This morning Governor Gregoire released her proposed 2012 supplemental budget and a revenue proposal.

2012 Supplemental Budget
The proposed supplemental budget reduces public services and programs by $1.7 billion and leaves an ending balance of $601.5 million for the remainder of the current biennium.

Higher Education
The Governor’s proposed supplemental budget reduces state support for higher education by $168.2 million. This includes a $160.1 million reduction to the two- and four-year public institutions. This represents a reduction of 17% in state funding for UW, WSU, and WWU; 16% for EWU, CWU, and Evergreen; and 13% for the community and technical colleges. For Evergreen this is an additional reduction of $2.95 million in state support. In addition, the Governor proposes suspension of the state work study program ($8.1 million) beginning fall 2012.

The Governor’s supplemental budget does make an investment in graduating more engineers ($7.6 million). These funds are directed towards the UW and WSU to enroll additional engineering students.

Governor’s Revenue Proposal

The Governor’s revenue proposal would raise more than $830 million in revenue. Gregoire recommended revenue options that support or have limited negative effects on the state’s economic recovery, promote fairness among taxpayers, simplify the state’s tax structure, and provide immediate benefits to address the budget shortfall.

The majority of funds would come from a 0.5% temporary increase in the sales tax (est. $494.1 million). The revenue generated from an increase in the sales tax would go to education ($411 million), long-term care and developmental disability services ($42 million), and public safety ($41 million). Of the new revenue for education $160 million would go to offset the proposed reduction to the two- and four-year public institutions in the Governor’s proposed 2012 supplemental budget.

The Governor recommends the remaining revenue come from an array of options such as imposing a $10 fee per invoice issued to a taxpayer for unpaid taxes and imposing a 1.5% gross receipts tax on gambling and lottery winnings. Her proposal divides additional revenue to be approved by the Legislature into two groupings: (1) revenue increases that would require a simple majority vote of the Legislature ($59 million) and (2) increases that would require a two-thirds vote of the Legislature ($282 million).

The Governor’s proposal does include recommended priorities if the Legislature does arrive at additional revenues beyond the increase in the sales tax. Among these priorities is support for the state work study program ($8.1 million).

The Legislature returns to Olympia next Monday (November 28) to consider the Governor’s proposed budget and develop their own proposals.