Washington lawmakers pass budget, McCleary fix

State lawmakers passed a $1.2 billion supplemental operating budget on the last day of the 2018 legislative session after a contentious vote along party lines.

Democrats celebrated key victories in the budget, including three-quarters of a billion dollars dedicated to K-12 salary allocations that puts an end to the six-year long struggle to bring Washington into compliance with the state Supreme Court’s 2012 McCleary decision, which found the state had unconstitutionally underfunded public schools.

The budget also reduces property taxes by about $400 million over the next two years, which Democrats argued will be a welcome respite to many who have received unexpectedly high property tax bills in the mail in recent weeks. This will amount to a 30-cent reduction in taxes for every $1000 of assessed property value.

But there was not a single Republican vote for the budget in the Senate, due to concerns from GOP lawmakers that the budget raided the state’s constitutionally protected “rainy day” fund, the budget stabilization account used for emergencies and financial downturn. $700 million is being redirected from the rainy day fund to K-12 and a reduction in property taxes.

“I’m glad we reduced property taxes, but I wish we could have done that within all the existing revenue that we had, rather than through an accounting maneuver that utilized money that should have gone into the budget stabilization account,” said Sen. Brad Hawkins, R-Wenatchee, in an interview. “I think we set a dangerous precedent.”

Setting that precedent weakens the state’s bonding authority and ability to manage debt, said Sen. Judy Warnick, R-Moses Lake. Warnick worked on a 2011 commission that looked at the state’s debt, one of the largest in the nation. That commission emphasized the importance of using a budget stabilization account to stabilize budgets, Warnick said, not to pay for pet projects while the state already expects more than $2 billion in unexpected revenue.

Republican leadership also isn’t impressed with the depth of property tax cuts, which are significantly smaller than had been proposed.

“The lack of sincere property tax relief is a fundamental problem, and we just spend too much money in general,” said Senate Minority Leader Mark Schoesler, R-Ritzville.

Many Republican senators felt there was a marked lack of money for issues that have a greater effect on people outside of the Puget Sound area. Warnick said she was disappointed that there wasn’t more regionalization funds for teachers in underserved areas or for public school transportation, which is significantly more costly in a rural district.

There were several provisions inside the budget that Republican legislators did support.

Hawkins was glad to see money for teacher salaries and forest health, vital in a district that regularly sees forest fires. The $27 million earmarked for special education was needed, Warnick said, and she was glad to see some manufacturing tax exemptions, pointing to one that will benefit the KDK Corporation electrolytic processing plant in the Grant County Airport industrial park.

Ultimately, no Republican senator voted in favor of the budget, despite provisions they might support.

“Very few people object to having more spent, but when it results in newer and higher taxes?” said Schoesler. “What will happen when we don’t have $2.5 billion in additional revenue growth? I think it’s a sad story.”