On December 17, Governor Inslee released his three proposed budgets: operating, capital, and transportation. His operating budget proposal is approximately $57.5 billion and relies in part on $1.3 billion in new revenue. The new revenue comes primarily from a capital gains tax and a tax on health insurance premiums. It seems unlikely that the Legislature will adopt these revenues as proposed, but we do expect to see new revenue options in future legislative budget proposals.

The budget proposals come at a time when revenue projections are about $3.3 billion less than they were in February, pre-pandemic. While the revenue forecasts continued to recover from the devastating projections in June, there remains a great deal of economic uncertainty regarding long-term impacts and higher unemployment.

AWC communicated cities’ budget priorities to the Governor. The Governor’s budget proposals include several areas with good news for cities, but there are other areas where more work is needed to ensure full funding. While the Governor’s budget proposals serve as a starting point for the discussion, the House and Senate will each draft their own versions during the upcoming session.

For more detail on the Governor’s budget proposals impact to AWC’s policy priorities, visit our recent budget alert article. Also check out AWC’s budget matrix, which highlights key funding impacts for cities.

Dates to remember

The House Capital Budget Committee will discuss the Governor’s 2021-23 biennial budget and 2020 supplemental budget proposals on January 14 at 8 am.