Here’s how leaders in Washington’s Legislature want to spend an extra billion in tax revenue

OLYMPIA – House and Senate leaders released plans to spend an extra $1 billion on state programs over the next 16 months, taking advantage of an influx in unexpected tax revenue from the strong economy to add to a budget that already calls for record state spending.

They have no major tax increases other than a change in the Business and Occupation tax that has already passed, and no major tax cuts.

Among the areas for large increases in spending are programs to fight homelessness and secure affordable housing, improve the environment and boost spending on mental health care.

House Appropriations Committee Chairman Timm Ormsby, D-Spokane, said the House budget increases spending with “important and valuable investments focused on areas that need to be addressed right now.”

Republicans, however, criticized the budgets for not giving some of that money back to residents in the form of tax cuts.

“I am disappointed the majority would spend every last dime instead of providing any tax relief or making long-term investments,” said Rep. Drew Stokesbary, of Auburn, the ranking Republican on the Appropriations Committee.

The House and Senate operating budgets are similar, but not identical. The Senate budget, drafted by Ways and Means Committee Chairwoman Christine Rolfes, proposes spending $100 million to build a new behavioral health hospital for the University of Washington and another $100 million for “climate resiliency” projects.

Typically the separate Capital Construction budget would pay for a major construction project like the hospital.

House Capital Budget Chairman Steve Tharinger, D-Port Townsend, said funding for the hospital should stay in the budget, and questioned setting aside $100 million for the project at this point. The capital budget approved last year has $35 million for the hospital, he said.

“That’s about all they can spend in the next year,” Tharinger said.

Sen. David Frockt, D-Seattle, who leads the drafting of the supplemental capital budget in the Senate, said the $100 million would be used to replace that $35 million and pay for the rest of the project in the future, freeing up some of the state’s bond capacity for other projects, including the renovation of Western Washington State Hospital.

The $100 million for climate projects does not specify how that money would be spent, but would leave it to Gov. Jay Inslee and other state officials to select projects for improving forest health, reducing ocean acidification, increasing salmon habitat and protecting endangered species in coming years, Rolfes said.

The House budget also sets aside some money to be spent in future years, but as part of more than $230 million to fight homelessness and increase affordable low-income housing. It would put $75 million into a new account, for “Permanent Supportive Housing Assistance,” but the state would only spend $15 million before the end of the current budget on June 30, 2021, and then spend $15 million per year for the next four years.

Ormsby said the budget builds on the record-setting two-year budget the Legislature passed last year to address “emergent needs.” He said he was explaining the budget to a group in Spokane after last year’s session ended and they had mostly positive responses. He felt good about that until he walked away from the meeting.

“I turned the corner and there was a couple, huddled under a blanket to keep warm, and it struck me we have more work to do,” he said.

The Senate’s operating budget proposes an extra $115 million for homeless programs, most of it going to increase shelter capacity and housing programs. But it has another $25 million in the capital budget to increase shelter capacity and preserve affordable housing that is scheduled to be sold by a federal agency.

The two budgets may be farthest apart on spending money for public schools. The House spreads some $192 million over a wide range of programs including counselors in high-poverty schools, a school nurse corps for rural and small schools, Local Effort Assistance to schools that are scheduled to get less at aid because of high property assessments and help with transportation costs. The Senate budget has about $83 million in extra money for special education, Local Effort Assistance and para educator training.

Both budgets set aside at least $42 million for the Washington College Grants program, which provides tuition help on a sliding scale to students based on household income. Demand for the program has outstripped the amount budgeted last spring, and the Legislature revised a change in the business and occupation tax earlier this session to help cover the shortfall.

Both also would spend an extra $9.6 million for election security in this year’s elections.

Extra revenue driven by the strong economy puts the state in “an extremely fortunate position,” Rolfes said. The state has its highest bond rating in history, healthy reserves and strong economic growth.

Republicans disagreed, saying Democrats aren’t listening to the people who want some of their money back.

“The lack of really meaningful tax relief in this plan is more evidence of the government greed we saw with the billions in unnecessary tax increases approved last year and the billion-dollar Business and Occupation tax hike approved just a couple of weeks ago,” said Sen. John Braun of Centralia, the ranking Republican on the Ways and Means Committee.

The budgets are subject to change after committee hearings and with amendments accepted when they come to a vote in the full House or Senate, with compromises between those spending plans and the one released by Gov. Jay Inslee in December. A budget agreement would have to be passed by both chambers by March 12.

Rolfes predicted the Legislature would reach a budget compromise by that deadline because “we share the same values as the House does.”