Accounting gimmick is big part of state House budget moves
House Democrats have proposed bridging the state budget gap largely by delaying certain school payments and making more than $400 million in spending cuts.
Seattle Times Olympia bureau
OLYMPIA — House Democrats proposed a budget Tuesday that closes a $1 billion shortfall without borrowing money or asking voters for a sales-tax increase, but would allow local governments to boost taxes.
Their plan balances the current two-year budget largely by pushing certain payments to public schools into the next budget cycle, reducing funding to local governments and making more than $400 million in spending cuts.
"We've been working on this since October to try to come to a place where we have a budget that really doesn't damage the state over the long run, but gets us through the worst economic downturn since World War II," House Ways and Means Chairman Ross Hunter, D-Medina, said.
However, Rep. Gary Alexander, the ranking Republican on the House Ways and Means Committee, said delaying hundreds of millions in state payments to K-12 schools simply sets the Legislature up for another large shortfall next year.
"They just kind of kick the can down the road," he said.
Hunter acknowledged that there will be a budget shortfall in the next biennium, but said it's not clear how large it would be under the House proposal.
Senate Democrats are expected to release their budget next week, and then both chambers, along with the governor, will craft a compromise. The legislative session is scheduled to end on March 8.
The lawmakers' job was made easier with the unexpected news last week that a combination of reduced demand for state services and a slight uptick in tax collections had reduced a $1.5 billion shortfall closer to $1 billion, depending on how much money is left in reserves.
House Democrats are proposing to leave around $500 million in reserves to handle unexpected problems, such as another recession. Gov. Chris Gregoire has said she wants more.
Although the House plan balances the budget without asking voters for a sales-tax increase, Hunter did not rule it out. No decision has been made yet, he said.
The biggest moves in the budget are essentially accounting gimmicks. House Democrats propose delaying a June 2013 K-12 payment until July 2013, which puts the expenditure into the next two-year budget cycle. They also would delay levy-equalization payments — money that supports "property-poor" districts — in a similar fashion.
Combined, the delayed payments push about $405 million in spending into the next budget.
Hunter said it's not something they want to do, but the move causes no harm to K-12 budgets and the alternative is much worse. "If we were to take another $300 million out of our higher-education budget I think we'd have a much worse outcome for the state," he said. "We're trying to balance out a set of choices."
Alexander noted the House Republicans released their own proposal last week that balances the budget without delaying payments to schools.
That proposal, however, would eliminate the state Basic Health Plan, which provides health insurance for the poor, and Disability Lifeline, a program that aids unemployable adults who aren't covered by federal Social Security benefits. House Democrats keep both programs.
The Democrats' budget also would permanently reduce certain state distributions to local governments by $81.6 million, including support for criminal-justice programs.
However, House Democrats would give local governments more taxing authority to offset the cuts if they want. For example, large counties could increase the local sales tax by one-tenth of a cent without voter approval. Counties with fewer than 250,000 people could increase the sales tax by two-tenths of a cent.
Hunter said the state, over time, has helped fund a variety of local government services.
"So you have to say, 'Is this your responsibility or is this our responsibility to do?' " he said. "We're saying we can't afford to do that."
In terms of spending reductions, health care and human services would take the biggest hit with cuts of around $222 million, including a $26 million reduction for mental-health programs and a $91 million cut to social services for low-income residents, mostly in the Temporary Assistance to Needy Families program.
Another $169 million would come from a broad swath of programs including the state Department of Corrections and the Washington State Patrol.
Proposed cuts to K-12 schools and higher education are far smaller than what was being considered earlier in the session.
The budget mentions a $9.2 million net K-12 cut, most of which comes from reductions to the National Board for Professional Teaching Standards bonus program.
It also includes a net cut of $51 million from higher education and another $10 million reduction to the state Need Grant.
Western Washington University President Bruce Shepard, in an email said the cuts "will still leave us with only unpleasant options."
Western would lose $2 million under the proposal, in addition to the $38 million already cut from its budget for the 2011-13 biennium. Some of the cuts being considered at Western include eliminating academic programs, cutting colleges and admitting more out-of-state students.
This story contains material from The Associated Press.
Andrew Garber: 360-236-8266 or email@example.com