February 17, 2021
Sen. Wilson’s 2021–23 operating budget proposal would appropriate $55.505 billion from funds subject to the outlook (NGFO). This would represent an increase of 3.4% over enacted 2019–21 appropriations. (It would be an increase of 6.2% over Sen. Wilson’s 2021 supplemental proposal.) Gov. Inslee’s 2021–23 proposal would appropriate $57.893 billion (as revised by the Office of Financial Management earlier this month). (Here’s my overview of Sen. Wilson’s proposals and here are details about the 2021 supplemental proposal.)
The estimated maintenance level (the cost of continuing current services, adjusted for enrollment and inflation) in Sen. Wilson’s proposal is $56.073 billion ($27.0 million less than in Gov. Inslee’s proposal). In Sen. Wilson’s proposal, new policies would reduce appropriations by $568.5 million. New policies in Gov. Inslee’s proposal would increase appropriations by $1.793 billion.
Note that Sen. Wilson assumes that the enhanced federal Medicaid match (FMAP) will remain in effect through Dec. 31, 2021. Under the Families First Coronavirus Response Act, the federal government increased its Medicaid match by 6.2%. This enhanced match is effective until “the last day of the calendar quarter in which the last day of” the federal coronavirus emergency period occurs. The public health emergency was most recently extended by the Secretary of Health & Human Services on Jan. 7, 2021. (It was renewed quarterly in 2020.)
Because these federal dollars may be used in place of state dollars, Sen. Wilson’s proposal assumes it will save the state $283.2 million in 2021–23. Gov. Inslee’s 2021–23 proposal does not assume that the enhanced match will be in effect during the biennium.
Major differences between the two proposals include (in terms of the NGFO):
- In governmental operations, Sen. Wilson’s proposal would not provide funds for rental assistance (Gov. Inslee would appropriate $164.0 million). Sen. Wilson’s proposal would appropriate $100.6 million for the working families tax credit (SB 5424).
- The policy level reduction in the Department of Social and Health Services (DSHS) is largely due to Sen. Wilson’s assumption that the enhanced FMAP will be in place through December, saving $122.3 million in state funds.
- In the Health Care Authority (HCA), Sen. Wilson’s proposal would not restore savings that have not been realized in the Healthier Washington program or from program integrity activities. (Gov. Inslee would provide $61.6 million and $143.0 million, respectively, for those purposes.) Sen. Wilson would provide $48.1 million for community behavioral health capacity and $60.0 million for community long-term inpatient civil commitment beds. Her proposal would increase appropriations by $39.1 million to increase primary care provider rates. In her proposal, the HCA would save $155.2 million from the enhanced FMAP.
- In other human services, Sen. Wilson would not appropriate funds for the Department of Health for testing, contact tracing, and other activities to control the spread of COVID-19 (Gov. Inslee would provide $387.5 million). The net policy level reductions for this budget area in Sen. Wilson’s proposal are largely due to funding the collective bargaining agreements (CBAs) for employees.
- In public schools, Gov. Inslee’s proposal includes $400.0 million for accelerated learning opportunities, $75.6 million for connectivity, and $32.0 million for school counselors. Sen. Wilson’s proposal does not include funding for these items.
- The policy reductions for higher education in Sen. Wilson’s proposal come from funding the CBAs for employees. Gov. Inslee’s proposal would also do this, but his proposal includes other appropriation increases that are not in Sen. Wilson’s proposal (for example, $23.3 million for a new center for diversity, equity and inclusion and $112.0 million for safety net support for the UW hospitals).
- In other appropriations, Sen. Wilson’s proposal would save $705.5 million from merging the assets and liabilities of the Teachers’ Retirement System (TRS) plan 1 with the Law Enforcement Officers’ and Firefighters’ System plan 1 (this would eliminate the underfunded status of TRS 1). Her proposal would increase appropriations by $50.0 million for the developmental disabilities community services account. Additionally, the CBAs with state employees include furlough savings. Sen. Wilson would appropriate $300.0 million to back out those savings for employees covered by the CBAs and non-represented employees.