Governor Inslee released his operating budget proposal today, which included $1.26 billion in new spending for K-12 education. "I feel deeply that my number one priority is to help rebuild our economy, get people working again and take important steps toward building a workforce for the future," Inslee said. "And that begins with education."
House Democratic leaders agree.
Said House Speaker Frank Chopp: “Taking meaningful steps toward better-funding of our public schools is a top priority, and many of our members have long argued for giving tax breaks serious scrutiny. So we are heartened to see the governor call for closing some tax loopholes to fund the education of our kids."
Appropriations Chair Ross Hunter added: “Governor Inslee’s proposal focuses on funding education and responsible budgeting – these are the right priorities for Washington."
And House Finance Committee Chair Reuven Carlyle said: "We strongly agree that fully funding public education is a higher priority than continuing tax exemptions that may not provide a reasonable return on investment for the future of our state.”
TheFall 2011 Fiscal Survey of States
shows overall general fund spending by state legislatures are still at
pre-recession levels. While revenues have declined, demand for core government
services like education, transportation, and public safety continues to
increase putting states in a difficult position.
Washington is feeling the pinch too. Despite cutting over $10.5
billion from the state’s general fund budget in the
past three years, we are facing another $2 billion budget deficit.
The governor laid out two different plans to address the
budget shortfall – an all-cuts budget and analternative plan
that would “buy back” some of the cuts with a temporary sales tax increase. The
new revenue would restore about $411 million in cuts to education, $42 million
for long-term care and developmentally disabled services, and $41 million in
public safety.
The Legislature held public work sessions this week to
discuss the governor’s proposals.
In the past two days, Governor Gregoire has outlined several major proposals to restructure and rethink some of the services our state provides.
At yesterday's press conference, she outlined major pension and health care reforms that will save tens of billions of dollars over the next 25 years.
By eliminating the automatic pension increases paid to TRS 1 and PERS 1 employees, Gregoire says the state would immediately cut its unfunded liability in half and save $2 billion over the next two biennia. She proposes other changes such as eliminating the no-penalty provision for future new hires and closing the retire-rehire exception for certain retirees in higher education. In total, Gregoire's pension plan would save $11.3 billion over 25 years. (Note: Rep. Reuven Carlyle introduced a bill yesterday that would also address some of the retire-rehire issues in higher ed.)
Her health care proposal aims to save $26 billion over the next ten years by focusing on reducing health care cost inflation to no more than 5 percent per year, paying for Medicaid and other health care services based on outcome instead of number of office visits, and better leveraging the state's purchasing power by consolidating health care purchases into a single agency.
In today's press conference, Gregoire suggested major agency consolidation plans that she says will reduce overhead costs and minimize duplication across agencies. She anticipates savings of about $30 million in the next biennium and a reduction of 125 employees. She wants to:
Consolidate the state's 11 natural resource agencies into five
Merge the Departments of General Administration, Personnel, Printing, and portions of the Department of Information Services and the Office of Financial Management merge into a new Department of Enterprise Services (Gregoire alluded to more details in January about other broad changes regarding DIS's IT management)
Consolidate the state’s Human Rights Commission, Office of Minority and Women’s Business Enterprise, Commission on African Affairs, Commission on Hispanic Affairs and Commission on Asian Pacific American Affairs into a single Office of Civil Rights
Eliminate 36 more boards and commissions (dozens were already eliminated last session)
See whether anything comes of discussions between the Department of Corrections and the Washington Association of Sheriffs and Police Chiefs about short- and long-term strategies to maximize each correctional systems’ (state and local) strengths and integrate certain services
The Governor will release her budget proposal tomorrow. Her budget is expected to reflect savings from these proposals.
For more information, you can see yesterday's press conference on the Governor's pension and health care reform ideas here.
More than 450 people crowded the room UW-Tacoma to hear presentations from the Governor's budget guy, Marty Brown, the Governor herself, and staff from the Office of Financial Management.
Attendees were given a 10-page overview describing our budget situation and the six "values" driving budget decisions: student achievement, protect health and vulnerable people, economic development, effective government, public safety, and natural resources.
About 40 people were able to testify of the 140 who had signed up. Many of the comments were pleas to continue funding for various programs, though some people offered up ideas on how to address the budget shortfall. Suggestions included:
Take away the $5 million tax exemption for the TransAlta coal plant and make more progress on climate change
Close down state institutions for people with developmental disabilities and put resources in community
Set up a state bank like in North Dakota
Re-negotiate state employee collective bargaining contract and cut salaries
Set up waiver programs and low-interest repayment plans for businesses that can’t afford to pay state taxes
The Governor has also set up a website where the public can post comments. It went up yesterday, and as this blog post is being written, there are nearly 400 suggestions. You can take a look and vote to agree or disagree or comment on the ideas posted.
You can also take a look at this morning’s News Tribune story about last night’s hearing .
Three public meetings remain:
Tomorrow, July 21 at 7 p.m. – Everett (Everett Community College, Parks Building, Multi Purpose Room, 2000 Tower Street)
Tuesday, July 27 at 7 p.m. —Vancouver (WSU-Vancouver, Administration Building Room 110, 14204 NE Salmon Creek Avenue)
Thursday, July 29 with time TBA—Spokane (Spokane City Hall, City Council Chambers, 808 W. Spokane Falls Boulevard)
At 10:30 the Governor will announce a new budgeting process for the 2011-13 budget that expands further on the current Priorities of Government process (POG).
