OLYMPIA — State lawmakers will arrive Thursday for the final day of regular session looking to approve a budget that fully funds public schools and provides temporary property tax relief.
But there are some questions whether they also will act to reduce Sound Transit car tabs or increase the age to purchase a semiautomatic rifle.
Senate Democrats on Wednesday pushed through their plan for a one-time reduction in state property taxes in 2019, overcoming fierce opposition from Republicans incensed by the way they pay for it.
On a 25-23 vote, Democrats passed a bill to use a windfall of revenue from a surging economy to buy down part of the property tax increase lawmakers enacted last year to meet state school-funding obligations.
In their approach, some of the extraordinary revenue bound for the state’s emergency reserves would be redirected into an account for education. That sum will ensure the state meets a fall deadline to fully fund its share of the public school system as required by the Supreme Court in the McCleary case.
With the diversion, Democrats could pass the bill with a simple majority rather than a super majority as is required to extract money out of what is commonly known as the rainy day fund.
The unprecedented maneuver drew howls of protest from Republicans, and a rebuke from the state treasurer. They said it deprived the rainy day fund of $700 million that might be needed in the next economic downturn.
“We are committing fiscal malpractice by diverting these funds,” said Sen. Steve O’Ban, R-University Place, during the Senate floor debate.
“This is reckless. This is irresponsible. It is unconstitutional,” said Sen. Hans Zeiger, R-Puyallup. “We can do better.”
Treasurer Duane Davidson, a Republican, issued a statement saying the approach is “very short-sighted.”
“With the growing concerns of trade wars and market volatility, now is the time to build rainy day balances even higher. The historic boom we are in will not last,” he said.
Sen. Christine Rolfes, D-Bainbridge Island, chairwoman of the Senate Ways and Means Committee, said the approach doesn’t endanger the stability of state finances and the windfall will help homeowners deal with soaring property taxes.
“It is true this move is unprecedented,” she said. “It was unprecedented that we raised the property tax so high last year. It is unprecedented that we are giving some of the money back.”
In 2017, lawmakers and Gov. Jay Inslee hiked the statewide tax rate by 81 cents to $2.70 per $1,000 assessed value. It marked the single-largest hike in state history and is a contributing factor to the startling increases homeowners are finding on their tax bills this month.
Under Senate Bill 6614, the rate won’t change this year but in 2019 will be reduced by 30 cents to $2.40 per $1,000 of assessed value. It will go back to $2.70 in 2020.
The property tax bill is an element of the larger supplemental budget deal released Wednesday by House and Senate Democrats. Both chambers will need to approve it before midnight Thursday to avert a special session.
The agreement calls for $1.2 billion in new spending in the current budget. Overall, after adjustments and savings for reduced demand for some state services, it works out to a net increase of $941 million on top of the $43.7 billion budget passed last June.
The single-biggest surge of spending is for public schools to meet the court demands.
“A decade-long odyssey is finally coming to an end. This supplemental budget will fully fund teacher compensation and address the final piece of the McCleary lawsuit,” said Rep. Timm Ormsby, D-Spokane, chairman of the House Appropriations Committee.
Democrats earmark $776.3 million for salaries of school teachers, staff and administrators in this budget cycle plus another $194 million in the 2019-21 budget to complete the task.
Special education will receive more money as well. And Democrats set aside $105.2 million to pay penalties that have piled up in the McCleary case since August 2015 when the court found the Legislature in contempt for not meeting its milestones. The court has said it wants the fine money reinvested in elementary and secondary schools.
And the budget pours roughly $231 million more into behavioral and mental health. It will pay for improvements at the state’s two psychiatric hospitals, complying with federal court decrees regarding evaluation and treatment for people accused of crimes, and tackling a crisis of opiate abuse.
The total includes $50.7 million to cover higher operating costs at the two state psychiatric hospitals plus changes required at Western State Hospital to continue receiving federal funding. And there is $46.4 million to cover the anticipated accumulation of fines, attorney fees and other costs associated with the Trueblood case, which aims to eliminate long waits for evaluation and treatment for people accused of crimes.
Of interest to Snohomish County, there is $800,000 for a 40-bed residential criminal justice diversion center pilot project at the former work release site in Everett, an undertaking aimed at better addressing street-level drug addiction and mental illness.
While Democrats are united on the budget and property tax cut, they are divided on the issue of Sound Transit car tabs entering the session’s final day.
Bills passed in the House and Senate would force the regional transit authority to change how it calculates the motor vehicle excise tax and provide owners of 2.5 million vehicles a little savings. But the Senate also wants to offset the loss of revenue to Sound Transit to keep its voter-approved expansion plans on track.
There are still lawmakers pushing to pass a Senate bill that would raise the age for buying a semiautomatic rifle from 18 to 21 and to require state background checks of purchasers of such weapons. As of Thursday night, the measure had not been voted on by the Senate.