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Dear Friends and Neighbors,
We are now in the second special session of this year. Our legislative work, mainly the state operating budget, continues. Like you, I am frustrated with the lack of progress on a state spending plan, but I remain hopeful that all parties are working in good-faith to come to a middle ground.
Below is a brief update on what has transpired with the various budget proposals and where we are now. One element that may help move the negotiations forward is the revenue and caseloads forecasts show a positive uptick in available revenue of $320 million. This is on top of the additional $2 billion in tax collections the state is expecting to take in over the 2013-15 budget cycle.
I hope this information is helpful as you follow the debate on the budget in Olympia. As always, please feel free to contact me with questions and ideas.
The state revenue forecast
The Washington State Economic and Revenue Forecast Council (ERFC) released its quarterly revenue forecast for the current and upcoming budget cycles June 18. The news is good and shows our economy is moving in the right direction, but we are still in a fragile recovery.
The council is projecting a $110 million increase in revenue for 2011-13, a $121 million increase for 2013-15, and a $51 million increase for 2015-17. As we work toward a budget agreement, this forecast shows state lawmakers will have an additional $231 million in revenue. Caseload reductions in corrections, schools and other programs saved another $90 million, for a total of roughly $320 million.
The reasons we are in a second special session boils down to this stalemate: Democrats and the governor want to increase taxes to balance their spending plans, and the bipartisan Senate Majority Coalition Caucus wants a fund-education-first budget approach that balances and prioritizes spending within current tax collections. There is a great article in the Washington State Wire that explains where the budget debate is now, which you can read here.
Here are the forecasted tax collections as were relayed to us by the ERFC:
- $30.646 billion for the 2011-13 biennium (ends June 30);
- $32.662 billion for the 2013-15 biennium; and
- $35.357 billion for the 2015-17 biennium.
With tax collections growing substantially over the next budget cycle, I believe we could have completed our budget work in the regular session. However, now that the Senate coalition has moved closer to the middle by dropping the reform bills, my hope is compromise from the governor and House Democrats will also take place soon.
The status of the state operating budget
The last two weeks have been more active than the beginning of the first special session. Tuesday, June 11 was the final day of the first 30-day special session called by the governor. On June 12, the governor called us back immediately for a second special session in order to wrap up our work by June 30.
By way of history, House Democrats introduced their revised budget proposal Wednesday, June 5. You can read more about their budget proposal here and their amended tax package here. I voted against the proposal because:
- it funds education last and holds our children hostage to tax increases;
- makes changes to apportionment payments to schools that could create financial hardships; and
- drains the Public Works Assistance Account that local governments rely on for infrastructure projects that help with economic development and puts those funds in the general operating budget.
The Senate Majority Coalition Caucus introduced its own compromise and passed it over to the House for consideration. Read more about their proposal here. By no means is the Senate budget perfect, but it is closer to what I believe Washingtonians want – it funds education, including the McCleary enhancements, prioritizes public safety and services for the most vulnerable and would lower state college tuition by 3 percent – meaning for the first time since 1986, college students would not see a tuition hike.
I believe we can find common ground on spending. In this economy, no lawmaker should be advocating for new and higher taxes. We still have many people out of work, underemployed or living with the fear that one more hit to their employer will cost them their job. New and higher taxes on struggling residents is the wrong direction for this state.
I believe we have all the tax money we need to fund our priorities and that a compromise can be reached soon.
Sincerely,
Mark Hargrove
