The proposed two-year, $43.7 billion operating budget represents a 13.5 increase in spending, including a $5.2 billion revenue increase from existing and new taxes.
OLYMPIA — As the clocked ticked down Friday, Washington’s legislators were mulling a state budget compromise that came together just short of a potential government shutdown.
Released Friday morning, the new state budget the Legislature must approve by the end of Friday totals $43.7 billion over the next two years.
That represents a $5.2 billion revenue increase from existing and new taxes, including a hike in the state property tax, according to budget documents.
Highlights of the McCleary agreement, released Thursday:
• A three-tier regional difference in how much the state provides for school employees, starting in the 2018-19 school year, based on housing costs.
• Existing teacher-salary schedule, based on seniority and education, to be eliminated.
• Beginning teachers would make at least $40,000. The maximum would be $90,000, although districts could pay more in areas with higher housing costs and for educators who teach science, technology, engineering and math or provide bilingual and special-education instruction.
• Increases to the amount of money provided for students who are below grade level, or are eligible for special-education or highly capable programs.
• Local levies for education are capped, starting in 2019, at $1.50 per $1,000 of assessed valuation, or $2,500 per pupil, whichever is lower.
• Initiative 1351, passed by voters in 2014, is kept on hold, with a work group assigned to recommend whether to phase in its class-size reductions and increased school staffing.
• Control of health benefits for all school employees would be moved from individual districts to the state.
Source: Senate Democratic Caucus and House Office of Program Research
And it boosts spending by 13.5 percent over the state’s present two-year operating budget.
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That increase is a bit too much for Sen. Mike Padden, R-Spokane Valley.
While he was satisfied with the property-tax part, “I’ll probably be a ‘no’ on the budget,” Padden said.
Seattle’s lawmakers, meanwhile, must decide whether to support the property-tax plan, which increases the state property tax earmarked for schools but caps local school district tax levies at a lower rate.
Democrats have said the plan, called a property tax swap, would increase taxes in “property rich” school districts like Seattle, Bellevue, Mercer Island and Lake Washington, and lower them in other districts.
Sen. Kevin Ranker, D-Orcas Island, one of the budget negotiators, has said rough numbers show the average Seattle household could pay more than $400 in additional property taxes each year.
“I think that’s the issue that the Seattle delegation is grappling with,” said Sen. David Frockt, D-Seattle. “Because there’s definitely people who feel that the [K-12] investment, while strong, while an improvement, needed to be more robust.”
“But the funding source is definitely an issue, and it’s an issue in Seattle, and that’s what a lot of the legislators are grappling with,” he added.
No votes on the budget and tax proposes had been scheduled by Friday afternoon, but lawmakers were expected to take the bills up today. The proposal will first be voted on in the Senate, before going to the House.
If a new budget isn’t approved and signed by Gov. Jay Inslee by midnight Friday, when the current budget expires, state government would start shutting down Saturday.
Lawmakers negotiated the budget and K-12 funding plan in secret over months. They reached an agreement this week, later than at any point in recent memory.
Political leaders briefed rank-and-file lawmakers on the proposal Thursday, but details weren’t publicly available until Friday.
Lawmakers have praised plan for addressing court-ordered public-schools funding that some called historic.
It adds $7.3 billion to K-12 education over four years. Of that, $1.8 billion is spent in the 2017-19 budget.
The bulk of the new revenue comes from an increase in the state property-tax levy, which raises $1.6 billion through 2019. As that new levy is put in place, local property-tax levies used for teacher salaries and other needs will be capped at a lower rate.
Property owners who qualify for the senior citizen tax-exemption program would not be affected by the property-tax increase.
Another $464 million is raised through the expansion of online sales-tax collections, and the elimination of tax breaks on bottled water and extracted fuels, the latter of which benefits oil refineries.
Legislators also found money for $15.6 million in tax breaks over two years for manufacturers, the film industry and agricultural wholesalers.
The budget contains plenty of new spending.
There’s $618 million for state-worker raises sought by Gov. Jay Inslee and Democrats. One in every five of those workers is expected to get an extra-large pay hike.
The agreement spends $102 million to improve Washington’s troubled mental-health system. Money is included to add community-crisis centers and beef up funding for the state’s psychiatric hospitals.
Other money would pay for beds to keep people from entering Western State Hospital — which has endured a litany of problems and is under federal review — and to discharge people who are waiting to leave the facility.
The deal adds $75 million to higher education and $25 million to expand a key early childhood-education program.
The plan gives the Department of Corrections $3.2 million to hire records staffers and beef up its IT systems in the wake of a long-running mistaken release of prisoners.
The deal also spends $6.3 million to create a new state Department of Children, Youth and Families.
The new agency would merge the Department of Early Learning with Child Protective Services, juvenile-justice programs, foster-care services and other child-welfare programs administered by the Department of Social and Health Services.
Inslee got a win in the budget on the clean-air rule he implemented by executive authority. The compromise spends $4.6 million to fund the program, which establishes carbon caps on greenhouse-gas emissions coming from a handful of businesses.
The budget adds $4 million to the Temporary Aid for Needy Families program, which represents a 2.5 boost in cash assistance. There’s also $3.7 million in new spending for civil legal-aid services.
The deal adds $8.9 million to homelessness and housing services.
It spends $1.2 million to update training for law-enforcement officers on using less-than-lethal force — a conversation that has gained intensity after high-profile shootings by police — and to create a leadership-development program.
The new budget also contains some savings, including a $13 million decrease by making a 6 percent reduction in government management positions.