OLYMPIA — House and Senate budget negotiators have reached agreement on a $64.1 billion supplemental state budget.
Agreement was reached on Wednesday, one day before the Legislature was set to adjourn its 60-day legislative session.
The compromise budget builds off of the $59 billion, two-year spending plan adopted by the Legislature last year and is similar to initial proposals released last month by both chambers, with significant spending in a variety of areas, including efforts on reducing homelessness, adding more social supports like nurses and counselors for students, and behavioral health.
Before voting to approve the agreement at a conference committee, Democratic Rep. Nicole Macri said the budget “really represents our collective values to continue to respond to this pandemic as we continue to navigate our way out of it and to make meaningful investments in the families and small business that we know have been hit hardest.”
The total amount is less than the House’s original $65.2 billion proposal, but slightly more than the Senate’s initial $63.5 billion plan. The final plan now moves to each chamber for final passage, starting in the House Friday afternoon.
While there are no general tax increases, there are also no across-the-board tax cuts, something Republicans had argued should have been on the table given the significant influx of revenues the state has seen over the past year, plus more than $1 billion in remaining pandemic-related federal relief funds that were used in the budget.
Initial plans to offer targeted tax relief options — like a three-day sales tax holiday around Labor Day that was in the House budget, and the Senate’s initial proposal to make Discover Passes for state parks and lands free for one year, and provide grants so that state and county fairs could offer free admission this year — were all left out of the compromise budget. A small business tax credit was included that would affect about 125,000 small businesses in the state, according to budget writers.
Starting next January, businesses making less than $125,000 a year would pay no state business taxes, and for those making up to $250,000 a year, business taxes will be cut in half.
With ongoing inflation and rising gas prices at the pump, majority Democrats in the Senate on Tuesday rejected a parliamentary procedure attempted by Republicans to bring up for a vote a bill that would suspend the state gas tax for the remainder of the year. The Democratic floor leader, in calling for the motion to be rejected, said it would upend lawmakers’ negotiated work on the supplemental budget plan and transportation revenue package.
Republican Rep. Drew Stokesbary said while there were good things in the budget, he expressed frustration that he and his GOP colleagues had not seen details of the plan until just an hour before and that it wasn’t a more collaborative effort.
“My biggest disappointment is the inability to provide meaningful tax relief to the people that we represent,” he said.
The supplemental operating budget also spends state or federal money on:
• $350 million to help shore up the state’s paid family leave program, which officials warned was nearing a deficit, raising concerns about long-term solvency following a significant increase in demand for the benefit that launched in 2020.
• $351 million to increase rates to vendors providing services to people with developmental disabilities or long-term care needs.
• $232 million for raises for state workers. According to the Office of Financial Management, about 63,800 general government employees will get a 3.25 percent general wage increase, about 6,700 state corrections workers will get a 4 percent general wage increase and about 1,200 State Patrol officers will get a 10 percent general wage increase. The last general wage increase for represented employees was July 1, 2020.
• $283 million on higher education, including more than $46 million for training for health care workforce and training initiatives.
• $144 million for ongoing COVID-19 response in the public health system.
• $100 million for utility assistance for low-income customers.
The plan leaves about $3 billion in total reserves.
The operating budget also transfers more than $2 billion to the nearly $17 billion, 16-year transportation revenue package.
Lawmakers reached a final agreement on Wednesday to that package after finding another source for $2 billion of the overall funding after cutting an initial proposed tax on fuel exported from the state’s five refineries that was heavily criticized by neighboring states.
To fill that hole, for the next 15 years, the agreed-upon plan pulls an additional $57 million a year from the state budget, and another $57 million a year from the state’s public works account.
The transportation revenue package spends on projects ranging from building new hybrid electric ferries and funding more walking and biking corridors to highway maintenance and replacing fish passage culverts.
Funding is also provided to ensure that those 18 and younger can ride for free on public transportation.
Lawmakers had already reached agreement on a $1.5 billion state construction budget that spends on areas ranging from housing and homelessness, to behavioral health facilities, to making seismic upgrades at public schools. That budget was approved with unanimous support, passing the House Tuesday night and clearing the Senate Wednesday.