State GOP budget allocates education money without new taxes

OLYMPIA — Delivering on their promise of a contrast to Democratic budget proposals, Senate Republicans on Tuesday released a budget plan for 2015-17 that would cover court-mandated education costs without raising taxes.

The proposal calls for spending about $1.3 billion to comply with the state Supreme Court decision known as McCleary to improve state education funding — a number similar to what the Democrat-controlled House proposed last week in its budget plan.

“Taxes should be the last resort and not the first response,” said Sen. Andy Hill, chief budget writer in the Senate during a news conference announcing the budget.

What may be the biggest difference between the $38 billion GOP plan and $38.8 billion plan offered last week by the Democrat-controlled House is the approach to paying state workers. The Republicans propose spending about $500 million less on state-worker wages and benefits, according to Hill, R-Redmond, chairman of the Senate Ways and Means Committee.

The Republican plan rejects state-worker contracts as negotiated or arbitrated last year. Instead, Republicans offered a less expensive version, giving $2,000 pay increases to state workers over two years.

The Democratic House proposal also spends $203 million to bolster health-insurance plans for K-12 employees that the GOP proposal does not include.

Like last week’s Democratic proposal, the GOP plan gives teachers their first cost-of-living adjustment in six years, though a slightly smaller increase than what the House proposed.

But just like the Democratic proposal, the GOP plan would alter Initiative 1351, the K-12 class-size reduction measure approved by voters in November, to cover only K-3. The Republican plan, however, would send that change to I-1351 back to voters for a referendum.

The GOP plan would also lower college tuition by funding a bill to reset tuition rates. Under the Senate plan, tuition at the state’s public universities and community colleges would be reduced to a percentage of the average state wage. Under that proposal, a student now paying $10,740 in tuition at the University of Washington would pay $7,560 in the 2017 budget year.

A measure outlining this proposal has already passed the Senate and awaits action in the House.

To help pay for the education spending, the Republican proposal redirects about $300 million in recreational-marijuana tax revenue. While some marijuana-tax money currently goes into the state’s general fund, most of it by law is directed toward the state’s Basic Health plan, as well as substance-abuse prevention, public health and research programs.

An additional $380 million is transferred to the state general fund from other accounts, including $200 million from the Public Works Assistance Account, which gives loans and guarantees for local government public-works projects. Money in separate accounts that include the state’s tobacco-settlement funds and liquor taxes are also moved to the state’s general-fund account.

Rep. Reuven Carlyle, D-Seattle, said Republicans’ diversion of the marijuana money — which comes from Initiative 502, — was tantamount to “completely rewriting the initiative.”

“It’s just not a stable, long-term real funding source to sweep every one-time account, hope people smoke dope and rewrite an initiative all because of a unrelentingly fierce resolve to never utter the T-word,” said Carlyle, referring to taxes.

Rep. Ross Hunter, D-Medina and chief budget writer in the House, said in a statement Tuesday that the GOP proposal depended on “overly optimistic assumptions of marijuana revenue” and “assumes millions in magic agency ‘efficiencies,’ which are essentially budget gimmicks designed to make cuts without being specific about which cuts they’re making.”

A spokesman for Washington Education Association (WEA), the state’s largest teachers union, wrote in an email Tuesday that while the House budget didn’t go far enough to fund teacher pay and education, the Senate budget fails even more to do so.

“On educator pay and health benefits alone, the Senate budget is $368 million less than proposed by the House on Friday,” wrote WEA spokesman Rich Wood in a statement.

Republicans have contended that the projected $3 billion in new revenue from existing taxes — which represents about a 9 percent increase over the $33.8 billion budget approved for 2013-15 — should be enough to pay for any new programs.

In a statement, the Association of Washington Businesses praised that sentiment.

“By avoiding tax increases, Senate leaders have demonstrated they understand that Washington’s economy is still fragile and that many parts of the state are still struggling to emerge from years of recession,” Kris Johnson, president of the association, said in prepared remarks. “In 37 of 39 counties, Washington’s unemployment rate remains higher than the national average.”

Both the Democrat-controlled House and Gov. Jay Inslee, in their own budget proposals, have recommended raising about $1.5 billion in new revenue on top of the projected revenue gains.

In December, Inslee proposed a tax on carbon polluters, a 7 percent tax on some capital assets and a 50-cent-per-pack cigarette-tax increase.

On Friday, Democrats in the House proposed a $38.8 billion, two-year budget that would raise about $1.5 billion in new revenue, in part by raising a segment of the state business-and-occupation tax and instituting a new 5 percent tax on some capital gains. The Democratic proposal would spend $1.4 billion toward fulfilling McCleary K-12 education funding and would freeze college tuition, increase college grants to students and invest more in early learning.

In a statement, Inslee said he was encouraged by the Senate Republicans’ “significant investment” in basic education. But he said that without raising additional revenue, the plan comes up short.