Today Gov. Inslee signed the budget and tax bills. (Our overview of the 2019–21 budget deal is here, and our brief detailing appropriations is here.) Although there had been calls for the governor to veto SHB 2167 (the additional business and occupation tax for large financial institutions) and ESSB 5997 (the sales tax refund program for nonresidents), he signed all the tax bills.

But the governor did veto sections of the operating budget. The operating budget veto message is here. Some notable vetoes include:

• The 2019 supplemental to the 2017–19 budget included a transfer of $38.0 million from the state toxics control account to the general fund–state. Gov. Inslee vetoed that transfer, writing, “When combined with appropriations specified in the 2019-21 operating budget, this transfer contributes to a projected negative balance in the new Model Toxics Control Operating Account created in Engrossed Substitute Senate Bill 5993.”
• Sec. 723 required overtime costs, professional service contracts, travel, goods and services, and capital outlays to be cut by 1 percent in FY 2020 and 1 percent in FY 2021 at agencies with 100 or more employees. This would have reduced 2019–21 spending by $22.5 million. Gov. Inslee vetoed this section: “These spending reductions do not reflect any real savings or efficiencies. They are simply arbitrary budget cuts . . .”
• Sec. 613(3) set State Need Grant awards for private four-year not-for-profit institutions at the same level as the average award for public research universities. According to the veto message, this is $10,606 per student in SY 2019–20. But E2SHB 2158 sets grant awards for private four-year not-for-profit institutions at $9,739 for SY 2019–20. “As a substantive bill, the setting of the grant awards in E2SHB 2158 should prevail.”
• Sec. 212(6) required the Health Care Authority to submit a report on benefit options for Medicare-eligible retirees “to address the rising cost of prescription drugs and member premiums.” According to the governor, HCA “has already completed an essentially identical study” and he directs the HCA “to continue development of one or more retiree benefit choices that may be less expensive and better leverage federal funding.”
• Several sections referenced bills that were not ultimately enacted. Gov. Inslee vetoed them as they are now unnecessary.

Altogether, it doesn’t look like the vetoes will put the budget out of balance.

Interestingly, Gov. Inslee did not veto some provisions that David Schumacher, the director of the Office of Financial Management, had concerns with after the House passed its initial budget earlier in the session. For example, the governor did not veto the provision that appropriates $7.2 million for a wage increase for University of Washington employees that is contingent on successful negotiation of amendments to their collective bargaining agreement. Schumacher had written,

While the idea may be attractive, RCW 41.80.010 (3) (b) provides assurance to those at bargaining tables that the Legislature will approve or reject the submitted requests for funding as a whole. Deviating from this undermines the collective bargaining process. Employer and employee representatives alike deserve to know that the multitude of trade-offs and compromises integral to bargaining will not be adjusted independently after agreement has been reached.