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Final Budget Makes Progress on Community Investments – for Now

Posted by Kelli Smith at Jul 21, 2017 06:20 PM |
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Washington state lawmakers have enacted a two-year budget that makes some strong community investments now, with plans for more of the same in the future. There are definitely some things in this budget to like: the historic paid family and medical leave program that will support families; the approval of collective bargaining agreements for the front-line workers who keep the state running smoothly; and investments in K-12 schools that will put much-needed resources into classrooms. And even though lawmakers failed to make significant progress in some areas of the budget, they did avoid making the draconian, harmful cuts that the Senate Republicans proposed earlier this year.

But because the budget relies on a short-sighted revenue plan and an assortment of one-time actions, like temporary fund shifts and tapping the state rainy day fund, these heightened   investments aren’t guaranteed to survive in the long term. Lawmakers must enact stronger revenue reforms in order to maintain the necessary investments in our state and our communities when they meet again in two, four, or ten years to write future budgets.

The changes to funding levels in the enacted 2017-19 state budget, broken down by the value areas in the Budget & Policy Center’s Progress Index framework, are detailed in the chart and sections that follow.

Click on graphic to enlarge.  

Final_budget_change_from_maintenance


COMMUNITY DEVELOPMENT & TRUST

To create thriving communities, Washingtonians should be able to count on having safe neighborhoods, beautiful public spaces to enjoy, and a state government that represents residents fairly and efficiently. The state budget accomplishes these goals by supporting Washington’s essential state workers, investing in our public spaces, and ensuring equal access to public institutions. Lawmakers increased funding in this area by $730 million, an increase of 12.1 percent. The budget: 

  • Values essential public workers. The final budget agreement ensures that the thousands of essential front-line workers in Washington, such as public health nurses, law enforcement officers, and long-term care providers, will be compensated according to the bargaining process established in our state. Lawmakers also maintained health insurance coverage for most public employees, including nurses at state hospitals, social service and public safety workers, and home care workers. It’s crucial that front-line workers have stable jobs that can support them and their families. The fact that lawmakers honored a fair and transparent process for compensating state workers also fosters trust in state government. Funding these agreements was a good move on lawmakers’ part.
  • Increases access to legal aid for Washingtonians with low incomes. The budget includes funding for 15 new civil legal aid attorneys over the next two years. This funding will increase access to legal help for low-income people to deal with issues such as job or housing discrimination claims or consumer finance protection. 

ECONOMIC SECURITY

All Washingtonians should have the opportunity to meet their basic needs, to have good jobs that support their families, and to have the chance to get ahead financially. These are the building blocks of thriving communities. When it comes to economic security, this budget made some historic progress. But it also included some disappointing cuts. Overall, the legislature cut investments by $5 million in this area, a decrease of 0.5 percent from current spending levels. The budget: 

  • Creates a historic paid family and medical leave program. This legislative session, Washington became the fifth state in the nation to pass paid family and medical leave, a significant step forward for workers and families across the state. The new program will make it possible for workers to take leave to welcome a new child, or to take care of themselves or a family member with a serious medical condition, without losing all of their income while they’re on leave. Countless Washingtonians will benefit from this historic and forward-thinking move. 
  • Helps families with low incomes make ends meet. Policymakers made improvements to WorkFirst, Washington’s assistance and job training program for families striving to move out of poverty, by partially restoring the program’s cash grant – which was cut by 15 percent in 2011 – with a 2.5 percent increase. That’s an additional $15 a month for a family receiving the maximum grant. Lawmakers also doubled the time – from 12 to 24 months – that parents can receive benefits while they’re getting post-secondary education. These are important advances for strengthening the program. However, the budget also called for cutting $36.2 million from WorkFirst and using it for other areas of the budget.
  • Expands options for child care for families with low incomes. The budget includes small increases for child care providers who serve kids in Working Connections Child Care (WCCC) – Washington’s child care subsidy program for families with low incomes. And it honors the collective bargaining agreement for in-home family child care providers, which will help more providers – many of whom are small business owners – keep their doors open and provide care to children across the state. The budget likewise doubles the amount of time at least one parent in the family receiving WorkFirst can stay home with their young children – from the age of 1 year to 2 years. But based on lawmakers’ expectation that this WorkFirst change will mean more parents stay home longer and fewer children need child care, the budget assumes a certain amount of savings. As a result, they cut nearly $15 million from WCCC. Even if these savings are realized, it would be better to reinvest those dollars in WCCC to strengthen it and ensure high-quality care for more families.
  • Postpones progress on addressing intergenerational poverty. The budget included a provision to create a new initiative to address intergenerational poverty, but the governor vetoed the provision because of a technical concern. He directed the Department of Social and Health Services to form a work group to come up with a plan to advance the initiative nonetheless.
  • Invests in collection of better data on children and families facing food insecurity in Washington state. The budget includes a provision requiring four state agencies to start reporting data on Washingtonians participating in federal nutrition assistance programs. This data will provide important information for policymakers to make more-informed decisions and to develop targeted policies to address hunger and food insecurity throughout the state.

