On Tuesday, Gov. Inslee acted on the supplemental operating budget and related legislation. We wrote about the budget as passed by the Legislature in this policy brief.

First, the governor signed ESSB 6614, which reduces the state property tax in 2019 and diverts funds from the budget stabilization account.

Second, he signed E2SSB 6362, which modifies basic education. In doing so, he vetoed two provisions:

• The one-year delay of professional learning days—one day will now be funded in SY 2018–19 as planned under 2017’s EHB 2242.
• The requirement that OSPI adopt rules that would require school districts to provide separate accounting of state and local revenues and expenditures by SY 2018–19—that requirement must now happen by SY 2019–20, as planned under EHB 2242.

Third, he signed ESSB 6032, the supplemental operating budget. Several provisions are vetoed, including:

• A publicly available online tax database (because the budget didn’t provide enough funding).
• The provision that allows for hold harmless payments to qualifying school districts (because E2SSB 6362 “contains a more prescriptive hold harmless calculation”).
• The professional learning day delay.
• The use of a WSIPP study on higher education funding models in various states to present funding options to the Legislature for salary and benefit decisions in 2019–21. (The study itself was not vetoed.)
• The intent that the Legislature would fund distributions to the local public safety enhancement account in 2019 and 2021 “through alternate means, which may include transfers from the law enforcement officers’ and firefighters’ plan 2 retirement fund.”

The state has not yet released estimates of the fiscal impact of these vetoes in 2017–19 and 2019–21. It looks, though, like most of the vetoes will have fairly minor impacts—except for two items: The delay of the phase-in of professional learning days in the budget as passed by the Legislature was estimated to save $27.1 million in 2017–19 and $75.8 million in 2019–21. Additionally, the local public safety enhancement account transfer provision would have saved $50.0 million in 2019–21.

The budget outlook put together by legislative staff based on the budget as passed by the legislature shows an ending fund balance of $103 million in 2019–21. My back-of-the-envelope calculation puts the budget including vetoes in the red for 2019–21.