As Washington enters what are supposed to be the final weeks of its state budget process, the chasm between what the Democratic governor wants and Democratic lawmakers have proposed appears to be widening.
Gov. Bob Ferguson
Ferguson, the former state attorney general, won the governor's race last year to replace Jay Inslee, who decided not to run for a fourth term.
His fellow Democrats run the state legislature, but Senate and House leadership are not aligned with the governor on the budget.
Ferguson said this week he will not sign the budget bills passed by either the House or Senate and that he doesn't support their "wealth tax" plan because it's untested and would be challenged in court immediately.
Lawmakers are supposed to approve an operating budget, transportation budget and capital projects budget by the end of their session on April 27. After each chamber's version is approved separately, lawmakers have to find compromises where approaches differ.
The budgets included the $4 billion in cuts Ferguson recommended, as well as the $3 billion in cuts Inslee had included in his budget proposal before he left office, according to the governor.
The projected deficit has soared to $16 billion over the next four years between state economists
"We knew things were rocky, but they have escalated dramatically," Ferguson said.
Despite his opposition to the wealth tax, he did signal a willingness to raise taxes in other ways, saying he supported a capital gains tax when he was attorney general, and believes the state's current tax structure is regressive.
Washington does not have an individual or a corporate income tax, though it taxes capital gains and has a gross receipts tax, according
State Sen. June Robinson, D-Everett, who chairs the Ways & Means Committee, said in a statement she appreciates the governor's commitment to a balanced approach, which includes both responsible reductions and new revenue.
"The governor is absolutely right to say the budgets from the Senate and House Democrats propose 'far too much' in new taxes," said Sen. Chris Gildon of Puyallup, the Senate Republican budget leader.
"Tens of thousands of people have told us as much in the course of opposing the Senate Democrats' record-breaking $21 billion tax package," Gildon said. "We're glad the governor seems to be hearing them as well."
The proposals include a tax on stocks and bonds aimed at high-net taxpayers that would exempt the first $50 million of income, but generate $2 billion per year for K-12 education. The proposal would also raise the 1% cap on annual property tax collections.
The House passed its $77.8 billion operating budget on a 54-44 vote on Monday, while the Senate approved its $78.5 billion operating budget on Saturday. The Senate budget relies on $6.2 billion from a four-year $17 billion package of tax increases, yet to be voted on.
"This begins the final countdown of trying to negotiate all the budgets," said Sen. Majority Leader Jamie Pedersen, D-Seattle.
"Our state always has a balanced budget," said Rep. Steve Tharinger, D-Port Townsend. "It was balanced when we left town last year, but trade wars, federal budget cuts and inflation created a gap. The House proposal closes that gap in a balanced way."
He said most programs are held at their current funding level, but some are delayed or cut.
Like the House version, the Senate version would also increase the cap on annual property taxes and includes the tax on the wealthy. The Senate also wants to levy a payroll tax on large companies, cut several tax breaks and reduce the sales tax rate.
Cuts in both chamber's proposed operating budgets include slicing about $1 billion in new funding for special education and public school operations.
The Senate would drain the state's reserves, while the House version leaves them in place. The Senate version would also furlough state employees for up to 13 days a year.
Transportation budget
The Senate also passed
For the 2025-27 biennium, the Senate would spend $279 million on transportation operations and $1.8 billion on capital projects. The Senate also passed
The House approved a $15.2 billion transportation budget Wednesday that is $1 billion less than the Senate's version.
Each version has other differences that will have to be worked out including the gas tax. The House would increase gas taxes by 9 cents per gallon, and then index it to inflation.
The Senate passed the tax increases for its transportation bill on Saturday, but the House didn't act on its tax bill.
Capital Budgets
Lawmakers released capital budget proposals on Monday.
The House proposed spending $7.6 billion, and the Senate $7.3 billion. The big ticket items include $2 billion each for behavioral health and natural resources, $1 billion for education and $720 million for housing.
Sen. Yasmin Trudeau, D-Tacoma, vice chair of the Senate Ways and Means Committee, said the budget meets the bedrock principles she had in mind when crafting the bill, which was to be most responsive to the state's most essential infrastructure needs.
"We are making major investments in social infrastructure like affordable housing, while also preserving existing housing," she said.
Bond sales primarily fund the capital budget, unlike the operating budget, which is dependent on general fund revenues.
Both chambers proposed significant investments in K-12 education projects.
Under the Senate proposal, K-12 projects would receive slightly more than $1 billion. The Senate plan would also allocate $202 million in funding for building modernization in small school districts and at tribal compact schools, and $143 million for the School Seismic Safety Grant Program to retrofit or relocate schools located in high seismic areas or tsunami zones.
The House proposal includes $1.1 billion in funding for K-12 project investments. Those investments include $563 million for school construction and $250 million for building modernization in small and tribal compact schools and $151 million for the seismic safety program.
The Senate proposed over $770 million for housing and homelessness projects including $600 million for the Housing Trust Fund, the state's main funding source for affordable housing, and $160 million for transit-oriented affordable housing and homeownership expansion.
House lawmakers are proposing $723 million for housing and homelessness, including $100 million for permanent supportive housing projects.
Both chambers proposed $282 million funds for ongoing improvements to the $947 million replacement of
Senators set aside $2.3 billion for natural resource projects, including $892 million for toxic cleanup and prevention and $141 million for habitat restoration.
The House's natural resource budget was $2.2 billion and included $70 million for the Chehalis Basin Strategy and $60 million for a flood prevention and habitat restoration program targeting the state's rivers.
