The Senate-passed capital budget would appropriate $876.4 million from all funds for public schools in 2023–25, and it assumes that the appropriations for the funded projects would total $6.868 billion over 10 years. The capital budget approved by the House Committee on Capital Budget would appropriate $844.1 million from all funds for public schools in 2023–25. It assumes that those projects would cost $8.180 billion over 10 years. (For an overview of the two capital budget proposals, see here.)

There are three main programs through which the state funds school construction projects:

• The school construction assistance program provides matching funds to school districts to help them build new schools or modernize existing schools. Districts must have local funds (e.g., an approved bond) for the project and districts with lower assessed property values receive a higher state match. Both the Senate and House budgets would appropriate $588.2 million in 2023–25 for the program. ($5.7 billion in spending is assumed for this program over 10 years.)
• The small district and state tribal compact schools modernization program provides grants to districts with fewer than 1,000 students to modernize their facilities. No local match is required. Both budgets would appropriate about $100 million for the program in 2023–25.
• The school seismic safety grant program (created last year) provides grants to districts to fund retrofitting or relocation of schools in high seismic or tsunami areas. No local match is required. Both budgets would appropriate $40.0 million for the program in 2023–25.

There are two main differences between the Senate and House capital budget proposals for public schools.

First, the Senate would appropriate $33.3 million for distressed schools, “to address student capacity needs, safety, and inadequate building systems in school and skill center facilities.” Eight schools would receive funding.

Second, the House would appropriate $4.0 million in 2023–25 ($1.361 billion over 10 years) for capital assistance to small school districts, as proposed in HB 1044.

As passed by the House, SHB 1044 would create a new school construction grant program. The grants would be used to modernize or replace buildings that are at least 30 years old and in poor or unsatisfactory condition. Districts with 1,000 students or fewer would be eligible. Applications for construction grants would be prioritized based on remaining school debt capacity, the severity of the district’s financial constraints, facility condition, and district enrollment. Districts would be required to cover a portion of the project’s cost. The district’s share would be at least 50% of its remaining debt capacity, up to an estimated property tax rate of $1.75 per $1,000 in assessed value.

On April 11, the Senate passed a different version of the bill. As passed by the Senate, districts would be eligible for the new grant program if they have 1,000 or fewer students. Additionally, districts with 3,000 or fewer students would also be eligible, if they are “in an educational service district with rural communities that experience prohibitive access to skill centers or other workforce development facilities,” they have been unable to get voter approval for bonds in the prior 25 years and at least three bond measures were rejected in consecutive years during that period, and they have “instructional buildings that do not meet structural, capacity, environmental, or emergency requirements.”

The Senate bill would make appropriations for small school district projects the first priority of the common school construction fund, after payment of principal and interest on bonds. Also, beginning in 2025–27, at least $60.0 million in the capital budget would have to be used for the small school districts prioritized list. The number would increase to $70.0 million in 2027–29 and $80.0 million in 2029–31 (and thereafter).

On April 14, the House refused to concur in the Senate amendments.

According to the fiscal note for SHB 1044 (as passed by the House), the bill would increase capital spending by $189.2 million in 2023–25 and $402.3 million in 2025–27. (There is not a fiscal note for the version passed by the Senate.)

Finally, note that the main sources of state funding for capital appropriations for public schools are the state building construction account (bond proceeds) and the common school construction account (CSCA). The Senate capital budget would appropriate $66.8 million from the CSCA in 2023–25 and the House would appropriate $107.5 million from the CSCA.

Revenues from the capital gains tax that exceed $500 million (adjusted for inflation) will be deposited in the CSCA. The Economic and Revenue Forecast Council estimates (based on the March 2023 revenue forecast) that the amount of capital gains tax revenues going to the CSCA will be $197 million in 2023–25 and $452 million in 2025–27.