Rain falls in January 2014 on the Capitol Campus in Olympia. Republican leaders in the state Senate released their 2017-19 biennial budget proposal Tuesday. Ted S. Warren The Associated Press file, 2014
Rain falls in January 2014 on the Capitol Campus in Olympia. Republican leaders in the state Senate released their 2017-19 biennial budget proposal Tuesday. Ted S. Warren The Associated Press file, 2014

Politics & Government

GOP budget would reject state worker raises to help pay for schools

March 21, 2017 10:18 AM

UPDATED March 22, 2017 08:59 PM

Republican legislative leaders released a new two-year budget proposal Tuesday that aims to fix how Washington state pays for schools and would trim spending elsewhere to make that happen.

The $43 billion spending plan released by Senate GOP leaders would impose a new statewide property tax to pay for education, while eliminating local school district property tax levies to offset the costs to taxpayers.

Overall, Senate leaders said their plan would add about $1.8 billion to the state’s K-12 school system over the next two years.

To help find that money, the GOP plan would reject nearly all of the collective bargaining agreements Gov. Jay Inslee’s office reached with 38 employee unions. Instead, state workers would get flat raises of $500 per year for the next two years.

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Senate leaders would save about $250 million over two years by not funding the contracts as negotiated, which include cost-of-living raises of roughly 6 percent for most state workers during the 2017-19 budget cycle.

The GOP plan would approve only two labor contracts: the ones negotiated with State Patrol employees and corrections workers. Money would be provided to pay for health care benefits negotiated with the other labor unions.

Rejection of the $500 million labor contracts is bound to face opposition in the Democratic-controlled state House, where leaders have said they need to provide salary increases to retain and recruit workers. The Senate is controlled by a conservative majority of 24 Republicans and one Democrat.

State Sen. John Braun, R-Centralia and the Senate’s chief budget writer, said his budget looks to take about $3 billion in increased revenue from economic growth and focus the bulk of that money on education, without raising taxes for most Washingtonians.

He and other Republicans have objected to the cost of the state worker contracts and have been dissatisfied that lawmakers aren’t more directly involved with the negotiations, which occur in private meetings between unions and the governor’s budget office.

“I’m not saying that we don’t value our state employees,” Braun said Tuesday. “We just think that’s a decision that should be done at the Legislature, in the legislative process.”

I’m not saying that we don’t value our state employees.

Sen. John Braun, R-Centralia, the lead writer of a budget proposal that rejects state worker contracts

Braun said approving the largest labor contracts in state history doesn’t make sense when the state is under a court order to fix the way it pays for schools by September 2018.

In the McCleary case, the state Supreme Court has said the state must take on the full costs of paying school employee salaries, which, right now, are being paid partly through local school district property tax levies. The high court has said lawmakers must put a plan in place to resolve the McCleary problem by the time they finish their work in 2017.

The new statewide property tax GOP lawmakers would impose to pay for schools would raise about $1.5 billion over the next two years and about $4 billion during the following 2019-2021 budget cycle.

Those numbers are different from what Senate leaders released earlier this year when describing their education plan. Braun said that’s because an uptick in revenue projections has enabled GOP lawmakers to lower their statewide property tax to $1.55 per $1,000 in assessed value — down from the $1.80 per $1,000 in assessed value they announced in January.

Starting in 2019, the new statewide property tax will replace local school district maintenance and operation levies, a swap that Braun said would result in lower property taxes for 83 percent of Washington taxpayers.

According to staff, the GOP plan would get rid of about $2.4 billion annually in local school district property tax collections starting in 2019, when the new statewide tax would be fully phased in.

Beyond education, the Senate budget proposal would spend about $95 million in the next two years to improve conditions at the state’s two psychiatric hospitals. One of those hospitals, Western State in Lakewood, has been plagued by capacity and safety issues in recent years.

Another $75 million over the next two years would go toward boosting enrollment at the state’s four-year universities, as well as to university scholarships and medical programs.

The Senate budget would help pay for some of that with other reductions, including:

▪ $109 million in savings from eliminating state contributions to most police and firefighters’ retirement plans.

▪ $53 million by eliminating the Housing and Essential Needs program.

▪ $44 million by limiting who is eligible for state-funded child care programs.

▪ $33 million through changes to the Temporary Assistance for Needy Families program, including limiting who's eligible.

Sen. Kevin Ranker, the lead Democratic negotiator on the Senate budget, called the GOP’s proposed cuts to social service programs “unacceptable.”

“I think it dramatically impacts some of the neediest in our state, and that’s just really unfortunate,” the Democrat from Orcas Island said.

The Senate’s two-year budget proposal also relies on about $200 million in transfers to the general fund from other accounts.

I think it dramatically impacts some of the neediest in our state, and that’s just really unfortunate.

State Sen. Kevin Ranker, D-Orcas Island, on the Senate GOP budget proposal

The plan is expected to come up for a vote Thursday on the Senate floor. House Democrats are expected to release a competing budget proposal next week.

Coming up with a final budget agreement will require prolonged negotiation between House and Senate leaders, as well as with Democratic Gov. Jay Inslee, who was quick to criticize the GOP proposal Tuesday.

In particular, Inslee knocked the Senate plan for relying on a new property tax to pay for schools, an approach he said would raise taxes for too many people living in high-cost areas, such as King County.

Inslee has instead proposed a $46-billion budget that would raise about $4.4 billion through new taxes on carbon emissions, capital gains, and increased taxes on service businesses.

The governor also attacked the Senate budget for slashing programs for early childhood education and the homeless, saying those cuts would “hurt people across the state of Washington.”

“I’m looking forward to getting a better proposal out of the Legislature than this one,” Inslee said. “This doesn’t cut it.”

Melissa Santos: 360-357-0209, @melissasantos1