Olympia Update

OLYMPIA–When the Legislature convened last year for the 2020 session, our economy was healthy and increased tax collections gave our state a surplus of about $2.3 billion. Over objections from Republicans who wanted to provide property tax relief, the majority party in Olympia spent this surplus on growing the size and scope of government.

However, before the ink was dry on our state's new two-year spending plan, lawmakers were going home to a state – and country – that was just beginning to feel the severity of the COVID-19 pandemic.

As Gov. Inslee shut down our economy, businesses closed, workers went weeks and months without paychecks, and our state economy suffered dramatically and quickly; unlike anything we'd ever seen.

It was so bad that the June Revenue Forecast estimated a budget shortfall of over $10 billion! Republicans in both the House and Senate began calling for an immediate special session to address our spending issues.

We began a months-long endeavor of going over every agency, line-by-line, practicing a "zero-based" budgeting process. Starting from scratch – from a "zero base" – is not something that is done often, if ever, in state government. If an agency spends "x" amount one biennium, the expected allocation for the following biennium is usually just "x plus inflation plus population growth," or something like that.

Rarely if ever, do agencies go over their budgets line-by-line and justify each program based on the expected outcomes. If we never do that, how do we know state government is working? How do we know if its efficiently and wisely spending hard-earned tax dollars? The answer is, we don't.

While this exercise was going on, the state economy began to rebound. With federal financial assistance, a strong real estate industry, and businesses slowly reopening, our budget shortfall is now expected to be about $400 million.

While not the proverbial "budget dust," $400 million is doable.

Last week, the House Republican Caucus released one of the first budget proposals of the 2021 session. The zero-based budgeting was used to capture savings by eliminating unnecessary bureaucracy, inefficient structures and programs that don't improve outcomes, and cut large agency middle management by about 10%.

We propose merging one underfunded pension system into an overfunded pension system to create an adequately funded system that will save millions with no reduction in promised benefits.

We curtail financial aid to out-of-state and affluent students and restore student-to-administration ratios to pre-COVID numbers.

We combine the anti-tobacco and anti-marijuana campaigns, use federal dollars and dedicated accounts to pay for programs, and tap into the state's rainy day fund for about $1.8 billion to pay for one-time COVID related expenses and investments.

Through all of this, we remained focused on the priorities of working families, growing students, vulnerable people, and small businesses.

Our budget funds the Working Families Tax Credit for the first time in its 12-year history. We provide a sales tax exemption for basic necessities like prepared food and diapers. We provide $300 stipends to low-income families to defray the costs or remote learning and provide grants and higher rates for childcare providers.

We provide for additional STEM enrollment slots at state universities and community colleges. We increase federal allocations to school districts, contingent upon reopening.

Our budget provides flexible, ongoing homelessness funding for cities and counties that clean up encampments near schools, parks and playgrounds and ban injection sites. We invest in community behavioral health, give rate increases for primary care, and invest more in PPE and infection control.

For small businesses, we mitigate skyrocketing unemployment insurance rate increase, and provide temporary B&O tax relief for restaurants and other hard-hit businesses while allowing property tax and liquor fee deferrals for others.

Finally, our budget fully funds our state's wildfire prevention efforts and maximizes production at state and tribal fish hatcheries to support fish populations.

All of this, with no new or increased taxes on anyone, or anything. Yes, it can be done. And it's important to show the rest of the Legislature how it can be done so we can put to bed the temptation to raise or increase taxes.

I firmly believe now is not the time for an income tax, a carbon tax, a low-carbon fuel standard, or gas tax. Hard working families need to keep more of their money now more than ever.

House Republicans have real solutions and are ready to lend a hand to any final budget proposal. We will work hard to protect your pocketbook, make state government more efficient in the delivery of services, and hold state government accountable.

It will be interesting to see if the majority party makes the same commitment.

(Rep. Joe Schmick, R-Colfax, serves on the House Appropriations Committee)