HEALTHY PEOPLE & ENVIRONMENT

Washingtonians value access to clean air and water, as well as programs that support their health and wellbeing. The state budget supports these values by investing in environmental protection measures, broad access to health care services, and improvements to the quality of life of all Washingtonians, especially children and seniors. The proposal would increase funding in this area by $729 million, a 7 percent boost. The budget:

  • Invests in important behavioral health and senior services. The budget funds 96 new beds in walk-in centers for individuals in mental health crisis and provides targeted funding to address safety and capacity issues at Western State Hospital. Lawmakers also made crucial investments to strengthen long-term care services for seniors, including wage increases for home care workers and modest increases in reimbursement rates for long-term care providers. However, in the final enacted budget, legislators passed up some important investments that had been proposed in the House’s budget earlier in the session, such as larger increases to Medicaid reimbursement rates for behavioral health. 
  • Moves forward on a smart, big-picture health reform project. Lawmakers moved forward on the Medicaid Transformation Project, an important state-federal partnership that will bring in $1.5 billion in federal funding to improve health care delivery and lower costs for Medicaid. It will also offer cost-effective support for family caregivers and help individuals find housing and employment. 
  • Rejects a major, ill-conceived cut to family planning services. In their original budget proposal this session, the Senate Republicans had proposed a cut to certain family planning services in Washington state by 10 percent. In the final budget deal, lawmakers wisely avoided that proposed cut, opting instead to preserve access to health care for the women and men who rely on these important services. 
  • Establishes a unified Department of Children, Youth, and Families (DCYF). The DCYF will serve as a central agency to improve a broad array of outcomes for Washington’s children, from ensuring they have a safe family environment in their homes to providing them with high-quality early education. The creation of the new department – grounded in prevention, early learning, principles of racial equity, and accountability to child outcomes – is an important step toward improving the lives of Washington’s children and families. 
  • Makes incremental but inadequate progress on public health investments. The budget provides $12 million for foundational public health services, such as preventing the spread of communicable diseases, which are provided by the state Department of Health and county public health agencies. But this amount falls short of what’s needed to meaningfully address health inequities among Washingtonians and to modernize our state’s public health technology and equipment.
  • Changes the way adults on Medicaid access dental services. Instead of going to the dentist and having their fees paid through Medicaid, patients will now be required to use a managed care plan for their dental services. Because lawmakers anticipate that this switch will result in fewer dental-related emergency room visits for Medicaid patients, the final budget assumes $16 million in savings. But given the untested nature of this change, there is reason to doubt that those savings will be achieved. And if they aren’t, that will result in cuts to the program that will restrict access to dental care for people with low incomes. 
  • Maintains and improves some efforts to keep our air and water clean and free of pollution.  But this is done with the help of more than $20 million in unsustainable transfers to a separate account originally devoted to mitigating the spread of toxic chemicals. Additional funding was allocated to implement a new rule requiring oil refineries, power plants, and other industries to curb carbon dioxide emissions responsible for global warming and other forms of air pollution.

