For 2019–21, Gov. Inslee is proposing operating appropriations of $54.634 billion. That’s an increase of $9.973 billion, or 22.3 percent, over 2017–19 appropriations. This level of appropriations would be very high by historical standards.

The estimated maintenance level, or the cost of continuing current services, is $51.077 billion. This is $324 million higher than the maintenance level projected in the Economic and Revenue Forecast Council’s November outlook. (The maintenance level will continue to be refined into the session.)

One reason for the high maintenance level is that this is the first biennium in which the state’s response to the McCleary decision on school funding is fully funded for the entire biennium.

On top of the maintenance level changes, Gov. Inslee proposes policy additions of $3.557 billion. Some major items include:

• $404 million for behavioral health care
• $173 million for a “comprehensive early learning initiative”
• A return to “Washington’s traditional levy structure”—school districts would be allowed to levy up to 28 percent of their revenues
• $51 million to fully fund the special education safety net
• $94 million “to begin phasing in the targeted and enhanced special education funding structure” proposed by the Superintendent of Public Instruction
• $32.7 million for a career connected learning grant program
• $103 million for the Washington College Promise Scholarship (previously known as the state need grant)
• $691 million to fund the collective bargaining agreements with employees (the total cost across all funds appears to be about $1.493 billion)
• $942 million for school employee health benefits (it looks like $644 million of this is policy level)

The ERFC estimates that the state will have $50.002 billion in revenues for the biennium (an increase of $4.203 billion or 9.2 percent from 2017–19). Gov. Inslee would increase those revenues by $3.696 billion to help pay for his policy additions. These new NGFO (funds subject to the outlook) revenues include:

• Capital gains tax (9 percent), $975.0 million in fiscal year 2021 (and $2.141 billion in 2021-23, the first full biennium of revenues)
• Increase the B&O tax on services by 1 percent, $2.612 billion

Additionally, the real estate excise tax would be changed from a flat rate to a graduated rate (this would specifically be used to pay for culvert removal). It would increase motor vehicle account revenues by $400 million.

(Note that the governor’s budget documents use NGFS, but this has the same meaning as the NGFO—both include the general fund–state, education legacy trust account, and opportunity pathways account. Unless otherwise noted, all figures in this post are in terms of the NGFO.)

For our recent reviews of state revenues and spending, see here and here.