The story so far this legislative session in Olympia has been largely focused on how the Republican-dominated Majority Coalition Caucus is running the show, as they've framed debate around their fiscally conservative agenda. But the narrative was disrupted on Wednesday, when Rep. Ross Hunter (D-48, Medina), the lead budget writer in the Democratic controlled house, laid out his no-nonsense thoughts on the budget and taxes at the Economic and Revenue Forecast Council press conference. The state has a $1.3 billion shortfall as well as a court mandate to add about $1 billion to $1.4 billion to K-12 education.
To the often-heard GOP claim that the state should simply budget like a household, Hunter described how that might sound easy, but what does it mean when we (the state-household) had new baby and grandma came to live with us. Maybe we received a cost-of-living raise, but healthcare premiums have continued to go up, so we're faced with deciding how to handle all of those costs. We got a hint that Hunter, typically an outspoken legislator who'd been oddly quiet most of the session, was gearing up to push back against the Republicans late last week when he ridiculed their K-12 funding plan.
This week, with the budget wars officially underway, Hunter reemerged. Loudly.
I talked with Hunter over the phone during his lunch break Thursday, when he had just a few minutes to chat in between calls with other legislators and an afternoon meeting. Here’s what he had to say.
PubliCola: When you're calling for new revenue with a Republican-controlled Senate and a governor who campaigned on no tax increases, what are you looking at specifically?
Rep. Hunter: (Rep.) Andy Hill (R-45, Redmond) and I meet at least once a week and often more than that. We have breakfast on Friday at 8 a.m. We're not doing negotiations on budget proposals, but we are working out details on specific items that we both believe will be in our budgets. That includes the hospital safety net assessment. [Editor's Note: The Hospital Safety Net Assessment is a tax on operations that hospitals agreed to in 2009, when Medicaid reimbursement rates were cut. The tax helps the state capture additional federal matching funds, but it's scheduled to expire, which would create a $275 million hole in the budget.]
One piece of tax policy that accidentally raises money is the telecommunications tax fairness [proposal]. It's a deep problem in how we tax telecom. We have an $800 million lawsuit hanging over our heads and just have to fix it. [Olympia can bring in $80 million by getting rid of a tax break for landline users that isn't awarded to cell phone companies. Sprint sued and Verizon is about to].
Also, the Medicaid expansion—the Senate is likely to include that in their budget. [Medicaid expansion brings in about $140 million in the next biennium. —Eds.]
PubliCola: How much are you in agreement on with Hill?
Rep. Hunter: We're in agreement on programs that total in the hundreds of millions of dollars. We are in agreement that we'd rather figure those details out now than in the final week of session during back-and-forth negotiations. [Josh wrote about their disagreements earlier today.—Eds.]
PubliCola: The House Republicans released their education funding plan last week. You're not a big fan.
It's an illustration of how hard it is to write a budget without additional revenue
Rep. Hunter: I'm not a huge fan. It has some obvious problems, and it's an illustration of how hard it is to write a budget without additional revenue. The usable reserves in the proposal are $9 million. Anything beyond that requires a 60 percent vote and the Legislature to be in session. That is 0.03 percent of the budget. That means not even a large wildfire, but just a forest fire bumps you into the negative. You have a structural budget problem here that is unacceptable. No rational budget writer is going to leave $9 million in reserves.
Then, $160 million comes from hoping agencies will spend less than we allocated them. Those are called reversions, and they happen every cycle. But sometimes agencies need more than we've given them, and you need that cash on hand.
It also depends on $100 million from unspecified "efficiencies." If you're going to make a cut, you have to make a cut.
His plan for all-day Kindergarten really sounds attractive, but what he fails to understand is that the court said not just that you have to give enough staff to K-12 to deliver on your responsibility, but you have to give enough money to hire those staff. That adds $600 or $800 million to the eventual cost of the program. Thirty percent of education costs are paid by local taxpayers. He actually goes and makes that problem worse because of the way he chooses to fund this. He is either unable or unwilling to understand how school money actually gets spent on the ground.
Now, add up the gimmicks, the shifts, the magic cuts, all those things that don't happen, and these make the budget unsustainable. They're not "regular revenue," it's one-time money, and that means you get a budget that just gets worse and worse over time. They've hammered me on this in the past, but he's authored these ideas.
And even still, he doesn't fund proportionally on the McCleary case. He's pushing $2 billion into the future -- after this budget, there's only 3 years to come up with the rest. That's pushing a lot of cost into the future and pulling revenue from the future into this budget.
So, it's not implementable. But I look at that as an illustration for how it's not possible to build a real budget without additional revenue.
The court is saying that the state has to pay for basic education. They developed that idea at great length in the McCleary decision. But right now, we're requiring local taxpayers to pay the cost of basic education.
PubliCola: You’ve previously pushed for a levy swap. [Local property levies account for about $3.6 billion of the $18 billion spent of K-12 education. Hunter had proposed having the state relieve local jurisdictions by taking over the taxes, which, he argued, would stabilize the funding. Here's some of our coverage of the proposal.—Eds.]
Rep. Hunter: Oh, yes. There are legislators who think that's a good idea. As I've said a levy swap is the best bad idea or the least worst bad idea that we have. The court is saying that the state has to pay for basic education. They developed that idea at great length in the McCleary decision. But right now, we're requiring local taxpayers to pay the cost of basic education.
The levy swap is one way to resolve that without creating $2 billion of real taxes. When you do it, some wind up paying a little more, some pay a little less. But it's a politically difficult topic. You can write really difficult campaign pieces about this. There are people who spend a lot of time thinking about the politics of decisions, and this one has some painful optics. I think it's a reasonable decision and my Republican counterpart, (former Ridgefield Sen.) Joe Zarrelli thought so as well. If it comes up, it comes up. I think it will be hard to decide the entire McCleary funding problem without doing something like it at some point.
PubliCola: But is that viable, given that Gov. Jay Inslee was elected after almost an entire year of campaigning against the levy swap?
Rep. Hunter: It makes it more difficult. You need 76 votes to pass a budget: 50 in the House, 25 in the Senate and the governor's gotta sign it. He expressed some dislike during the campaign and the guy won.
PubliCola: So if that's not viable, what is?
Rep. Hunter: We're looking at everything now. The trick is to find the intersection of what we think we can get the votes for, what the governor would sign and, if someone to put it on the ballot as an initiative, would be sustained by the people. Most people don't want to raise taxes, but they also want to meet our Constitutional obligation.
There's another thing—right now, if your mother-in-law is being abused in a nursing home, it takes 90 days after you report it for someone to even look at that piece of paper. This is a result of us cutting staff. Fewer people are working for us today in General Government than 10 years ago, even as we have more people living here. I think people want us to respond more quickly. We have the same problem in children's services. If you don't deal with those problems, you have a budget that doesn't work. It makes a political statement, but it's not a functional document.
PubliCola: Any chance you can sort this all out in time for the scheduled end of session?
Rep. Hunter: Who knows. I have built a schedule that would mean we adjourn on time, but it depends on a number of things, most of which are fantastical.
For the session's previous Capitol Newsmakers of the Week start here . Not that we're keeping score, but the tally so far is five Democrats to five Republicans. (We didn't award a Newsmaker of the Week for Week six—and Week nine was a tie.)