Legislature acts on budget in nick of time

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The Capitol Dome

State college students will see tuition decreases over the next two years, but not as much as the Washington Senate Republicans originally wanted.

The tuition plan and other details of the state government’s main 2015-2017 budget were released at 3:30 p.m. Monday — little more than 32 hours before Gov. Jay Inslee’s signature is needed on it to prevent a partial government shutdown on Wednesday.

On Monday evening, the Senate passed the proposed budget 38-10, with the 10 nay votes coming from Puget Sound area Democrats. The House passed the budget 90-8 with one Democrat and seven Eastern Washington conservative Republicans opposing it.

Meanwhile, the Legislature still has not agreed on how to deal with Initiative 1351, which would cost an extra $2 billion to reduce student-teacher ratios in 2015-2017. However, legislators say they expect to have a bill passed by Tuesday afternoon, with the constitutionally required two-thirds support in both the House and Senate for changes to the initiative. A resolution to the I-1351 is critical to producing a budget.

Last fall, Washington’s voters passed I-1351, which added smaller class sizes in Grades 4-12 on top of the Supreme Court's 2102 call to improve teacher-student ratios in Grades K-3. The $2 billion needed per biennium to implement I-1351 are not in the state’s coffers. Democrats and Republicans agree on keeping I-1351's requirements out of the 2015-2017 budget. “Everyone knows we can’t fund it,” said Sen. Andy Hill, R-Redmond.

The two most likely options for the Senate and House are to delay implementing I-1351 or nullify it completely.

In broad strokes, this is a $38.2 billion budget with another $1.4 billion in reserve. It will trim state college tuition rates, spend $1.3 billion to meet the biennial requirements of a 2012 Washington Supreme Court ruling to improve teacher-student ratios in Grades K-3, and assumes the Legislature will find a way to delay or eliminate the I-1351's obligations. It also adds some tax exemptions and closes some other tax breaks for a net gain in revenue.

On tuition, the Senate GOP originally wanted a 25 percent across-the-board cut at the state’s universities and community colleges. Democrats objected to the $354 biennial price tag.

Legislators discuss the budget compromise in this Seattle Top Story video

Ultimately, the compromise’s cuts are 5 percent across-the-board in 2015-2016. In two years, the University of Washington and Washington State University’s cuts would grow to a cumulative 15 percent. At the same time, the cumulative tuition cuts at Evergreen State College, Western Washington University, Central Washington University and Eastern Washington University would grow to a cumulative 20 percent. The community colleges would not see further cuts.

The projected cost of the compromise set of tuition cuts was not available Monday.

These are the first tuition cuts in state history, said Sen. Hill, one of the Senate’s GOP budget negotiators.

Possible Supreme Court punishments over education funding and a complicated bill on property taxes for schools hang over the final compromise.

The Supreme Court has threatened yet-to-be-determined sanctions against the Legislature if it does not show enough progress by this summer in complying with a 2012 decision requiring better funding for public schools. One question is whether the $1.3 billion appropriated for the teacher-student-ratio reduction in 2015-2017 will be enough in the court’s eyes. A second question is whether the state can put in a system to pay for the increased numbers of teachers and classrooms to comply with the 2012 ruling on a permanent basis.

Two Republican and two Democratic senators introduced a bill earlier this month to tackle long-term school funding changes, with the idea that the Supreme Court wants this issue addressed.

In broad strokes, that bill would start a four-year, $3.5 billion shift in 2018 from local school districts’ tab for paying for basic education — mostly teachers’ basic salaries — to the responsibility of the state government. That is meant to end the inequity of richer school districts spending more for teachers and smaller class sizes than poorer districts can. That bill is expected to go through several months of modifications before it is seriously tackled in the 2016 legislative session.

That $3.5 billion cost estimate, much of it to pay for the shift-in-property taxes-bill with Sen. Bruce Dammeier, R-Puyallup, as the main sponsor, will lead to a need to raise significant amounts of new revenue in the future, said Rep. Ross Hunter, D-Medina and a House Democrat budget negotiator. Hunter speculated that a proposed capital gains tax — which Senate Republicans killed this year — is a likely candidate to surface again in 2016 to help Dammeier’s bipartisan bill.

More immediately, the budget agreement unveiled Monday included a long-delayed cost-of-living increase for state teachers, something Democrats had sought. Plus, it allocated another $150 million for teachers’ raises over the next two years. The idea is that Dammeier’s bill will assume responsibility for teachers’ pay and raises beyond these two years, Hill said.

Another issue that split Democrats and Republicans until a few days ago was tax breaks. Ultimately, the Republicans agreed to let Democrats close $452 million worth of tax breaks over four year, in return for the Democrats letting Republicans extend or create $101 million worth of tax breaks for the same four years.

That translates to $150 million in extra revenue in 2015-2017, and an extra $201 million in 2017-2019.

Republicans successfully stopped the Democrats in their latest attempt to close three tax breaks. These were a sales tax exemption on bottled water, a sales tax exemption for people who don’t reside in Washington, and a fuel recycling tax exemption designed for sawmills that was later assumed by Washington’s five oil refineries.

The Legislature is closing tax breaks "that do not have five lobbyists six rows deep each defending them,” said Rep. Reuven Carlyle, D-Seattle and another House Democratic budget negotiator.

Carlyle and Hunter also voiced concerns about the budget's reliance on what they believe are too optimistic projections for marijuana tax revenue.

  

About the Authors & Contributors

John Stang

John Stang is a freelance writer who often covers state government. He can be followed on Twitter: @johnstang_8