With the help of some good news this month when the Economic & Revenue Forecast Council released its update of projected revenue for the remainder of the biennium, the budget gap in Olympia is shrinking. For the first time in 15 quarters (almost four years), the revenue forecast was positive with estimated revenue for the biennium increasing by almost $100 million. Adding to this good news is an estimated reduction in caseload costs bringing what was an expected $1.5 billion deficit down to about $1 billion.
With this as a backdrop, the House Democrats yesterday released their budget that did not include a sales tax increase. According to Ross Hunter, House Ways and Means Chair, the tax increase, however, is still a possibility.
Although the House plan balances the budget without asking voters for a sales-tax increase, Hunter did not rule it out. No decision has been made yet, he said.
In this budget K-12 comes out far better than was expected earlier this year. Through accounting gimmicks used in the past, the state realizes savings by delaying our June apportionment payment to the first day in July, pushing the expenditure into the next biennium. They will also delay levy equalization payments and reduce the equalization rate beginning in August 2013 from the current 14% to 12%. This is good news for us as earlier budget possibilities included cutting the entire amount. If you are a budget nut and want more detail you can find it here and a related Seattle Times opinion that calls the budget irresponsible because it pushes the problem into the next biennium.
In contrast to this budget, the House Republicans earlier released their Education First budget. This is a concept that was first shared in 2006 and now seems to have more backing including some support from democrats. It would require that the legislature develop an education budget first, before looking at other needs in the state. They use the state constitution and recent court ruling to support this proposal. It did not, however, have the votes to get out of committee. You can read about this budget proposal on the Washington House Republican site here.
I will share more details as we learn more. We now wait for the Senate’s budget release next week and the negotiations that will follow between the two houses and the Governor. Perhaps we should add the recent State Supreme Court ruling on funding to the good news that may have been in the back of legislators minds as they crafted their budget. Other than the equalization reduction there may be little push back to this proposal. Even that would not result in big issues as levy equalization is arguably not part of basic education.