We'll provide an update after Gregoire's press conference.
No more Basic Health. No more maternity services. No more levy equalization. No more prescription drug assistance for low-income seniors. No more GAU.
Those were just a sample of the cuts Gregoire laid out in her press conference that ended just moments ago. In presenting her budget she said, "Let me be very clear: I do not support this budget. As required by law, it is balanced. For me, it is unjust.”
This budget is called "Book I" by insiders, as it is considered the first budget, required to be balanced with no new revenue.
Here's a breakdown of how Gregoire proposes to bridge the $2.6 billion shortfall without new revenue.
Use of $904 million from "other" revenue - This includes $229 million from the Budget Stabilization Account (Rainy Day Fund), $110 million from the Savings Incentive/Education Savings Accounts (funds agencies didn’t spend in the previous year), $52 million from PEBB Reserve (state health benefits) and lowering the Ending Fund Balance to $310.5 million.
$1.7 billion in program cuts:
K-12 - $375 million including the elimination of levy equalization funding, all-day kindergarten, I-728 (classroom size initiative) and K-4 staffing enhancements.
Higher Education - $370 million including reducing the State Need Grant, across-the-board reductions, and suspending the Work Study program and eliminating other smaller financial aid programs.
Other Education - $13.8 million including eliminating ECEAP (early learning) for 3- year-olds, eliminating the Career and Wage Ladder, and reducing funding for the Arts Commission.
Health and Human Services - $850 million including eliminating the Basic Health Plan and the General Assistance program, suspending Maternity Support Services, and reducing Apple Health Eligibility to less than 205% of Federal Poverty.
Natural Resources - $25 million including eliminating funding for watershed planning, reducing funding for water resource activities, and reducing Fair Funding.
General Government - $41 million including reductions in growth management grants, state library services, and the Crime Victims Benefits program.
FTEs: Decrease state employees by an additional 1,500 FTEs. From Fiscal Year 2009 (last year of the prior biennium) through Fiscal Year 2011 (second year of this biennium), it is anticipated that state FTEs will decrease by 4,500.
Mandatory Spending: This budget spends an additional $760 million for caseload increases and other mandatory costs like forest fires, increased utilization of medical services, etc.
Additional Spending: There is about $86.5 million in additional spending in the budget that is not related to mandatory increases. It includes restoring $12 million for Juvenile Rehabilitation, $11.5 million for worker retraining in the community/technical colleges, and $50.7 million for state employee health insurance to address a shortfall in the PEBB funds.
The Governor stated she will introduce another budget in January in which she will "buy back" or restore some of these cuts using increased revenue. This will be her "Book II" budget.
She did not announce which revenue sources she will endorse but expressed that she is very conscious of not wanting any new revenue source to interfere with or slow down our state's economic recovery. When asked for an example of such a source, she cited an increase in the B&O tax.
Gregoire's list of buybacks would cost about $700 million. Her list includes:
Basic Health Plan
Apple Health for children
A scaled-back version of General Assistance (6 month eligibility with $250/month grants)
Levy equalization
State Need Grant (financial aid for college)
ECEAP slots and all-day kindergarten
Adult medical, dental, vision and hospice programs
Developmental disability and long-term care services
Other Proposals: The Governor will introduce legislation that address a number of areas:
Local Government Finance: She would like to give local governments more flexibility in how they use their revenues.
Levies: She suggests allowing school districts to raise their levy lids up to 36 percent.
Hospitals: She endorses the proposal from the Washington Hospital Association to set up a hospital assessment fee, which allows the state to capture additional federal funding.
Juvenile Rehabilitation: None will be closed, however there will be downsizing at Maple Lane, Green Hill and Naselle, with additional community placements instead.
Corrections: Several institutions will close – Pine Lodge, Larch and Ahtanum; McNeil will be converted to minimum security; and the stacks at the Walla Walla penitentiary will be closed and rebuilt. Additional beds will be opened at the new prison at Connell, where costs are lower.
Developmental Disabilities: Frances Haddon Morgan Center would close in 2011 and Rainier School in 2014.
The House State Government & Tribal Affairs Committee will meet today at 1:30 to review plans for saving more public dollars. As alluded to in our earlier post, the committee is scheduled to discuss the potential elimination of additional state boards and commissions.
Gregoire's office is sending folks to today's committee meeting to discuss her proposal. Committee chair Rep. Sam Hunt wants the committee to hit the ground running with specific cost-saving proposals.
The committee will also hold a work session to talk about the Washington Management Service (WMS), which was set up in 1993 and “… is a decentralized personnel system established separately for civil service managers in state government. Agencies have delegated authority under the law to create management positions. [The WMS] recognizes the unique nature of management positions and the importance of strong management skills to effective state government.”
Regarding the Washington Management Service and other aspects of state government, the Legislature earlier this year approved and the governor signed Engrossed Substitute House Bill 2049. This legislation calls for yearly public reports from every state agency on the number of classified workers the agency employs, as well as the agency’s WMS employees and the agency’s exempt employees. The agencies must also report the number and cost of bonuses and performance-based incentives that have been awarded to agency staff.
House Democrats are working on issues that matter: creating good jobs and a competitive business climate, building strong schools, protecting the environment and making government more accountable and efficient.
Democracy works best when citizens are accurately informed and fully engaged. We hope this blog helps you learn more about what House Democrats are doing to build a better future for all of us who live, work, and do business in this state.
Governor Inslee released his operating budget proposal today, which included $1.26 billion in new spending for K-12 education. 
