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. 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.
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.
Check out AWC’s budget matrix,
which highlights key funding impacts for cities.
State-shared revenues: The Governor’s proposal leaves existing funding levels intact for revenues shared with cities, including liquor profits and taxes. AWC asked the Governor to increase the amount
of marijuana revenue shared with cities to meet the Legislature’s commitment in 2015, but the proposal again fell $10 million short of what was promised.
Public Works Trust Fund (PWTF): The Governor’s budget funds the PWTF at a record level—$160 million—the largest appropriation since the McCleary Decision in 2012. The caveat is that program
funding relies on the addition of $1.25 billion in state bond capacity, as traditional cash revenue sources were diverted to the general fund.
Broadband: The Governor’s proposed budget includes almost $100 million of new funding directed to broadband infrastructure. This includes $45 million allocated to the Public Works Board’s broadband
program and dedicates equal funding for loans, grants, and state match of federal funds.
Basic Law Enforcement Academy (BLEA): The proposed budget includes funding for five additional BLEA classes for a total of 15 per year. This is less than the current number and assumes cities will hire fewer officers
during the next two years.
Culverts:
The proposed budget provides $39 million to the Fish Barrier Removal Board to help fund local culvert replacement projects.
Housing: The budget includes $164 million for rent assistance and $17 million for foreclosure-prevention assistance. Additionally, there are funds for emergency and temporary shelter capacity.
COVID-19 response:
A number of provisions in the proposals address COVID-19 response including additional public health funding and business, housing, and food assistance.
Transportation: The transportation proposal includes $672.5 million to correct state-owned fish blocking culverts, consistent with the state’s legal obligation. It also fully funds the Complete Streets
Program. The proposal reduces the Transportation Improvement Board’s budget by about $20 million primarily due to decreased gas tax funds.
More details about the Governor’s budget proposals are available through the Office of Financial Management’s budget page.
Key messages to share with your legislators about cities’ budget priorities
As legislators convene for the legislative session on January 11, they will begin working on their own budget proposals. Make sure your local legislators understand what cities need out of the state budgets. Share these city budget priorities with them:
- Fully fund state-shared revenue distributions for cannabis, liquor, and fire premium taxes as well as the criminal justice assistance distributions. Increase cannabis revenue sharing to $40 million to fulfill the Legislature’s
promise from 2015.
- Fully fund the Public Works Assistance Account (also known as the Public Works Trust Fund) and do not divert funds away from nontraditional infrastructure.
- Make additional investments in housing stability with rent and mortgage assistance.
- Fund a watershed approach to correct fish-blocking culverts by fully funding the Fish Barrier Removal Board’s request to address locally owned culverts.
- Provide adequate state funding for mandated police training aimed at improving police departments’ ability to protect and safely interact with all Washingtonians. Additionally, fully fund the Criminal Justice Training Commission (CJTC) to ensure all newly hired law enforcement officers and corrections officers have timely access to basic training.
- Fund necessary transportation resources for cities through direct distributions, local projects, and agencies such as the Transportation Improvement Board (TIB) and the Freight Mobility Strategic Investment Board (FMSIB).
Congress passes federal COVID-19 relief package
On December 21, Congress reached a deal on a new stimulus package addressing the ongoing COVID-19 pandemic. Unfortunately, direct flexible funding for local governments did not make it into the final bill. However, it contains funding for several programs
benefiting residents and businesses. Read our breakdown of what’s included in the final package.
Stay tuned to Legislative Bulletin on Mondays starting January 11 for weekly updates on budget and policy issues that impact cities.