By The Associated Press
and McClatchy News Service
OLYMPIA — Gov. Jay Inslee is expected to sign a $38.2 billion two-year state operating budget today that cuts tuition for college students and puts more money toward the state’s K-12 education system.
Inslee is set to sign the plan this afternoon, just hours before the end of the current two-year fiscal cycle.
Lawmakers moved swiftly to pass the budget Monday night in order to avoid a partial government shutdown that would have started Wednesday.
The House passed the budget plan on a 90-8 vote, just hours after the Senate passed it on a 38-10 vote.
The House is also expected to take a vote today on a $16.1 billion transportation revenue bill that includes an 11.9 cent incremental increase in the gas tax — with a first-step 7-cent gas-tax increase only a month.
Lawmakers are also expected to pass a construction budget.
The bill in the House, which passed the Senate by a 39-9 vote Monday night, calls for the 7-cent gas-tax increase on Aug. 1, followed by 4.9 cents more on July 1 next year.
There would also be higher weight fees for car-tab renewals on passenger vehicles.
Most of the money would go to widen or expand highways in the Puget Sound area, with smaller shares for local roads, ferries, maintenance, safety, transit and trails.
The House vote expected today is on what amounts to a compromise between the Democrat-controlled House and the Republican-controlled Senate.
Lawmakers can enact the program without a citizen ballot.
The initial 7-cent boost would put Washington into a tie with New York this summer for the nation’s third-highest gasoline tax, at 62.9 cents a gallon (44.5-cent state tax plus 18.4 cents federal tax), according to the American Petroleum Institute.
Pennsylvania and California collect more at 70 and 66 cents, respectively.
New spending highlights of the state transportaton plan include:
• The finish of the Highway 520 replacement, from Lake Washington to Interstate 5, $1.6 billion;
• The North Spokane Corridor, $879 million to finish a half-built freeway so that it reaches to I-90;
• The Puget Sound Gateway Project, $1.9 billion to build a 6-mile extension of Highway 167 from Puyallup to the Port of Tacoma, and to extend Highway 509 from SeaTac to I-5.
• I-405 from Renton to Bellevue, $1.2 billion to widen the clogged corridor.
• Interstate 90’s Snoqualmie Pass East project, receiving $426 million to finish the six-lane corridor from Lake Keechelus to Easton to provide better safety, lane space and animal crossings.
• Joint Base Lewis-McChord, $494 million for additional I-5 lanes and improved junctions in a chronically congested area.
The package wouldn’t pay to rebuild or add capacity to I-5 in Seattle, which could require up to $2 billion, nor are there any operational changes such as two-way express lanes, toll lanes or bus-rapid-transit lanes through the city.
Sound Transit would be allowed to submit a $15 billion tax package on the November 2016 ballot in urban Snohomish, King and Pierce counties, mainly to extend the light-rail system over 15 years.
Gas-tax supporters have warned that without better highways, Washington will lose competitiveness in the export-import business, as British Columbia, Gulf of Mexico and East Coast ports modernize and build better access routes.
Ferries also are a winner in the final version of the transportation bill, which includes $122 million to build a fourth Olympic-class, 144-car ferry similar to the new Tokitae, Samish, and the upcoming Chimacum, and $602 million overall for boats, terminals and operations.
State budget
Republican Sen. Andy Hill, the chamber’s key budget writer, said the new budget focuses on the priorities of the state.
Sen. Jim Hargrove, D-Hoquiam, agreed, saying it was “fairly remarkable from where we started out.”
Under the compromise, there would be a 15 percent reduction in tuition at the University of Washington and Washington State University, a 20 percent reduction at Western, Central and Eastern Washington universities and The Evergreen State College, and a 5 percent reduction at community and technical colleges.
The cuts would be phased in, with a 5 percent reduction in the first year of the biennium for all colleges and universities.
In 2016, tuition would be cut an additional 10 percent at the UW and WSU, and 15 percent at WWU, CWU, EWU and Evergreen.
The agreement adds an estimated $1.3 billion to K-12 education, including money to reduce class sizes in grades K-3, expand full-day kindergarten and cover other school costs.
Those moves were considered necessary to comply with a state Supreme Court ruling that said the state isn’t meeting its constitutional duty to fully fund basic education.
But the budget proposal doesn’t reduce classes in grades 4-12, which was required by voter-approved Initiative 1351 last fall.
Budget negotiators from both parties said Monday that they still don’t know how exactly they intend to limit or delay I-1351.
“We knew from the beginning that 1351 was going to be impossible to fund,” said Frank Ordway, government relations director at the League of Education Voters. “And that bore itself out in the budget negotiations.”
The budget gives a 3 percent cost-of-living raise to K-12 employees over the next two years, plus an additional temporary 1.8 percent increase that expires in 2017.
It proposes a slight increase in health-care benefits for K-12 employees, but not enough, the Washington Education Association said, to keep up with rising costs.
Ordway said he expects lawmakers to suspend Initiative 1351. Still, he called the budget “one of the best education budgets in the history of the state.”
Rich Wood, spokesman for the Washington Education Association, said the one-time 1.8 percent pay increase does little to make up for the six years that the state did not pay teachers regular cost-of-living adjustments.
Besides a 3 percent cost-of-living increase over the next two years, he said, there is no increase in base pay for teachers.
“People are already joking, and saying, ‘It’s like a tip,’ ” he said.
The agreement would eliminate a handful of tax exemptions — while extending others — to raise about $350 million through 2019.
House Democrats originally called for $1.5 billion in new revenue through 2017, including a tax on capital gains, but recent economic forecasts predict more money than expected from existing taxes.
The revenue plan ends a preferential business-and-occupation tax rate for royalty income and repeals a tax break for software manufacturers.
Among other provisions, the agreement applies the business-and-occupation tax to some out-of-state wholesalers and raises some excise- tax penalties.
No other state has cut tuition for its public universities and colleges for the coming academic year, according to the American Association of State Colleges and Universities.
Still, Washington’s tuition at four-year universities went up 34 percent in inflation-adjusted dollars over the past five years — much higher than the national increase of 17 percent, said Sandy Baum, a research professor at George Washington University and a national expert on college pricing.
She said Washington public-college tuition is currently about 16 percent above the national average.
The budget deal also freezes the payout value of the state’s Guaranteed Education Tuition (GET) tuition plan at today’s value, $117 per unit, for the next two years, said GET spokesman Ryan Betz.
Under the terms of a GET contract, the payout value is tied to the state’s highest tuition; one of the concerns about cutting tuition was that it would cause investors to lose money this year on the prepaid plan.
The budget agreement also provides $14 million for emergency drought response, and $31 million for a 9 percent increase in temporary cash assistance for families in need.
The budget deal drew criticism from Andy Nicholas, senior fiscal analyst with the progressive Washington State Budget and Policy Center, which had supported closing more tax breaks and imposing a new capital-gains tax on the wealthiest households.
“This is simply not a sustainable budget no matter how you slice it,” Nicholas said.
