Supplemental budget updates with some twists and turns

Last week, we published our analysis of the Legislature’s proposed supplemental budgets. Since then, the House and Senate have adopted a number of amendments to their budgets.

The supplemental budget process this year has been rather unique.

First, the Legislature was fortunate that a revenue forecast provided more than $600 million in additional revenue. That, combined with lower-than-expected costs from the caseload forecast, means that they have quite a bit more room in the budget. However, the desire to spend those funds is offset by concerns about the ability to sustain that level of spending in the future.

Additionally, a late twist came when the Boeing Company asked the Legislature to repeal an aerospace industry tax break, which potentially means more revenue for the state. Boeing is facing potential penalties from the World Trade Organization (WTO) and additional tariffs, so they asked for the tax to be repealed with a “snap-back” provision to reinstate the tax, should the WTO case be resolved. There is some pushback on inclusion of an automatic snap-back for the tax exemption. Budget leaders are also arguing that they shouldn’t rely on the revenue from repealing the tax break in the supplemental budget – that potential revenue is estimated at around $300 million.

Finally, the Legislature has upended the typical process. Usually, the House would introduce its proposals first, followed shortly thereafter by the Senate. This year the Senate actually released its capital budget early with most of the other budgets being introduced simultaneously. That meant action on the various proposals followed in rapid succession throughout last week.

Needless to say, avid budget trackers throughout Olympia spent the better half of a week disseminating and reporting on a whirlwind of budgets!

Operating budget proposal

• The Senate supplemental operating budget passed the chamber and was amended by the House to reflect the House’s supplemental budget proposal.
• The Legislature will continue using SB 6168 moving forward for the operating budget.

Capital budget proposals

• The Senate supplemental capital budget passed the chamber on February 26.
• The House supplemental capital budget passed out of committee and is awaiting further action by the full House.

Transportation budget proposals

• The House supplemental transportation budget passed the chamber on February 28.
• The Senate supplemental transportation budget is in the Senate Rules Committee.
• For a rundown of the transportation proposals check out this week’s article.

Budget writers are now poised to negotiate the final version of the three supplemental budgets. AWC sent a letter to the budget leaders last week highlighting the items that are priorities for cities. Please feel free to share this letter with your local legislators and discuss how these budgets impact your city.

The Legislature’s supplemental budget proposals include a variety of expenditures that impact cities. See AWC’s detailed budget matrix that compares the budgets line-by-line.

We will continue to provide updates as new information becomes available.