A budget emerges as lawmakers reach session’s final day

OLYMPIA — Fueled by rising tax collections and a bounty of federal aid, majority Democrats in the state Legislature unveiled a two-year budget Saturday that funds the state’s pandemic response, strengthens its safety net of social services, expands child care, and confronts long-term challenges posed by wildfires.

Release of the 1,100-page spending blueprint came as lawmakers pushed to pass budgets and complete work on legislation dealing with carbon emissions, drug laws, and homelessness before concluding their 2021 regular session Sunday.

One major climate change bill cleared its last hurdle Saturday and is headed to Gov. Jay Inslee. Another is close to joining it.

On a 27-22 vote, the Senate agreed with changes made by the House to the Climate Commitment Act creating a cap-and-trade program to reduce carbon emissions from some of the state’s largest polluters. When Inslee signs the bill it will make Washington join California as the only states with such a program.

A controversial low carbon fuel standard bill is on course too. House and Senate Democrats struck a deal to require by 2038 that the carbon intensity of fuels be 20% lower than 2017 levels. Enforcement of this bill, and cap-and-trade, are linked to the Legislature also approving a 5-cent hike in the gas tax to fund transportation projects.

Also Saturday, the House overwhelmingly passed a legislative response to the state Supreme Court’s Blake decision striking down the state law that made simple drug possession a felony. On an 80-18 vote, the House revised then passed Senate Bill 5476 and returned it to the Senate which will be asked to concur.

It makes drug possession in certain amounts a crime again but lessens the penalty to a misdemeanor. It encourages, but does not require, prosecutors pursue diversion for offenders. And it expands outreach and recovery services for those with substance use disorder. There’s roughly $77 million in the next budget to cover those costs.

“This measure, for the first time, offers a helping hand rather than handcuffs,” said Rep. Roger Goodman, D-Kirkland ahead of the vote.

Meanwhile, the Senate, on a 26-23 vote, approved House Bill 1277 to increase the document recording fee by $100 and used the money to promote building of affordable housing and expand shelter services, rapid housing, vouchers and other means of helping homeless individuals. The Senate made changes requiring it be sent back to the House for final action.

That fee increase will generate about $292 million in the next biennium. It is one of several contained in the budget drawn up by Democratic budget writers in the House and Senate that diagrams a whole lot of spending in the next biennium.

At the core is $59.2 billion of state tax collections to be expended on programs, services and day-to-day operations of state government. On top of that is nearly $11 billion in federal COVID-19 relief funds, most of which are earmarked to assist individuals, families, businesses and schools impacted by the coronavirus pandemic.

Democratic budget writers said the plan will provide help to those who continue to need it most.

“This budget will change people’s lives,” said Sen. June Robinson, D-Everett, a vice chair of the Senate Ways and Means Committee.

Republicans said that while they appreciated some of their priorities made the final cut, they strongly disagreed with the numerous taxes and fees, specifically citing the capital gains tax.

“The fact that this relies on new taxes is a choice, it’s not a necessity,” said Rep. Drew Stokesbary, R-Auburn, the ranking Republican on the House Appropriations Committee.

The budget mirrors earlier versions passed in the Democrat-led Senate and House. It represents final sums for services and programs negotiated in recent weeks by the party’s chief budget writers in each chamber.

Of the federal dollars, $1.1 billion is earmarked for the coronavirus response, including continuing vaccination efforts, testing and contact tracing, and hiring additional public health workers. Another $1.7 billion is programmed mostly for assisting in reopening of public and charter schools, accelerating programs to deal with learning loss during the pandemic and addressing student mental health challenges.

There’s $658 million to extend the state’s rental assistance program, $187 million to help lower-income homeowners avoid foreclosure and $340 million in grants to help undocumented immigrants impacted by COVID-19 who are unable to access other benefits due to their citizenship status. The sum also includes $528 million for child care grants and increased payments for providers and a $500 million deposit into the Unemployment Insurance fund to avert a hike in taxes on businesses next year.

In the regular budget, Democrats sweep emergency reserves out of the Rainy Day Fund and pencil in future proceeds from a capital gains tax to cover spending. They project the state will still end up with $1.2 billion in reserves when the next budget cycle ends.

Among the big ticket items are an $800 million payment into the teachers retirement system to reduce its unfunded accrued liability.

Two new initiatives are covered. There’s a $298 million blend of state and federal dollars to cover the Fair Start Act, which widens access and eligibility for an array of early learning and child care services. And there is $261 million to begin doling out cash rebates in 2023 of $50 to $300 to eligible families through the working families tax credit. Lawmakers created the program in 2008 but this will be the first time it is funded.

There’s also $150 million for the state’s public health system which has borne the brunt of the response to the pandemic, $162 million to respond to the Blake decision, $125 million for improving the health of forests and reducing the threat of wildfires, and $100 million to eliminate state employee furloughs that had been scheduled for the next biennium.

And the final budget doles out roughly $212 million to public schools to offset the loss of revenue from declining enrollment and transportation expenses. In addition, there is money earmarked for hiring of more school counselors and assuring every school district in the state receives at least $500 per student in COVID relief funding when combined with federal dollars.

Meanwhile, work on a $6.3 billion capital budget is done. The Senate approved it Friday and the House unanimously passed it Saturday.

Reporter Jerry Cornfield: jcornfield@heraldnet.com | @dospueblos