The House Appropriations Chair has proposed a 2019–21 operating budget that would appropriate $52.811 billion from funds subject to the outlook (NGFO). That’s a 18.2 percent increase over enacted 2017–19 appropriations. Of the $8.150 billion increase, $5.834 billion is maintenance level (the cost of continuing current services) and $2.316 billion is from new policies.

Revenues for 2019–21 are currently estimated to be $5.565 billion higher than 2017–19 revenues were when the 2018 supplemental budget was adopted. At that time, even with $1.144 billion less in estimated revenues for 2019–21 (and $1.116 billion less for 2017–19), the budget balanced over four years—including the maintenance level costs associated with the McCleary decision (as I’ve mentioned).

On top of these expected revenue increases, the proposal includes $979 million in new taxes in 2019–21 (growing to $2.173 billion in 2021–23)—including a 9.9 percent capital gains tax and a graduated real estate excise tax. (Additionally, the proposal would increase business and occupation taxes for certain sectors. The revenues would go to a new account not included in the NGFO and could be used only for higher education.)

The budget would balance over four years. It would leave an unrestricted ending balance of $209 million in 2019–21 and $104 million in 2021–23.

Some of the major proposed new spending items:

• School employee health benefits, $453 million
• Special education, $69 million
• Higher education appropriations tied to the new account mentioned above, $390 million
• Increased behavioral health community capacity, $137 million
• State hospitals, $122 million
• State employee collective bargaining agreements, $438 million

A public hearing on the budget will be held today at 3:30.

For more context, here are our recent reports on revenue and spending trends:

• Washington Revenue Review: Revenues Are Still Growing Strong, But for How Long?
• Washington Spending Review: Spending Up 44 Percent Since Pre-Recession Peak
• Washington’s Budget Sustainability Requirements Work When Followed