This Washington

The Budget Deal by the Numbers

Democrats lose tax loophole fight, but win on funding programs.

By Josh Feit June 28, 2013

Democrats say the budget they're set to approve today, after two special sessions and months of fighting with the Republicans, is similar to the original Democratic budget proposal in April.

"The only difference between this and the budget the house passed months ago is where the money comes from," Democratic budget finance chair Rep. Ross Hunter (D-48, Medina) told Fizz.

That's not exactly true. The spending levels are lower. 

The Democrats had initially pitched $76.9 million in early learning and child care funding, for example, and the compromise budget spends $30 million less. They had initially pitched spending $73.6 million on higher ed financial aid and the final deal spends $55 million less. And they had initially proposed spending $1.2 billion on K-12 to meet the Washington State Supreme Court's McCleary mandate and ended up with $250 million less.

But there is a notable win here for the Democrats.

Compared to the Republican-controlled senate proposal, the Democrats did move the needle, either stopping outright cuts (to the Working Connections program, for example, which funds child care for low-income working parents) or pushing the expenditures north. For example, the early learning and child care line item went up to $45.9 million from the senate's proposed $24.9 million, and the K-12 spend went from $890 million to $950 million. Oh, and the Republicans didn't earmark any money for the higher education state need grant, while the Democrats budgeted $28.9 million for it. The Republicans also proposed cutting $21 million from a substance abuse program. The Democrats kept the money in.  

The difference—both the scaled-back expenditures from the Democrats' April proposal and their win over the Republicans' smaller dollar amounts (mostly on the human services side)—is explained by a Republican win: As Hunter groused, the GOP prevailed on where the money comes from.

The Democrats' initial budget came with $500 million in additional revenue from closing 15 tax breaks plus about $700 million from extending B&O taxes and a beer tax.

They shelved most of that plan—though they did close two tax loopholes in the end, a tax break for landline phone companies and a tax break on estates for wealthy married couples. Instead, the final budget deal relies on the following revenue sources:

$617 million in cuts; $387 million in transfers from the capital construction budget; $114 million in other account transfers; $351 million in federal money for Medicaid expansion; and the perennial suspension of I-732 (a cost-of-living pay increase for teachers) for $320 million.

There was also $91 million in reduced social service caseloads, which doesn't show up on the revenue side, but shows up as cuts in spending even though it is not a reduction in service. And—ha!—the Republicans snuck in more tax breaks for a loss of $11 million. (Carryn will have a report on those.)

(Footnote: And a ha! back at the Republicans from the Democrats. The Democrats killed a Republican proposal for a tax—a surcharge on foreign college students. "It’s gone. No international student surcharge (tax!)," says UW lobbyist Margaret Shephard, who lobbied against the bill.

In the end, what the budget deal looks most like is the scaled-back Democratic proposal from early June, which still spent more than the Republican proposal.

For example, the Democrats' scaled-back proposal put $52 million toward early learning and child care while the senate's earmarked $24.9 million. The final number? $45.9 million. The Democrats proposed spending $171 million on long term care and mental health vs. the senate's $152 million. The final number? $170.5 million.

The Democrats also proposed far fewer cuts to the general human services budget (the numbers here are complicated by the caseload reductions, which show up as cuts). In their proposal, the Republicans went above and beyond the caseload savings in cutting programs such as Assistance for the Blind and Disabled ($102 million in cuts vs. the Democrats' $15 million), while also proposing cuts to a series of other programs, including $21 million in cuts to a welfare to work program (compared to the Democrats' zero cuts).

In the end, the final dollar figure in cuts came to $174 million (including savings from caseload reductions). That number compares to the GOP pitch for $281 million in cuts vs. the Democrats' $139 million in cuts.

Once line item that did go in the Republican direction? The environment. The Democrats proposed cutting $21 million. The Republicans proposed cutting $51 million. The final cut? $45 million.

Lefty advocates don't want to go on the record for fear of seeming too happy with the deal, but they seem to think they won on most counts.

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