Last week, the Legislature released its biennial operating, capital, and transportation budgets. Although the transportation sector has yet to recover from the economic impacts of the pandemic, the operating and capital budgets are based on a strong economic
forecast that signals economic recovery and incorporate federal relief from the American Rescue Plan (ARP) Act.
AWC has communicated with legislators and budget leaders in support of our six budget priorities, many of which are reflected in the proposed budgets. Read our proposal compairson budget matrix for more details on key city budget items.
Operating budget
Both the House and Senate operating budgets incorporate monies from $4.25 billion in federal assistance targeted for the state, including funding for school reopening, vaccine deployment, childcare grants, and individuals and families impacted by COVID-19.
House operating budget
The House operating budget appropriates $58.3 billion for the 2021-23 biennium.
The budget assumes a transfer of $144 million from the Public Works Trust Fund (PWTF) to the state general fund, and $357 million in capital gains tax revenue (assuming passage of SB 5096). Much of the projected capital gains revenues are placed in a newly created Taxpayer Fairness Account. More highlights from the House operating budget proposal include: - City assistance:
- $58 million for cities and $86 million for counties to address costs related to legislation passed in 2020 and 2021. There aren’t many details yet, but we know the city assistance money would be distributed based on population
for Growth Management Act (GMA) planning and police reform costs associated with recent legislation.
- State-shared revenues are funded at expected amounts.
- Human resources:
- $200 million for a temporary expansion of Paid Family Medical Leave (PFML) eligibility to help families impacted by COVID-19.
- Transfer of $600 million from the LEOFF 2 pension fund to the LEOFF 2 Benefit Improvement Account to fund additional benefits.
- Law enforcement:
- Funding for 15 Basic Law Enforcement Academy (BLEA) classes, and funding related to House-sponsored police reform proposals, including $609,000 to develop a use of force model policy and $111,000 to develop model policies for
use of police tactics and equipment.
- Housing stability:
- $1.1 billion for rental and utility assistance.
- $187.2 million for foreclosure prevention assistance.
- $35 million for grants to local government to increase shelter capacity.
| Senate operating budget
The Senate operating budget totals over $59 billion in the next biennium.
The Senate budget also relies on the passage of SB 5096, which would create an additional $357 million through the addition of a capital gains tax. Additional highlights include: - City assistance:
- State-shared revenues are funded at expected amounts.
- Human resources:
- $200 million from federal stimulus for a temporary expansion of PFML eligibility to help families impacted by COVID-19.
- Law enforcement:
- Funding for only 12 BLEA classes.
- Includes funding for Senate-sponsored police reform proposals. $4.5 million for managing state oversight and accountability of law enforcement and creating a new process for decertifying police officers. $920,000 for developing
training for police officers and their duty to intervene.
- Housing stability:
- $495 million for rental and utility assistance.
- $200.7 million for foreclosure prevention assistance.
- $35 million for grants to local governments to increase shelter capacity.
- Utility assistance:
- Provides $80 million for energy assistance, managed by Department of Commerce
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Capital budget
House capital budget
The House capital budget authorizes roughly $5.7 billion in spending for
the 2021-23 biennium, including $3.5 billion in bond proceeds, $589 million in federal stimulus funds, and $273 million in Model Toxic Control Accounts. The House budget re-appropriates nearly $4.5 billion, of which $2.9 billion
is financed with bonds for previously authorized capital projects. Finally, the House proposal reduces appropriations and re-appropriations by $35 million in the 2019-21 biennium. Notable appropriations include: - $227 million for the PWTF with most of the funding from federal relief monies;
- $125 million for broadband funding programs;
- $75 million for stormwater grants;
- $26.8 million for the Fish Barrier Removal Board;
- $175 million for the Housing Trust Fund;
- $50 million for rapid housing acquisition grants for shelters, transitional low-income housing, or permanent supportive housing; and
- $35 million for utility improvement or connection grants to support affordable housing.
| Senate capital budget
The Senate capital budget authorizes approximately $6.2 billion in appropriations.
It includes $668 million for local government infrastructure, $315 million for affordable housing loans and grants, $209 million for local and community projects, and $65 million for clean energy, energy retrofits, and weatherization
projects. Other highlights include: - $110 million for the PWTF from traditional funding sources including past loan repayments;
- $480 million for broadband funding programs;
- $75 million for stormwater grants;
- $38.5 million for the Fish Barrier Removal Board;
- $205 million for the Housing Trust Fund;
- $90 million for rapid housing acquisition grants; and
- $10 million for planning grants to provide upfront environmental analysis for transit-oriented development.
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Transportation budget
The House and Senate Transportation Chairs released their respective budget proposals shortly after the March 17 revenue forecast which showed the devastating impact of the COVID-19 pandemic on the transportation sector. Both proposals incorporate
$1 billion in federal funds from the recently passed ARP Act to backfill what would otherwise have been a significant shortfall.
Senate Transportation Committee Chair Steve Hobbs’ (D-Lake Stevens) proposal totals just over $11.7 billion in appropriation authority and includes $5.8 billion for capital programs and $5.9 billion in operating expenditures.
House Transportation Committee Chair Jake Fey’s (D-Tacoma) proposal totals nearly $11 billion and reflects several new legislative and Governor priorities and emerging themes of diversity, equity, and green transportation investments.
Visit our transportation budget analysis article for more information.
What the budget proposals mean for cities
City priorities fared well in the various proposed budgets. We particularly appreciate the House’s approach of sharing $58 million with cities to address costs of new mandates related to legislation. Additionally, it appears both the House and
Senate recognize the need to support cities’ infrastructure needs.
Over the next few weeks, legislative leaders from the House and Senate will negotiate a final budget for adoption prior to the end of session on April 25. It is critical that cities continue talking to legislators about the importance of maintaining
investments in city programs so that they are included in the final budget.
It is critical that cities continue talking to legislators about the importance of maintaining investments in city programs so that they are included in the final budget.
A few key messages to share with your legislators:
- Retain key funding for the PWTF to support local infrastructure needs. Infrastructure is an eligible use of federal relief funds and helps with economic recovery while providing long-term economic and environmental benefits.
- Recognize the impact of new legislative mandates and support the city assistance fund identified in the House budget. This will help cover the costs of new GMA planning requirements and new law enforcement responsibilities related to police reforms.
- Fully fund the necessary law enforcement training by providing for 15 BLEA classes.
- Support the investments in housing and rental assistance to reduce housing instability. Additionally, support funding for utility assistance to address the unpaid utility accounts that have accumulated during the emergency shutoff moratorium.