Senate passes $43 billion state budget proposal

OLYMPIA, Wash. -- The Senate on Friday passed a $43 billion two-year state budget proposal that relies, in part, on a statewide property tax earmarked for education, while also making cuts to some social services.

The spending plan, which cleared the Republican-led Senate on a 25-24 vote after a multi-hour, middle-of-the-night debate, would raise property taxes for some, while lowering taxes for others in the state. House Democrats are set to release and pass their own budget proposal next week, and then both chambers will begin the work of negotiating a final compromise that must satisfy a state Supreme Court mandate on education funding.

If lawmakers are unable to complete their work by the time the current 105-day legislative session ends April 23, they'll have to go into overtime sessions, something they have had to do frequently in recent years.

Republican Senate Majority Leader Mark Schoesler called the budget plan "a great starting point."

"This budget makes an unprecedented investment in K-12, despite what some would say," he said.

Democrats argued the budget did not go far enough on education, and Senate Democratic Leader Sharon Nelson said that the plan "does not reflect our values."

"We can do better than this," she said.

The Senate plan, which puts an additional $1.8 billion toward education, rejects the tax ideas put forth in Democratic Gov. Jay Inslee's budget proposal in December. Inslee had sought money for education by increasing business taxes on attorneys, real estate agents and others, instituting a carbon tax and levying a 7.9 percent capital gains tax on the sales of stocks and bonds above a certain threshold. Democrats in the House, who are expected to release their revenue package on Monday, have not yet said what taxes they will propose, but have consistently said that additional revenue would be needed.

Republicans tried to force Senate Democrats to take a vote on the capital gains tax after passage of the budget, making a motion to pull that bill to the floor just after midnight. Republican Sen. Joe Fain, the chamber's floor leader, said the vote was needed to see what taxes Democrats were willing to support in order to pay for the extra costs they wanted in the budget.

Democratic Sen. Marko Liias called it "an embarrassing stunt in the middle of the night."

Ultimately, the motion failed and the Senate adjourned until Monday.

Lawmakers are working to comply with a 2012 state Supreme Court ruling that they must fully fund the state's basic education system. The state Supreme Court has said that the state has until Sept. 1, 2018 to fully fund education, but that the details of how to do that — as well as how lawmakers will pay for it — must be in place before the Legislature adjourns this year.

Lawmakers have already put more than $2 billion toward the issue since the ruling, but the biggest piece remaining of the court order is figuring out how much the state must provide for teacher salaries. School districts currently pay a big chunk of those salaries with the local property-tax levies.

Under a bill that previously passed the Senate — and which would be subject to voters' approval in November — the new property tax rate proposed by Republicans would replace local school levies with a statewide uniform rate dedicated for schools. It would be transitioned in starting next year, but would not be fully implemented until Jan. 1, 2019.

The plan would raise the local school levy in some places, such as Seattle, and decrease it in others, though in the current budget plan Republicans lowered the tax rate to $1.55 per $1,000 of assessed value from the $1.80 originally proposed.

About half of the more than 20 additional amendments debated on the floor were rejected, including an effort to restore funding to the temporary assistance for needy families program, which sees a cut of $96 million under the budget, including $1.2 million from requiring applicants to the program to search for a job before applying for benefits. Another rejected amendment would have frozen undergraduate tuition at the state's college and universities for the next two years.

But the chamber accepted several floor amendments Thursday night, including one that restored $1 million a year in funding to a program that links homeless students and their families with housing.