This Washington

State House GOP Offers $1.6 Billion Budget Proposal

By Josh Feit February 17, 2012

State House Rep. Gary Alexander (R-20, Olympia), the ranking Republican on the house ways and means committee, has offered, he says, a "contrast" budget proposal in anticipation of what the Democrats will propose next week.

Alexander says he had "great respect" for ways and means committee chair Rep. Ross Hunter (D-48, Medina), but adds: "Our approaches and our desired outcomes were too far apart. Today’s budget is to provide a contrast—a different set of priorities—so the public can see a different way to handle the problem."[pullquote]"Our approaches and our desired outcomes were too far apart."—Republican Rep. Gary Alexander.[/pullquote]

The "problem," of course, is an approximately $1 billion shortfall. (Initially, after the dour September revenue forecast, the state was looking at a $1.4 billion shortfall for its $32 billion 2011-13 budget passed just four months earlier. And actually, that $1.4 billion hole was a $2 billion problem–because everyone agreed that the state needed to keep about $500 to $600 million in reserve.)

After the the legislature passed about $450 million in cuts and savings and transfers during December's special session; and after caseloads dropped, saving  $340 million; and after the latest revenue forecast put $45 million back into state coffers: The $2 billion got scaled back to about $1 billion.

Alexander's $1.6 billion plan proposes about $840 million in cuts (leaving $650 million in reserve) plus other savings including fund transfers and repealing some tax exemptions to fill the gap that existed after the special session (their budget had already anticipated reductions in caseloads).

Alexander and the house Republicans are the first of the four caucuses to come out with a budget plan since Gov. Chris Gregoire released her $2 billion all-cuts plan in November.

The big difference between Alexander's proposal and Gregoire's is that the house GOP fully funds K-12 education, budgeting $580 million more than the governor. (Gregoire had proposed cutting $334 million, including reducing state levy equalization money to poorer school districts by $150 million.)

In order to spend more on K-12, Alexander's proposal reduces the Department of Ecology by 14 percent and eliminates all general fund dollars for the Puget Sound General Partnership, reduces the state contribution to state employee benefits from $850 to $800 a month (the governor proposed lowering it to $825), ends funding for the Basic Health Plan (health insurance for the poor), and reduces health care eligibility for children of undocumented parents from 200 percent of the federal poverty level to 133 percent. The proposal would also reduce the funding to the Temporary Assistance to Needy Families program (TANF).

Of course, Gregoire's budget proposal also decimated social services, including eliminating the Basic Health Plan. But she proposed buying $42 million in services back with a temporary sales tax increase. The Republican plan does not propose a sales tax increase.

And here's a surprise: Like the governor (Austin Jenkins broke the news earlier this week), the Republicans also proposed repealing the $20 million tax exemption for big banks on interest earned on first mortgage loans. The Joint Audit Legislative Review Committee (JLARC)—the committee tasked with assessing tax breaks—had raised serious questions about the bank loophole and the Democrats have been denouncing the exemption for years. Alexander's budget also follows some other JLARC recommendations, such as doing away with a tax break for renewable energy and a loophole for companies that try to register out of state to avoid B&O taxes.

In another surprise, at least to conservatives at the Washington Policy Center,  Alexander's plan would fully fund I-1163, the Service Employee International Union's 2011 initiative to upgrade health care worker training. Republican opponents (and the governor herself) had complained that it was an unfunded mandate. The governor, though, also funded it in her budget.

Alexander's counterpart, Democratic Rep. Hunter, was reluctant to comment on Alexander's budget, saying "let him have his press today." However, he added: "Putting out a budget involves more than just making a political statement about what you think is important, it involves getting 50 votes. Well, he doesn't have 50 votes. I don't think he even has 40. And that's not going to pass. I have to get to 50."

Hunter says he will be glad to offer his critique of Alexander's budget next week when he unveils his budget. "I'll be happy to talk about how mine is different then," he says.
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