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A Little More Money, A Lot More Problems 

Washington state lawmakers make predictions for the upcoming legislative session

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The session hasn't even started and backroom budget talks have already begun. During this session, opening on Monday, lawmakers will be tasked with negotiating a multibillion-dollar, two-year balanced budget. If history is any indication, it certainly won't be easy.

In 2013, lawmakers spent six months — including two special sessions — in Olympia, debating the details of the most recent operating budget. They finally passed a spending plan two days before their deadline, averting a government shutdown in the process.

This year, lawmakers face an even more challenging budget cycle — one that House budget writer Rep. Ross Hunter, D-Medina, has described as "worse than we've seen in many decades."

Washington is expected to collect an additional $2.9 billion in revenue in the next two years, an 8 percent increase in economic growth, but that won't be enough to cover all of the state's competing expenses. According to an analysis by the Washington Budget and Policy Center, resources will fall $4.5 billion short.

click to enlarge Rep. Kevin Parker
  • Rep. Kevin Parker

House Democrats and Gov. Jay Inslee have floated new tax policy proposals in order to raise more revenue. Republicans, as expected, aren't supportive.

"We are still coming out of the recession," says Rep. Kevin Parker, R-Spokane. "The No. 1 rule is you do not raise taxes during a recession or the aftermath of recovery."

"For too long we've been saying 'do more with less' and what we have been doing is less with less," says Rep. Marcus Riccelli, D-Spokane. "What we need to do is pass a budget that reflects our values as a state... and not on the backs of our most needy."

Prepare for another long and difficult legislative session. As they cobble together a budget compromise, here are the big issues lawmakers will be talking about:

EDUCATION

Once again, public education will top legislators' list of priorities this year. In the 2012 McCleary case, the state Supreme Court ruled that Washington is failing its constitutional duty to amply fund basic education and ordered the state to fully fund it by 2018. Lawmakers made their first down payment on the McCleary decision in the most recent budget cycle, allocating almost $1 billion in additional funding to K-12 schools. But many education advocates felt that wasn't enough, and so did the state Supreme Court. Dissatisfied with the legislature's progress, justices held lawmakers in contempt this fall. According to the Budget and Policy Center, the legislature needs to invest $1.7 billion in the 2015-17 biennium in order to meet its deadline.

"It's clear that we have a constitutional and moral obligation to fully fund basic education, and this is the legislative session where we need to deliver on that obligation," says Sen. Andy Billig, D-Spokane. "I think the legislature will come to agreement on the full funding of education, and that means we will find the bipartisan approach to new revenue."

Compounding the state's budget woes is the voter-approved, class-size-reduction Initiative 1351. The ballot measure passed by a narrow margin in November without any funding mechanism attached. The state Office of Financial Management estimates that the cost to fully fund the initiative will total about $2 billion over the next biennium.

Billig's colleague, Sen. Michael Baumgartner, R-Spokane, says he'd like to see that initiative sent back to the voters this year, but with a two-penny sales tax increase included. Although changing or repealing the initiative would require a significant two-thirds vote in the legislature, Baumgartner doubts lawmakers will enact the measure.

"At the end of the day, that class size initiative — there's no funding for it, so it's hard for me to see how it will be implemented," he says.

Local lawmakers are also committed to laying the groundwork for Washington State University to establish a medical school in Spokane next session. Baumgartner and Riccelli are planning to introduce bipartisan bills to overturn a 1917 state statute giving the University of Washington a monopoly on medical education in the state. Once that law is changed, WSU will need $2.5 million from the state to pay for its medical school's accreditation — a drop in the budget's $30-plus-billion bucket.

"We need more primary care physicians," Riccelli says. "There's a huge economic development [benefit] to moving forward with this medical school, whether it be biomedical research or just ancillary jobs created."

MENTAL HEALTH

Washington's well-publicized shortage of public mental health beds has triggered two major lawsuits that the legislature will be forced to reckon with: In August, the state Supreme Court ruled that the practice of "boarding" mental health patients in emergency rooms when state hospital beds aren't available is unconstitutional. A second suit, filed in September, is challenging the time it takes the Department of Social and Health Services to conduct mental health evaluations of jail inmates.

Complying with the court's ruling will cost the state $58 million. Inslee's budget proposal would increase mental health treatment capacity by funding 145 new beds to prevent boarding and 35 new beds to reduce jail wait times for mental health evaluations. Parker says he would like to see a "more equity-based number of beds on the east side of the state."

click to enlarge Rep. Marcus Riccelli
  • Rep. Marcus Riccelli

Meanwhile, Riccelli is working on new legislation aimed at improving law enforcement interaction with people who threaten or attempt suicide. His legislation was drafted in response to the shooting death of Sheena Henderson at Rockwood Cancer Treatment Center last July: Henderson, 30, was shot and killed at work by her estranged husband, Chris Henderson, before he turned the gun on himself. Two months earlier, he had been detained by police and transported to the emergency room after making suicidal threats with a gun. Riccelli has been working with Henderson's father on the bill since August.

Riccelli's proposal would require law enforcement officers responding to reports of threatened or attempted suicide to take people into custody and deliver them to the emergency room if the officer believes they are a credible threat. Otherwise, under Riccelli's bill, the officer must report the incident to a designated mental health professional who can determine whether an involuntary detention is needed.

TRANSPORTATION

Amidst all of these budget pressures, what are the chances Spokane will see its long-awaited North-South Freeway funded and extended to I-90? Sadly, not good. Although a transportation package is in the works, "the odds are probably more likely than not that one does not come forward this year," says Parker. "If we see one, my thought is we'll see one pared down."

Baumgartner is more optimistic. "I think there's a chance," he says. "The maintenance budget is going to dry up essentially next year. There's going to be a more pressing need to reform the transportation system so that we get more value than we have now."

One of Inslee's tax proposals includes a cap-and-trade program, designed to curb greenhouse gas emissions by taxing the state's largest industrial polluters. The carbon tax revenue, Inslee said, would fund a $12 billion transportation package over 12 years. That plan allocates $432 million for the North-South Freeway, about half of what's needed to build the connection to I-90.

"That's just not good enough," Baumgartner says. "I'm adamant that nothing will pass unless it has full funding."

NEW REVENUE

The governor's tax proposals are guaranteed to inspire the greatest debate at the statehouse next session. In December, rolling back an earlier campaign promise not to raise taxes, Inslee announced his 2015-17 spending plan, which includes implementing new taxes on carbon emissions, capital gains and cigarettes, in addition to closing $282 million in tax-break loopholes. Altogether, his plan would increase state spending by $5 billion over the next two years, to $39 billion.

While Inslee's tax proposals may sail through the House, his plan will meet fierce opposition in the anti-tax, Republican-controlled Senate, where lawmakers argue that the state's 8 percent revenue growth should be enough to work with. The most straightforward solution to Washington's budget problem, Baumgartner says, "would just be to grow spending across the board [almost] 10 percent."

"There's always a persistent drumbeat in Olympia: there's not enough money; there's not enough money," says Baumgartner. "If you have 10 percent more money and you have trouble balancing your budget, you have a spending problem, not a budget problem."

Despite the slight uptick in economic growth, the state's tax resources are still below pre-recession levels, says Rep. Timm Ormsby, D-Spokane.

"That's just making up from the precipitous fall in revenue from the Great Recession," says Ormsby of the state's forecasted revenue growth. "When you compare that to caseload growth, inflation and population, we are basically back to where we were well before McCleary, 1351, the mental health lawsuits and initiatives to increase early learning opportunities and services for the elderly and infirm." ♦

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