Under Gov. Inslee’s proposed 2023–25 operating budget, appropriations from funds subject to the outlook (NGFO) would increase by $4.854 billion to fund new policies. (The cost of continuing current services is expected to increase by an additional $1.401 billion.)

Many of the new policy proposals are related to employee compensation or increasing the rates paid to social service providers. By my count, these new policy items total $2.322 billion (47.8% of all new policy proposals). This includes:

• $351.9 million to adjust K–12 salaries for inflation.
• $1.389 billion for compensation increases for state employees and non-state employees. This includes pension changes, collective bargaining agreements (CBAs), extending CBAs to non-represented employees, and other compensation items.
• $580.9 million for increased service provider rates, including $138.9 million to increase Working Connections Child Care rates and $133.2 million to increase Medicaid provider rates.

The Office of Financial Management’s (OFM) summary of the CBAs is here. Earlier this month, OFM determined that the CBAs with state employees are feasible financially for the state. OFM also determined that the increased compensation for individual providers of long-term care is feasible financially. (Individual providers are now considered employees of the “Consumer Directed Employer,” which has a rate-setting board to propose rates, rather than collectively bargaining with a union.)

Meanwhile, the 2022 supplemental operating budget requires OFM to report on vendor rates for services provided to low-income individuals, to include a review of the history of rate increases and a comparison of increases to inflation. It was due on Dec. 1, but instead OFM submitted a status report to the Legislature, writing, “There were challenges in finding a consultant for the study, which required us to extend the timeline.” Gov. Inslee’s 2023 supplemental proposal would extend the deadline for the final report to April 3, 2023.

(Prior posts on the governor’s budget proposals are here.)