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Dear Friends and Neighbors,

After 172 days of session, the Legislature finally adopted a two-year, $43.7 billion operating budget last Friday. While 48 percent of the 2015-17 operating budget was allocated for K-12 education, this budget invests an additional $7.3 billion over the next four years through House Bill 2242, bringing that number to 53 percent. This means for the first time since the early 1980s, more than 50 percent of the operating budget will be dedicated to K-12 education. Along with this additional funding, HB 2242 ends school districts' overreliance on local levies to fund basic education, while also providing equity for students, teachers and taxpayers. Highlights of the bill include:

  • Increases state salary allocations by nearly $5.3 billion per biennium to equip all school districts with sufficient resources to recruit and retain high-quality staff;
  • Establishes minimum and maximum salary levels to ensure an equitable distribution of funding for teachers in all districts at all experience levels;
  • Increases starting teacher pay to a minimum of $40,000 per year, up 12 percent from current levels;
  • Eliminates a fragmented and unfair health benefit system that punishes working families and replaces it with a modern and uniform health benefit system modeled after the state employee health benefit system;
  • Remedies our current regressive local levy system by capping local levy rates to provide tax relief to those in school districts where property valuations are on the lower end of the scale;
  • Establishes a vigorous reporting and accounting system to ensure separation and tracking of revenues, thus providing transparency in both state funding and local decision-making, and to prevent unconstitutional overreliance on local levies;
  • Increases the uniform state property tax to ensure that property-wealthy districts pay their fair share, while still ensuring property tax relief for taxpayers in most property-poor districts;
  • Provides a general wage increase of 6 percent to state employees, 10.5 percent for Teamsters (i.e. Department of Corrections personnel), 19 percent for Washington State Patrol troopers, and 23 percent for Washington State Patrol sergeants; and
  • Funds collective bargaining agreements contingent on the passage of bargaining reforms to increase transparency and broaden legislative oversight;

Regarding the bullet on an increase in the uniform state property tax, 2018 is considered a phase-in year for this new policy. Due to current maintenance and operation levy rates remaining in effect through next year, every district in the state will see increased property taxes before a new school levy cap is enacted in 2019 — set at $1.50 per $1,000 of assessed value. However, many 26th District residents will then see a property tax reduction in subsequent years.

In terms of the increase in funding school districts in the 26th will see as a result of this policy change, take a look at the chart below:

School District SY 2017-18 SY 2018-19 SY 2019-20 SY 2020-21
Bremerton $2,049,233 $9,563,501 $13,493,260 $14,420,443
Peninsula $2,272,425 $11,149,443 $20,885,199 $22,822,198
South Kitsap $2,817,062 $16,153,661 $24,040,563 $25,690,551

As you can see, all of our school districts are set to receive substantial increases in funding over the next several years under this new policy as compared to the previous policy.

Aside from K-12 education, other highlights of the 2017-19 operating budget include:

  • No capital gains income tax, carbon tax, or business and occupation tax increase on service businesses;
  • Makes critical investments in our mental health system, increasing access to crisis walk-in centers and building on our efforts over the past several years;
  • Invests in homelessness relief, assisting individuals with a history of mental illness and providing housing opportunities for homeless youth;
  • Provides a significant rate increase to child care providers, many of which are struggling; and
  • Funds the new Department of Children, Youth, and Families, which will create a system of checks and balances and help reverse the culture of dysfunction in our state's foster care system.

While there is much to like about the operating budget, my biggest concern with it is the growth in state spending it facilitates — 13 percent in 2017-19 and another 14 percent in 2019-21. This could become problematic if the economy slows down in a meaningful way. It is my hope we can exercise better fiscal restraint in future biennia, but I also realize much of the growth in spending is attributed to the $7.3 billion investment in K-12 education, which was necessary to bring an end to the McCleary saga.

Third special session continues

Although we passed an operating budget, there is still more work to do before we can adjourn sine die. Negotiations continue on the 2017-19 capital budget, with the biggest hiccup being the lack of an agreement on a fix for the state Supreme Court's Hirst decision.

In the 2016 decision, the court told counties that before they authorized landowners to use permit-exempt wells, the county would have to make sure there was sufficient water so as to not reduce the amount of water that makes it into rivers, streams, and locations where there might be fish at some point. This ruling is already being enforced, even being applied in rural areas where the Department of Ecology had previously determined sufficient water existed.

The Hirst decision has effectively jeopardized development in rural communities around the state. A great deal of already-purchased land may go undeveloped, and the economic loss to rural landowners could easily run into the hundreds of millions of dollars. That's why negotiators for our caucus continue working hard to come up with a solution to fix this disastrous decision. Word is if there's no Hirst fix, there may not be a 2017-19 capital budget. Stay tuned.

Contacting me

Please continue contacting me with any questions, comments or concerns you have about the 2017-19 operating budget or any other legislative matters. I will do my best to respond as quickly as possible. My number is (360) 786-7802 and my email address is michelle.caldier@leg.wa.gov.

It is an honor to serve as your state representative.

Sincerely,


Michelle Caldier

State Representative Michelle Caldier
26th Legislative District
RepresentativeMichelleCaldier.com
122G Legislative Building | P.O. Box 40600 | Olympia, WA 98504-0600
michelle.caldier@leg.wa.gov
360-786-7802 | Toll-free: (800) 562-6000