EDUCATION 

Funding education – particularly funding K-12 schools and compensating the educators and staff that keep schools running – was the main focus of this year’s legislative session. On that front, lawmakers made significant strides toward meeting their obligation to the Supreme Court per the McCleary decision. But it remains to be seen whether the court will accept their effort as satisfactory. Overall, lawmakers invested an additional $1.8 billion in education, from early learning to higher education, an increase of 7.6 percent from current spending levels. The budget: 

  • Increased funding for K-12 schools. Through this budget, lawmakers invested an additional $1.8 billion in state resources for K-12 schools as follows:
    • Teacher and staff compensation. The majority of new state K-12 spending will go toward increasing the amount of money the state distributes to compensate teachers and staff, as well as reforming the way our state divvies up those resources. The funding plan also includes a major change to how health insurance is provided for teachers and school employees. Essentially, school employees will now bargain their health care at the state level through a statewide coalition of school unions rather than bargaining at the local level. This change will need to be closely monitored as it is rolled out to ensure that health insurance coverage is not compromised. 
    • Enhancements based on the number of students in particular education programs. Under the current school funding model, additional resources are distributed to school districts based on the educational programs kids in the district need. This budget increases the resources districts will receive based on the number of students in certain programs, such as the learning assistance program, transitional bilingual program, or special education program – and it targets some of these resources to schools with high levels of student poverty. Lawmakers also included funding to expand dual-language learning opportunities in early learning programs and K-12 schools. This is a move in the right direction toward using evidence-based strategies to close the opportunity gap for children who are English-language learners, and it is an important acknowledgement of the benefits of bilingualism in schools.
    • Local levy reform. Finally, the plan restricts how much money school districts can raise through local levies, and what activities those levies can fund. Beginning in the 2019-20 school year, local levies may only be used to pay for certain “enrichment” activities – such as extracurricular activities. One possible consequence of this change is that, in some districts, it may make it difficult for schools to continue to deliver the same level of education to kids in particular programs considered basic education, such as special education. That’s because some districts are currently funding these programs with local levy dollars at levels above what the new state allocation will be. So it remains to be seen whether districts will be able to provide the same level of service under the new funding scheme.
  • Invests in early learning to prepare Washington’s kids for lifelong success. Legislators smartly expanded the Early Childhood Education and Assistance Program (ECEAP) – our state’s preschool program serving families with low incomes – by adding 1,800 new slots and protecting the quality of the program by increasing the rate ECEAP providers are reimbursed. But the budget falls short in some areas. It reduces funding for Early Achievers, which provides professional development for early learning professionals so they can provide the highest-quality care. Lawmakers also pushed out the date by which the state commits to serving all ECEAP-eligible kids – part of the landmark 2015 Early Start Act – from the 2020-21 academic year to the 2022-23 year. To advance the wellbeing of Washington’s kids and families, lawmakers should have kept the promises they made to provide ECEAP to all eligible kids by 2020.
  • Boosts financial aid for college students with low incomes. Lawmakers invested an additional $50 million in the State Need Grant, the chronically underfunded state financial aid program for students whose families make less than 70 percent of the median family income in our state. Estimates show that this increase will serve another 875 students per year, which will make a small dent in the program’s waitlist. 

REVENUE

To make smart, long-term investments in the most critical areas of the budget, lawmakers must enact revenue that is not only equitable, but that is also sustainable over the long term. Lawmakers did not do that with this budget. They decided instead to fund critical investments now with revenue that is unlikely to sustain investments in the future, and they covered the remainder with budget gimmicks. Overall, the revenue plan increases state general fund resources over the next biennium by a little over $2 billion. Lawmakers: 

  • Increased the state property tax and reduced local levies. It’s commendable that lawmakers provided new revenue to fund schools and other priorities, but the new property tax revenues they rely on are likely to diminish again once the damaging 1 percent property tax growth limit is allowed to go back into effect after 2022. 
  • Relied too much on accounting tricks to balance the budget. The other major tactic lawmakers used to balance the budget – a bevy of fund transfers and accounting tricks – will likewise put Washington’s future on shaky ground. To make the budget pencil out, they included gimmicks, like drawing down nearly $1 billion from the state rainy day fund. Funds originally devoted to cleaning up toxic sites, helping local governments improve roads and other physical infrastructure, and helping workers with children find and keep a job were also raided to support other investments. Lawmakers also relied on resources from federal funds that have not yet been secured – and that may be at risk given the massive cuts being proposed in the federal budget. A budget built on these kinds of temporary fixes isn’t built to last in the long term. Some of lawmakers’ laudable progress on community investments will be at risk in the future if they don’t take meaningful steps to reform the state’s flawed tax code. 

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