2016 Legislative Session Begins

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The 2016 legislative session kicked off this Monday, January 11th. This is a short session and, in addition to adopting a supplemental budget, will focus on a plan to meet the State’s constitutional basic education obligations.  The supplemental budget is expected to address costs incurred during the worst fire season in state history and cover increased Medicaid caseloads that provide health care for some of Washington’s most vulnerable citizens.

Governor Inslee’s proposed budget, which was released in late December, focuses on addressing a K-12 teacher shortage by raising starting salaries to $40,000 and mandating a minimum 1% cost of living adjustment for all existing teachers. Inslee’s plan also strengthens mental health services by increasing staffing at state psychiatric hospitals and boosting community-based programs that minimize hospitalization.

The legislature got right to business yesterday with the Senate Ways & Means Committee public hearing on the Governor’s proposed supplemental budget. The House Appropriations Committee will be hearing Governor Inslee’s budget on Wednesday, January 13th. With just 60 days to adopt a supplemental budget, both fiscal committees have full agendas for the first week of session.

 

 

 

House Releases New Proposal and Holds Public Hearing

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Yesterday the House released a revised biennial budget and this morning held a public hearing on the new proposal.

The proposal makes a handful of changes based on the recent revenue forecast as well as an extension of the higher federal match for the Children’s Health Insurance Program combined with smaller updates and corrections. These changes are made to the proposal initially released by the House in April.

The latest House proposal retains only one of the major new revenue proposals put forth by the chamber – the capital gains tax.  In addition the latest proposal includes $34 million in savings in state employee health benefits, assuming a lower rate increase than previously calculated; $220 million less for K-12 public schools of which the majority comes from not increasing funding for K-12 health benefits; and $11 million less for natural resources of which the majority comes from not increasing the disaster contingency appropriations.

The proposal increases appropriations by $17 million for mental health, increases the TANF grant by 9% instead of providing increased funding for specific services, and an additional $50 million is assumed above the original proposal for low income health care costs which are covered by anticipated increases in marijuana related revenue.

As it relates to higher education the new proposal provides $32 million less for higher education, nearly all of which comes from the reduced costs of health benefits, and a reduction to the Opportunity Scholarship from $60 million in the original proposal to $30 million.

The House is scheduled to move the new proposal out of committee tomorrow, June 3 at 1:00 pm.

First Special Session Ends; Second Session Begins with Exchange of New Budget Proposals

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Yesterday the Washington Legislature ended the first special session of the 2015 regular legislative session.  While lawmakers were successful in passing a transportation budget, they did not reach agreement on a biennial operating or capital budget and several policy bills that would be necessary to implement the budgets proposed this session.

Governor Inslee immediately announced a special session to begin this morning.  The Legislature will have 30 days to complete their work. In addition the Governor firmly asked negotiators to move their discussions to his office for face-to-face daily meetings instead of exchanging budgets via paper.

On Thursday afternoon the Senate released a revised operating budget that they argue makes progress on several concerns raised by the House including keeping institutions whole with regard to the proposed tuition reduction, holding private non-profit institutions harmless in the State Need Grant program, and increasing funding for compensation.

The House, who will release their counteroffer on Monday and hold a public hearing on Tuesday, expressed concern about a lack of funding for mental health ($50 million), early learning ($115 million) and support for teacher COLAs ($154 million) in the Senate’s latest proposal.

Senate Releases Revised Budget

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This morning the Senate released a revised biennial budget and by the afternoon the Senate Ways & Means Committee advanced the budget to the floor.

The proposal makes a handful of changes based on the recent revenue forecast as well as an extension of the higher federal match for the Children’s Health Insurance Program combined with smaller updates and corrections. These changes are made to the proposal initially released by the Senate in April which spends $37.9 billion.

The proposal released today increases spending on policy initiatives by $242 million in the 2015-17 biennium.  The largest increases included: (1) $113 million in higher education, (2) $77 million in employee compensation, (3) $27 million in long term care and developmental disabilities and (4) $16 million in natural resources.

As it relates to higher education the new proposal provides an additional $99 million to implement the College Affordability Program in the first year of the biennium. In addition funding is provided to mitigate impacts on private schools from the financial aid changes proposed in the budget and makes changes based on updated information about current use of tuition waivers by institutions of higher education.

More Money

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Yesterday the Washington State Economic and Revenue Forecast Council released revenue projections for the current and upcoming biennia.  Last week the Council met and voted to move the June forecast up to mid-May.

This is the last forecast before the end of the current fiscal year. The forecast predicts the state will collect $106 million more than expected in fees and taxes for the 2013-2015 budget biennium, which ends this June 30. In addition, the state can anticipate $309 million more in taxes and fees than expected for the 2015-2017 budget biennium, which begin this July 1.

The forecast is expected to spur negotiations on the Hill.  Legislative leaders exchanged budget offers last week and plan to continue negotiating and exchanging offers this week.  The current 30-day special session ends May 28.

June Revenue Forecast in May? Possibly

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Today the Economic and Revenue Forecast Council announced a meeting for tomorrow. The sole agenda item is to consider the timing of the next revenue forecast. Currently the next forecast is scheduled to be released on June 17.

In the past week bipartisan support has emerged to consider moving the June forecast up.  Policymakers are concerned that the June date is too late as the Legislature continues to work to reach a compromise budget.

 

Next Week Marks Halfway Point in Special Session

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Next Thursday marks the halfway point in special session.The thirty day special session that convened on April 29 is scheduled to end on May 28.

This Week

This week budget writers met for two days to discuss and brief on the more than 1,000 differences between the two budgets.  Leadership shared that at this point budget writers are going through the budget, identifying differences and determining where decisions will be required to reach a compromise.

Within the multitude of differences, the Legislature must reach agreement on several big policy and funding issues including support for K-12 basic education and mental health and then how to support these funds, which inserts a conservation around revenue.

In an effort to assist these conversations there is a bipartisan effort to push for an early revenue forecast to determine if the state will collect more revenue.  The next revenue forecast is scheduled for mid-June, which many policymakers recognize is too late.

Next Week

While there is no floor action scheduled to date, next week a handful of House and Senate Committees are scheduled to meet.  In the House this includes a public hearing on Thursday in House Appropriations to discuss a new approach to the Governor’s proposed cap-and-trade plan and on Wednesday a public hearing in House Finance on a capital gains tax proposal.  The Senate Higher Education Committee will convene on Thursday, as well, for a work session on transfer between institutions and sectors.

This Week: Special Session Enters First Full Week

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Last week marked the beginning of a 30-day special session following the completion of the 2015 regular session at the end of April.  The first few days of special session saw some action, which is a schedule that is likely to follow this week.

The House and Senate are scheduled for pro forma sessions the first part of this week. There are no House committees scheduled to date to meet this week, and only a handful are expected to meet in the Senate at the end of the week.

First Day of Special Session

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Today is the first day of a 30-day special session.  The Legislature faces major issues in the next month including biennial operating, capital and transportation budgets and policy legislation necessary to implement the budget.

Last Friday the Legislature adjourned the 2015 regular session.  Governor Inslee requested negotiators return earlier this week to continue budget negotiations.

The first week of the session will be a mix of negotiations and committee meetings.  Budget writers and leadership are expected to brief their caucuses today and the fiscal committees are scheduled for public hearings today and tomorrow.