OLYMPIA — Majority Democrats in the House rolled out a budget Wednesday that would haul in more tax revenues and spend more money on public schools than either the governor or the Republican-controlled Senate.
House Democrats are proposing to raise $1.34 billion by repealing or modifying a host of tax exemptions and making permanent taxes on beer and professional services now set to expire this summer.
Their budget pours all those dollars into early learning, elementary and secondary schools in response to last year’s Supreme Court decision which found the state failing to amply fund basic education programs.
“We’re very proud of this budget. It is a responsible, honest and sustainable budget,” said House Majority Leader Pat Sullivan, D-Covington.
And it sets them on a collision course with the Republican-run majority in the Senate which last week passed a budget with no new taxes and no extension of existing taxes.
“The budget the Senate passed lives within our means,” said Senate Republican Leader Mark Schoesler, R-Ritzville. “The House Democrat budget proposal raises one thousand dollars more in taxes from every Washington family; that’s way too much.”
Democratic leaders in the House said the Senate plan is a mess.
“Republicans in the Senate depend completely on unspecified cuts, unconstitutional transfers and gimmicks,” said Rep. Ross Hunter, D-Medina, the chairman of the House Appropriations Committee. “We’re proposing a balanced, responsible, honest approach to both the long term and short term problems. The difference in the two approaches is substantial.”
The chief budget writer for Senate Republicans shrugged off the criticism as verbal jousting.
“They can say anything they want about our budget,” said Sen. Andy Hill, R-Redmond, the chairman of the Senate Ways and Means Committee who’ll be negotiating with Hunter. “This is just language. I’m not going to get in argument.”
Not surprisingly, Inslee lauded the House plan. It mirrors much of what he put forth last month when he endorsed raising $1.2 billion in new tax revenue.
“This budget sends a very clear message: Educating our children is more important than preserving tax breaks,” he said.
Overall, the House proposal calls for $34.5 billion in spending in the next two-year budget, which is slightly more than the governor. It sets aside $337 million in reserves while draining $575 million from a separate constitutionally protected rainy day fund to help close a projected $1.2 billion shortfall.
The Senate budget spends around $33.2 billion and has $611 million in reserves. Most of that is the rainy-day fund.
House Democrats, like the governor, count on money from a permanent hike in the business and occupation tax paid by doctors, lawyers and accountants.
And they also want to lower then permanently extend a beer tax imposed on firms which produce more than 60,000 barrels a year. They would lower it from 50 cents per gallon to 25 cents per gallon. And they want to levy a 15-cent-per-gallon surtax on small brewers as well.
Other changes include ending a sales tax exemption on bottled water and repealing a decades-old rule which allowed some non-residents to avoid paying sales tax on purchases. This would affect residents of Oregon and other states which do not have a sales tax.
Hunter’s draining of the rainy day fund is a sore point for Republicans and could be a sticking point later. Tapping the fund in this manner requires support from a 60 percent majority of House members.
Rep. Gary Alexander, R-Olympia, the lead Republican budget writer, said it “puts our state in a precarious position moving forward. Using every last penny from the state’s ‘Rainy Day Fund’ is a bad idea.
“If I viewed the bipartisan budget that passed the state Senate as a step forward, I’d have to say the House Democrat’s budget takes two steps back,” he said. “This looks to me more like a line being drawn in the sand than a first step toward compromise.”
Beyond taxes, other points of tension loom.
In higher education, the Senate budget calls for a 3 percent cut in tuition at four-year universities while the House plan assumes a 5 percent increase at the University of Washington, Washington State University and Western Washington University. Three percent hikes are slated for the other two regional universities, Central and Eastern, the Evergreen State College and the two-year community and technical colleges.
House Democrats want to move forward with the controversial policy of allowing foreign-born students, whose parents brought them into the country illegally, to be eligible for state financial aid for college. It includes $100,000 to implement the Dream Act, a bill which has been blocked by Republicans in the Senate Majority Coalition.
The Senate budget pares $40 million in funding through changes in the Aged, Blind and Disabled program including reducing the monthly cash grant to aged immigrants from $197 to $99. House Democrats don’t touch the program.
Notably, there’s agreement on several issues which had the potential to be real thorns in the negotiations.
All three proposals embrace expanding Medicaid; when the session began, many Senate Republicans expressed reservation with doing so.
It will make an estimated 255,000 low-income adults eligible for assistance. The federal government will pick up the entire cost and that will save the state as much as $300 million.
All three eliminate furloughs for state workers; the past two years, workers have been required to take days off equal to about 3 percent of their pay. Collective bargaining agreements with state workers and higher education employees are also funded in each proposal. Pay and benefits of public employees have been targeted by lawmakers the past few years.
Both budgets assume savings of $324 million by suspending the cost-of-living raises for teachers required under Initiative 732 and $126 million from fewer people seeking services through the Temporary Assistance for Needy Families and Working Connections child care programs.
And both cut $29.8 million in funding for alternative learning experience programs which cover costs of online and home school programs.
The House, Senate and governor all cover the cost of a 50-cent an hour increase for 43,000 home care aides. Though the workers secured the pay hike through arbitration, there has been concern it might not be fully funded because it will cost the state $73 million a year.
It’s not all good news for home care workers who earn around $10 an hour. The Senate budget cuts their hours, a move the House does not.