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UPDATE – Senate Republicans offer ‘bipartisan’ budget that avoids taxes; K-12, employee contracts are funded

Post by Brad Shannon / The Olympian on April 3, 2013 at 12:00 pm | No Comments »
April 3, 2013 6:43 pm

Republican and Democratic budget writers unveiled a $33.2 billion two-year operating budget today that fully funds state labor contracts, shifts $1 billion in new money into basic education and boosts financing for higher education and early learning.

Sen. Andy Hill
Sen. Andy Hill

The plan, which was crafted by Republicans with Democratic input, assumes $1.2 billion in savings from various cuts or policy changes. It makes ends meet without extending businesses taxes or ending and shrinking tax breaks for select industries as Gov. Jay Inslee proposes to do.

“We met 32 nights. We ordered 63 pizzas. We had three Chinese take-outs and my legislative assistant cooked up two crock-pot dinners,” said Sen. Andy Hill, a Redmond Republican who is chief architect of the plan and chair of the Senate Ways and Means Committee. “In all, 16 senators were involved in budget building and writing. We had a small army of staff and 243 Diet Cokes. I did not drink them all.”

Hill spoke to reporters in an embargoed morning press briefing and is expected to offer more remarks during a formal unveiling of the budget at noon. The budget is the first budget produced by the GOP-dominated Majority Coalition Caucus, which took over the Senate this year with help from two maverick Democrats. Hill had collaboration from Democratic Sens. Jim Hargrove of Hoquiam and Sharon Nelson of Maury Island.

Here’s the budget bill, a summary and an agency-by-agency breakdown.

Its fate is uncertain but assumes Democratic and Republican votes to approve it, although Hargrove joked that in the end he and Hill may be the only supporters. Senate Democratic Leader Ed Murray said in a text “it needs work to get D votes.’’

More will be known after today’s 3:30 p.m. hearing in the Senate Ways and Means Committee where interest groups are likely to highlight its shortcomings.

“The top lines are – it’s a billion dollars to basic education,” Hill told reporters, referring to funds that some would say is in response to the Supreme Court’s ruling in the McCleary school funding case. “It’s $1.5 billion overall (new funding) to K-12 education. (There’s) no new taxes – we live within our means. We make investments in higher ed. We make investments in early learning.’’

In sharp contrast, Gov. Jay Inslee proposed last week to put about $1.2 billion, about $200 million more, into K-12 schools to answer the McCleary ruling, and he would raise $1.2 billion in new revenue from extending business and beer taxes due to lapse in June and also by closing tax breaks for many industries.

The Senate plan gets $1.2 billion using multiple fund shifts, including large grabs of money from welfare programs, toxics cleanup and public works revolving fund that aids local governments. The Senate also assumes about $65 million in savings from “Lean” management that Inslee touts, while Inslee is not yet booking savings and has proposed spending a few million dollars on training fellowships for workers.

But where Inslee proposed tuition increases of up to 3 percent yearly at regional universities and 5 percent at the University of Washington and Washington State, the Senate plan cuts tuition by 3 percent – a move that top House budget writer Ross Hunter, D-Medina, has said is unworkable long term without new revenues.

Although the GOP plan does not explicitly call for new taxes, the spending plan does assume some new revenues – about $303 million from fully expanding Medicaid for low-income adults as provided under Obamacare and making changes to “streamline’’ it. The Republicans also extend a hospital “safety-net fee,” or bed tax, that raises $238 million over two years and would stay in place for six years as the state tries to wean itself off that extra revenue stream, Hill said. UPDATE: Republicans say, however, this is not really a tax and would not qualify for a November advisory ballot under terms of Initiative 960.

On the other hand, the Senate plan does not revise the state estate tax law, which sprung a loophole after a court ruling that could cost the state $160 million. The Senate does not propose to change a telecommunications tax to answer a court ruling, even though House Republicans’ budget writer Gary Alexander of Thurston County has said he is backing such a move.

The Senate budget breaks ground in a few ways that labor groups may look at with skepticism. It seeks to shift about 7,000 low-income, part time staffers in general government and another 13,000 from the K-12 school systems into the state-run health-care exchange to save $128 million.

The K-12 employees’ unions would need to bargain for the change but they would be given a $2 per hour increase in pay and could qualify for federal subsidies under Obamacare, according to Hargrove.

The GOP budget also shifts assistance money for the poor from what once was known as the Disability Lifeline and now as Housing and Essential Needs program.

Hargrove said they do not further restrict available slots for child care or welfare cash grants and that there is room under the funding to allow more people to qualify and receive child-care subsidies. He said the policies on who qualifies are not being changed.

Asked who is hurt by the budget, Hargrove replied: “I would say we have gone pretty deep into the housing program. I’m not sure how that is going to work on the ground …”

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