We’re now entering the budget negotiation phase of the session. The Senate and House are in pretty significantly different places. The top level difference is only about a billion dollars, but the underlying differences are much greater than that. We need to come to agreement by Wednesday the 22nd to be able to get the mechanical part of the process completed if we’re to finish on the 26th, the 105th and final day of the regular session.
On Thursday the budget negotiation teams met with the Governor. This meeting happens every year and it’s an opportunity for the Governor to lay out what he expects in a budget. He has a lot of leverage over the process as he can veto individual parts of the budget he doesn’t like or, if he really doesn’t like the product can veto the entire thing, sending us back to work. This doesn’t happen very often, but is definitely part of the process. There are ALWAYS vetoes of individual line items in the budget.
The Senate Republicans were somewhat disgruntled by Governor Inslee’s comments, though I thought they were pretty reasonable. He laid out a pretty simple list of things he wants:
- Fund at least $1.3 billion in K12 McCleary funding. Both budgets comply with HB 2776, though I am concerned about aspects of how the Senate delays implementation of class size increases, pushing a lot of increases off to the next biennium.
- Fully fund the collective bargaining agreements. The House does this, the Senate does not. We are a few hundred million apart.
- Fully fund Initiative 732 increases for school employees, including the extra that gets them to the same level of increase that state employees get. The House does this, the Senate does not.
He also laid out a set of things he doesn’t want to see. These also seem reasonable to me:
- “Lean” cuts, or other unspecified cuts. These are often described as “across-the-board” or “efficiency” assumptions. Mostly they are BS – assumptions that magic will occur and money will be saved without any impact on services. When the magic assumption doesn’t come true there isn’t enough money to do the work the agency is supposed to do, and it looks like the Governor is badly managing the system or making cuts, not like the budget was inadequate.
- No dependence on bond funding for the operating budget. This is buying groceries on your home mortgage.
- No tax cuts until all these requirements are met.
Seattle Times: GOP bristles at Inslee stand on taxes, state pay
Here’s the talking points the Governor used in the meeting.
My comments in the Times article:
“He was calm. He was reasonable. He made a limited set of points,” said Rep. Ross Hunter, D-Medina, who chairs the House Appropriations Committee. “He’s got to actually administer the system after we leave town. He wants a budget that won’t cause crazy disasters to happen on his watch.”
We sit down to see how we can create a framework on Monday. We would have met last week, but Sen. Hill had food poisoning and missed Thursday and Friday. This sounds awful at this time of the year. (Anytime actually, but the negotiations are pretty intense and time consuming.)
The first thing the Legislature did this year was pass HB 1105, an early supplemental budget that fixed some of the legal problems we have on mental health, and some of the staffing problems directly caused by “lean” cuts in the Children’s Administration.
My conclusion: the Senate Republicans are upset that if these requirements are met it’s hard to imagine how one would write a budget that doesn’t require new revenue. This has been where I’ve been for a long time. Other people have more recently come to the same conclusion, including the Seattle Times editorial board.
If some new revenue is needed — and that appears to be the case — the Legislature should vet a capital-gains tax proposal offered by the House Democrats. It is more conservative than Gov. Jay Inslee’s proposal, hitting relatively few wealthy households, while accounting for the volatility of capital gains with a dedicated fund that would fill in go-go years and could be drawn down in slowdowns.
Seattle Times Editorial: How to get closer to solving state’s budget mess
We’ll see where all this goes – we have much work to do to come to agreement. My closing comment in the Times article on the budget was that I hoped we would finish early as I’m not fond of living in Olympia.