House Republican budget proposal would use the rainy day fund (including for a recovery rebate for low-income individuals)

By: Emily Makings
1:04 pm
February 16, 2021

Today Rep. Drew Stokesbary, ranking member of the House Appropriations Committee, released proposals for a 2021 supplemental and a 2021–23 biennial operating budget. Like the proposals from Sen. Wilson last week, Rep. Stokesbary’s proposals would drain the rainy day fund in 2021 and would not increase general taxes.

The 2021 supplemental would reduce appropriations from funds subject to the outlook (NGFO) by $1.573 billion. Revised 2019–21 NGFO appropriations would total $52.127 million ($151.9 million below the appropriations proposed by Sen. Wilson). (If enacted, revised appropriations would be 16.7% higher than in 2017–19.)

For 2021–23, appropriations would total $55.352 billion ($152.6 million less than Sen. Wilson’s proposal). Rep. Stokesbary’s proposal incorporates the early action relief bills (HB 1367 and HB 1368) that have been passed by the Legislature. (If enacted, appropriations would be 6.2% above revised 2019–21 appropriations.)

Some major spending items include (from the NGFO unless otherwise noted):

  • $200.0 million in 2021 from the rainy day fund for a recovery rebate for low-income individuals
  • $200.0 million in 2021–23 for the working families tax credit
  • $150.0 million for local public health districts
  • $130.0 million for fire preparedness
  • $100.0 million for rental assistance
  • $60.4 million to increase community behavioral health capacity
  • $44.0 million for safety net support for Harborview Medical Center
  • Savings of $118.3 million from eliminating the National Board Bonus for teachers in SY 2020–21 and SY 2021–22
  • Savings of $137.2 million by reducing state-supported higher education tuition waivers by 25% (this would be replaced with tuition paid by students)
  • Savings of $733.0 million by merging the Teachers’ Retirement System (TRS) plan 1 with the Law Enforcement and Firefighters’ System plan 1 (this would reduce the TRS1 unfunded liability)

The proposal assumes passage of several bills that would reduce revenues. These include:

  • HB 1541, which would allow cities and counties to impose a local sales and use tax for homelessness services (to be credited against the state sales and use tax)
  • HB 1535, which would exempt diapers and other necessities from the sales and use tax
  • HB 1299, which would temporarily reduce the B&O tax on the retail sale of lodging, prepared food and alcoholic beverages, and retail sales at bowling alleys
  • HB 1459, which would expand and extend the sales and use tax exemption for data centers

(The proposal also assumes passage of SB 5315, related to captive insurance, which would increase revenues by $34.2 million in 2021–23.)

Finally, the proposal would drain the rainy day fund in 2019–21. It would be built back up to a balance of $1.077 billion by the end of 2023–25. The unrestricted NGFO ending balance in 2023–25 would be $732 million.

Categories: Budget.
Tags: 2019-21 , 2021-23