Ending a months-long standoff that came within a day of shutting down state government, the Washington Legislature passed a two-year budget June 29 that increases funding for schools and colleges, raises gas taxes to pay for transportation investments, and gives schoolteachers and state employees a raise for the first time in seven years.
It took the regular session plus three special sessions to finalize the budget because of difficulty reconciling the vision of the Republican-led state Senate and the Democratic-led state House. Republicans proposed a budget of $37.9 billion, and the Democrats a budget of $38.4 billion. And one of the differences was that Senate Republicans didn’t want to fund public employee raises that Democratic Gov. Jay Inslee had agreed to in collective bargaining.
The final resolution came after rolling one-day strikes by up to 40,000 teachers and a series of lunch-time rallies by members of Washington Federation of State Employees (AFSCME Council 28). Public employee unions—including Washington Federation of State Employees, Teamsters Local 117, Service Employees, Professional & Technical Employees Local 17, HealthCare 1199NW, American Federation of Teachers-Washington, and Washington Public Employees Association (United Food and Commercial Workers Local 365)—waged a “Public Service Matters” campaign combining protest demonstrations with newspaper and radio ads.
Ultimately, the two sides split the difference with a $38.2 billion compromise budget. As part of the deal, Democrats dropped a proposal to institute a capital gains tax, something 41 other states have. Washington is unusual in that it has a sales tax and property tax, but no income tax. A union-backed coalition known as Washington United for Fair Revenue supported the capital gains tax proposal, and also called on lawmakers to close corporate tax loopholes. Legislators did close a few of the loopholes, including preferential business sales tax rates for software manufacturers, for royalty income, and for out-of-state wholesalers. But they extended or adopted other tax breaks, including one for oil refineries.
The compromise budget deal also includes a transportation funding package paid for with a 7-cent gas tax hike Aug. 1, followed by a 4.9-cent hike on July 1, 2016. The increases will raise $16 billion over 16 years to expand highways and pay for local roads, ferries, maintenance, safety, transit and trails. As part of the compromise, Democrats also dropped a low-carbon fuel standard Inslee had campaigned for. Environmental groups condemned the transportation package because of that.
The compromise budget passed the Senate by a 39-9 vote. Vancouver Republican Don Benton was among those voting against it, as was Republican John Braun in the 20th District (North of La Center).
State employees will get a 4.8 percent wage increase over the next two years—the first general wage increases for state employees in seven years—plus maintenance of health benefits. Republican legislators earlier threatened to cut health coverage for state employees’ spouses.
The stand-off is not unlike the one in 2013, when House Democrats and Senate Republicans fought through one-and-a-half special sessions—and took Washington state government to the same brink before reaching agreement on June 27— three days before it would have shut down.