This week Gov. Inslee released his 2017–19 budget proposal. I’ve been looking through the numbers a bit more. (See here and here for posts giving an overview of the proposal. Also, Kriss, Mary and I talked about it in this episode of our podcast.)

Overall, the budget would increase near general fund–state plus opportunity pathways (NGFS+) spending by $8.242 billion over 2015–17. Of that change, $933.9 million is carry-forward, $2.546 billion is maintenance, and $4.763 billion is policy.

OFM describes the carry-forward level as the “reference point created by calculating the biennialized cost of decisions already recognized in appropriations by the Legislature.” Maintenance level “reflects the cost of mandatory caseload, enrollment, inflation and other legally unavoidable costs not contemplated in the current budget.” Policy level represents “revised strategies or substantial differences in program direction.” As we consider budget proposals, the policy level changes are the ones to watch. By and large, the Legislature will be working with similar carry-forward and maintenance levels.

The chart below shows the different types of changes by budget area. The dollar amounts shown are the total NGFS+ change over 2015–17. For example, in public schools, the carry-forward change is $522.4 million, the maintenance change is $1.365 billion, and the policy change is $3.415 billion, for a total increase of $5.303 billion.

Public schools are clearly the focus of this budget proposal, and the proposed changes are dominated by the funds Gov. Inslee would provide for teacher salaries to address the final McCleary component. The amount he sets aside for this is $2.413 billion. During yesterday’s Education Funding Task Force meeting, Gov. Inslee’s staff said that one-third of his salary proposal would be implemented in the first year of the biennium. It would be fully implemented in the second year. Thus, the full biennial amount would be higher going forward. Of course, this is just an estimate—the Legislature still needs to decide what level of salaries is currently being spent on basic education from local revenue sources.

Aside from McCleary salaries, Gov. Inslee would increase K–12 policy spending by $1.002 billion. That includes $325 million for school counselors, nurses, psychologists, social workers, and family engagement coordinators; $333 million for teacher training; and $139 million for health benefits. A big maintenance level item is completing the K–3 class size reduction that the Legislature has already been planning.

The other big area is social services. The state presents social services spending in two budget areas: one for the Department of Social and Health Services (DSHS) and one for “Other Human Services.” Other Human Services is dominated by the Health Care Authority (HCA), which administers Medicaid. It also includes Corrections and the Department of Health, among other agencies. In the chart I've combined the spending of DSHS and Other Human Services because of a large proposed transfer from DSHS to HCA. (Because of the transfer, it appears that spending for DSHS is significantly reduced, but that doesn’t really reflect what is going on.)

Policy spending in the HCA would increase by $954 million due to the transfer of community mental health and substance use disorder programs from DSHS. (This is related to a 2014 law requiring DSHS and HCA to integrate physical and behavioral health care for Medicaid clients.) The proposal would also increase mental health funding, but I haven’t dug in to those numbers yet.

(As an aside, I think HCA warrants its own budget area at this point, especially if the proposed transfer is enacted. Under Gov. Inslee’s proposal, NGFS+ spending for HCA would be $5.490 billion to DSHS’s $6.258 billion. Even in 2015–17, HCA spending was $4.016 billion to DSHS’s $6.405 billion.)

Also in Other Human Services, Gov. Inslee proposes creating a new agency: the Department of Children, Youth, and Families. The Seattle Times reports, “It would not create new programs, but would reorganize existing programs so they could be deployed, hopefully, more efficiently.” Beginning in FY 2019 (the second year of the biennium), the governor proposes transferring DSHS’s Children’s Administration and the Department of Early Learning to the new agency. (The Department of Early Learning is currently accounted for in “Other Education” and is the largest agency in that budget area—hence the spending reduction shown in the chart.) Together, $577.7 million would be transferred to the new agency.

There is a large maintenance level increase in Special Appropriations. This includes $72.8 million for county public health assistance and $30.0 million for local government distributions pursuant to I-502 (marijuana legalization).

Policy level spending for higher education would increase significantly, by $397.4 million. Of that, $146.4 million is proposed to maintain and expand the State Need Grant. Additionally, $148.6 million of the policy increase is related to compensation increases. (Gov. Inslee would fund the collective bargaining agreements reached with state employees, and increase salaries for non-represented employees. In the chart there is not a single line-item for staff compensation increases; those increases show up in the agencies where the employees work. In some agencies, the compensation increases are a significant part of the policy level spending increases.)

Lastly I wanted to link to this list of major legislation assumed in the budget proposal. It includes a suspension of the four-year balanced budget requirement. During the 2016 session, some legislators proposed doing so; it would still be a shame to lose this check on budget-writers.