Sine die, silent night
In an anticlimactic finish, the gavels fell at 3:49 p.m., Wednesday, Dec. 14, bringing an end to a special session that started Nov. 28 to close the gap on a projected $1.4 billion for the current biennium and put another $600,000 in reserves.
The end was quite a contrast to the start of the special session, which was marked with noisy protests, crammed hearing rooms, and an increased Washington State Patrol presence on the Capitol campus.
Once House Democrats reached agreement a week ago, and the Senate followed suit a few days later, an “early action” 2012 supplemental budget of about $480 million was put on a fast track to get legislators home to constituents and families for the holidays.
SHB 2058 passed the House 86-8, and the Senate 42-6. While some House Republicans used floor time to express disappointment and dissatisfaction with the process and the ultimate result, both parties in the Senate moved the bill quickly with minimal discussion.
The early action or “down payment,” as some are referring to it, is a combination of actual cuts, transfers, and delayed payments, as well as $50 million in unclaimed property, and another $83 million of savings captured from “under-spending” and budget adjustments.
Two funding changes for K-12 were made: moving bus depreciation payments from October to the following August – for a one-time savings of $49 million; and adding a June count day for enrollment purposes – for anticipated ongoing savings to the state in general apportionment and in categorical programs. Both higher education and early learning were spared, although OSPI received an additional 10 percent reduction.
Gov. Chris Gregoire will sign the budget bill and other bills that passed during the special session Tuesday, Dec. 20 at 3 p.m.
Hard Candy Christmas
The really tough decisions face lawmakers when they return for the 60-day regular session Jan. 9.
All the big pieces remain on the table, including cutting school days, reducing or restructuring Local Effort Assistance (LEA), increasing class sizes, or reducing K-12 staff salaries again.
Other ideas still in play are shifting the June 30 apportionment payment to July 1, thereby shifting the obligation to the following year; reducing bonuses for National Board Certified Teachers; and anything else not explicitly seen as protected under “basic education.”
In addition, Gov. Chris Gregoire had an even larger list of “cuts” ideas she delivered to legislators in October. Any of those may be fair game, although some, such as eliminating all bus transportation for students, is so unpopular is it highly unlikely to be in a final supplemental budget.
While legislators couldn’t agree on the types or size of the big cuts to make, they do agree that K-12 will be touched when they return next year. Both House and Senate leadership have stated there is no way to close the budget shortfall without K-12 taking some cuts – how much and where those cuts will fall is still up for debate, as are the various proposals floating around regarding new revenue.
All I Want for Christmas …
When the Governor submitted her recommendations for a supplemental budget Nov. 21, she also announced a proposal to increase the sales tax by half a cent for three years. With the projected $500 million to be raised, the Governor would ask voters to “buy back” cuts to K-12 and higher education to the tune of $411 million.
While many who testified before House and Senate fiscal committees expressed support for considering new revenue to blunt the impact of cuts – particularly using an existing source that could bring a quick infusion of cash into the system – others expressed concern.
In what might seem an odd alignment, the Association of Washington Business and some larger businesses (e.g., Boeing and Microsoft) in the state are saying they could support a temporary bump in sales tax, while the Washington Education Association has come out against the proposal. It’s just politics, folks, and has the potential to get very messy come next February/March when the real decisions have to be made.
Other revenue ideas still floating around are eliminating or limiting tax exemptions, getting the federal government to require sales tax collection on Internet sales, a potential property tax shift dedicated to K-12 offered by Rep. Ross Hunter, D-Medina, charging sales tax on services, and even income tax.
Most have been dismissed as taking too long to bring in funds needed to plug the gap between revenues and expenditures in this biennium or too controversial or both. Still, an all-cuts budget is unpalatable to many lawmakers, and we are hearing that all revenue ideas are “still on the table.”
Next week’s Carol of the Bells continues, with updates on the Governor’s Education Reform proposals, the K-12 Health Benefits report, State Board of Education rule-making restricting waivers, and actions from the Quality Education Council’s meeting Monday, Dec. 19.