The budget process cleared a major hurdle on Monday, February 26, when the House passed an amended version of the Senate’s supplemental FY 2017-19 budget. The Senate passed its version of the budget on Friday, February 23. Both chambers use the unanticipated increased revenue forecast for additional investments in education funding, increased services for mental health, increased safety net for individuals needing social services, and to implement a state property tax reduction using funds from the “rainy day” fund. The two chambers will continue to work on resolving differences between the two budget proposals during the remaining time left until session ends March 8. See AWC’s key messages on preferred provisions within each budget proposal.

The House proposed budget includes a total budget of $44.2 billion, and the Senate includes spending for a total budget of $44.6 billion. Both supplemental budget proposals include $775 million in 2017-19 and $969 million over four years in additional funding allocated to implement the Supreme Court’s view on the timing of implementation of teacher salary increases by September 2018 to fully implement their McCleary decision.

Both proposals also use revenue from the “rainy day” fund to implement a state property tax reduction. The Senate proposal includes a reduction of $0.31 per thousand in 2019. The House proposal includes a reduction of $0.34 per thousand in 2019 and $0.40 in 2020 and the passage of a capital gains tax, HB 2967, to provide on-going property tax reduction.

State-shared revenues

We appreciate that both proposals leave intact the adopted funding levels for revenues shared with cities, including liquor profits and taxes. Additional marijuana revenues of $18 million for disbursement to certain cities and counties tied to the February 2018 revenue forecast are included in both proposals. The House proposal intends to carry the increased appropriation of $30 million into future biennia. The Senate’s intent is to fund future appropriations at the 2015-17 level of $12 million per biennia. Streamlined Sales Tax mitigation is fully funded for the biennium at $20.6 million.

Mental health

Senate: Provides $38 million for community behavioral health enhancements, provides $1 million to fund a mental health field response team grant program, and funds a diversion center pilot program at $800,000.

House: Provides $70 million for a defined community behavioral health enhancement—including rates, provided $1 million to fund a mental health response team grant program, and funds the diversion pilot program at $500,000.

Housing and homelessness

Senate: Funds a landlord mitigation account to assist in implementation of restrictions on income discrimination in rental housing.

House: Funds $65.9 million for FY 2019, 2020, and 2021 for AWC priority bill HB 2437 providing counties and cities with a local sales tax option credited against the state sales tax for affordable housing and supportive housing options. Provides funding for implementation of expanded eligibility for the Housing and Essential Needs (HEN) program.

Opioid treatment and prevention

Senate: The proposal includes increasing the Medicaid rate for Medication Assisted Treatment and $14.4 million additional funding for evidence-based treatment services, including expansion of hub and spoke networks to provide capacity.

House: The proposal includes increasing the Medicaid rate for Medication Assisted Treatment. It also adds $562,000 to develop the prescription monitoring program for implementation of HB 1427, and $14.4 million to implement strategies to prevention and treatment of opioid use disorders including four new hub and spoke networks to provide capacity.

Pensions

Senate: PERS 1/TRS 1 cost of living adjustment (COLA) includes a one-time, 2 percent COLA with a maximum annual benefit increase of $750 for retired PERS 1/TRS 1 members. This would increase the PERS 1 supplemental contribution rate for PERS and PSERS employers.

House: Funds a 3 percent increase to the minimum benefit and the alternative minimum benefit for PERS 1/TRS 1 retirees who qualify. This would increase the PERS 1 supplemental contribution rate for PERS and PSERS employers. The House amended the Senate’s bill to match their version.

Basic Law Enforcement Academy

Senate: Funds one additional class in 2019 and allows local spending authority for a locally funded class for which local employers would pay 100 percent of the costs in 2018.

House: Funds two additional classes in 2019 and allows local spending authority for a locally funded class for which local employers would pay 100 percent of the costs in 2018.

More details about the Senate and House’s budget proposals are available on AWC’s Budget summary chart and through the state’s budget page.