Under state law, the governor must submit a budget proposal that balances within existing revenues. This is called the current law or “book 1” budget. Governors may also submit an alternative, or “book 2,” budget proposal that uses new revenues.

Gov. Inslee proposed a book 2 budget that would increase 2019–21 spending from funds subject to the outlook by $9.973 billion over 2017–19. We wrote about that proposal, which is Gov. Inslee’s preferred budget, in a policy brief yesterday. His proposed current law budget, on the other hand, would increase spending by $6.412 billion over 2017–19.

The maintenance level (the cost of continuing current services) for 2019–21 is estimated to increase spending by $6.415 billion over 2017–19 (this includes the school spending increases related to the state Supreme Court’s McCleary decision on school funding). Thus, new policy changes in the governor’s preferred budget would increase spending by $3.557 billion, while policy changes in the current law budget would decrease spending by $3.7 million.

Although the governor is certainly not advocating for the spending levels in the current law budget, it’s interesting to see how priorities change when new revenues are not an option. The chart below shows the policy changes by budget area in each budget proposal.

As in his preferred budget, Gov. Inslee’s current law budget would fund collective bargaining agreements with state employees and the School Employees Benefits Board.

Some major differences between the current law budget and the preferred budget:

• The current law budget would not fund a pension increase for Public Employees’ and Teachers’ Retirement Systems Plan 1 retirees.
• It would not fund the collective bargaining agreements with family child care providers, language access providers, adult family home workers, or individual providers of in-home care, nor would it provide parity for in-home care providers employed by agencies.
• Levy equalization would be suspended for four years in the current law budget.
• The current law budget would not increase the special education multiplier.
• It would not fund student support staffing at schools.
• There would be no new funding for career connected learning.
• The current law budget would suspend the state need grant for four years.
• It would not fund foundational support or enhancements and student supports for the higher education institutions.
• It would not expand the Early Childhood Education and Assistance Program.
• It would not fund the Trueblood settlement agreement.
• It would not increase funding to maintain operations at the state psychiatric hospitals.

All told, the governor’s book 1 proposal shows a way to balance the 2019–21 budget without increasing taxes, while still fully funding changes related to the McCleary decision. His preferred budget would increase taxes in order to fund many more new policies. Legislators will surely have a different mix of priorities. As we have recommended, a cautious approach to spending would be a good idea.