Estate Excise Tax proposal would result in more than 80% of real estate sellers receiving a tax cut while another 18% would see no change in the rate. The remaining sellers, those selling real estate valued at $1.5 million or higher, would see a rate increase. The budget includes a business and occupations tax increase on the very largest and most profitable global banks. Other revenue includes an increase in the B&O rate for firms that provide international investments services