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UPDATE – House Democrats budget proposal puts $1.9 billion extra into K-12; also raises $1.3 billion in new revenues

Post by Brad Shannon / The Olympian on April 10, 2013 at 12:16 pm with No Comments »
April 10, 2013 1:46 pm
Rep. Ross Hunter
Rep. Ross Hunter

A lot of the attention in the House Democrats’ budget plan being unveiled during lunch today will be on the $1.34 billion in new revenues – including closed tax exemptions for oil refineries, bottled water, insurance agents, and out-of-state purchases of everything except cars.

The Democrats’ $34.5 billion budget, which House Appropriations chairman Ross Hunter has said he would not unveil if he didn’t have at least 50 votes to pass it, also spends at least $1.3 billion more than the Senate’s $33.2 billion spending plan that passed on a bipartisan vote of 30-to-18 Friday evening. An Appropriations hearing begins at 3:30 today on the House plan – giving the public about three hours to react and comment.

Putting the two budgets on the table now fully joins the battle over how much to tax and spend at the Capitol in 2013 – with the governor and a majority of Democrats in both chambers wanting to see extra revenues to blunt cuts the Senate made to human services.

You can find links to the budget documents on this page. More details are also likely to be revealed as the House Democratic budget leaders answer questions from reporters in a news conference that is starting right now. You can follow the Democrats’ press conference on the budget here on TVW.

Having looked at a few embargoed budget documents this morning, I can offer a quick sketch of the budget highlights – and comparisons to the Senate plan. It’s possible some of the numbers will change in final iterations but both approaches expand Medicaid fully to allow coverage of up to 300,000 more low-income people and both add substantially to public education spending [Democrats are saying 300,000; other estimates are 250,000].

First off on revenues, the House Democrats increase them. The Senate added revenues but not anything that carried the label “tax” on them.

Just like Gov. Jay Inslee proposed, the House Democrats would permanently extend a 0.3 percentage point tax surcharge on service businesses’ gross revenues to raise $534 million over two years and extend a beer tax – both due to expire in June.

But unlike Inslee, who broadened the beer tax to craft breweries, the House would lower the size of the beer tax surcharge on large breweries and add a surcharge for craft brews – in effect adding 14 cents per six-pack for large brewery products and a little over 8 cents on craft products.

Another key difference on revenues is that the House doesn’t rely on a Senate proposal to shift $166 million of timber-trust money out of the Common School Construction Fund to pay for operations. Hunter has argued the move is not constitutional, but Senate Ways and Means chairman Andy Hill, R-Redmond, has cited staff legal advice that it has been done before and the move has not been challenged in court.

Sen. Andy Hill
Sen. Andy Hill

Of the big spending totals, House Democrats are proposing to increase spending on K-12 programs by about $1.9 billion – going from the 2011-13 budget to the next two-year cycle. This compares to an increase of about $1.5 billion for the Senate.

Of that education increase, the House is pledging $1.3 billion for basic education in response to the Supreme Court’s ruling in the case brought by the McCleary family and others – compared to about $1 billion for the Senate. One major difference is the House puts in $225 million for class-size reductions in grades K-3 – while the Senate avoids class size improvements altogether.

The House also says it is seeking to put in $293 million more into higher ed than in the current budget cycle. This includes a net $96.7 million more for higher education institutions – using tuition hikes to raise $174 million – and another $57.6 million more for financial aid to offset some of the unspecified tuition hike.

Gov. Jay Inslee has proposed letting the UW and WSU raise tuition by up to 5 percent a year and for the regional colleges to go up as much as 3 percent while holding community colleges level. The Senate cuts tuition by 3 percent. The House appears to be following Inslee’s approach – except that the House also assumes a 3 percent increase in tuition at community and technical colleges.

The House also provides $157.4 million more for public-employee compensation – largely by avoiding the unproven Senate proposal to shift part time K-12 and state agency employees into the Health Benefits Exchange set up under Obamacare. The House also spends $2.35 million more on health care to avoid a health-insurance surcharge for smokers that the Senate-passed plan includes.

Both chambers would scuttle Initiative 732’s cost-of-living raises for K-12 and community college workers that reduces state obligations by $324 million.  Both also fully fund an arbitrator’s recommendation for 5 percent yearly pay raises for home-care workers that provide chore services to elderly and poor disabled people on Medicaid – worth $146.1 million.

But the House adds $247 million more for administrative and classified workers’ salaries than the Senate did – this lets the state assume more of the share of local salary costs, which responds to the Supreme Court ruling. But contrary to an early report, there are no cost of living increases for educators. However, like the Senate budget does, the House Democrats budget proposes to restore the money cut in 2011 for salary allocations for K-12 and community colleges.

The House also puts in almost $237 million more into human services than the Senate – reducing funds for Temporary Aid to Needy Families by $17.6 million less than the Senate; by avoiding $10.7 million in cuts to chore services such as housekeeping and shopping; and avoiding some $127 million in cuts to the Housing and Essential Needs program that serves people who have temporary disabilities or are waiting to receive federal disability benefits.

The House also restores the adult dental program, putting in $23.9 million or about $14.1 million more than the Senate did. But the House does not follow the Senate’s lead in putting in money for the State Food Assistance program helping legal immigrants.

Stay tuned. We’ll be running staff and wire reports in Thursday’s papers and likely have more blog posts coming today.

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