Budget and Taxes

Bills and events next week

As the first week of session wraps up, its helpful to recap the week, file reports about bills filed so far, and, prepare for next week.


Governor Inslee’s 2019-21 Operating Budget was the focus starting on day one.  Charlotte and I had the opportunity to testify about our four funding priorities this session (see earlier blog entries).  Then later on I supported additional revenue sources to fund our financial priorities (new capital gains and B&O increase).


I have prepared a Higher Education and K 12 report of the bills that will get hearings next week as well as all the bills that have been filed that will most directly affect our members.  Additionally, I have entered our position and level of interest in the bill.  Our position and interest may change during the session as amendments or other issues arise.


SEBB (School Employees Benefits Board) received plenty of attention this week and will get even more attention next week.  On Wednesday  the 23rd and Thursday the 24th, the House Appropriations Committee and Senate Ways and Means Committee will have separate work sessions (a thorough presentation and discussion about important issues) on SEBB and the Union Coalition agreement regarding SEBB funding.




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Senate considers additional revenue

Governor Inslee’s ambitious spending plans in his Budget makes it clear that new revenue must be considered if he is going to get everything he wants. Since funding for our higher education agreements and SEBB agreement are big ticket items, we need to support new revenue. Yesterday, the Senate Ways and Means Committee considered two new revenue sources in SB 5129: Capital Gains (a new tax) and an increase to the B&O (Business and Occupation) tax.

Capital gains (since it is a new tax source) faces the toughest road ahead.  On the other hand, a slight change to the B&O tax looks more likely to pass (of the two being considered).

I expect different sources will  also be considered in the future including changing the local levy caps that school districts may ask local taxpayers to fund in maintenance and operations levies.

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Budget agreement includes final PSE objective

Budget negotiators announced their final agreement last night, the day before the end of the session.  Most of the major differences between the House and Senate budgets were ironed out previously so this final deal didn’t change any major issues.  PSE had one additional measure we wanted the legislature to fund: $250,000 to develop paraeducator training modules.  Good news is that the budget included that funding.

K 12 salary allocations will be fully funded in the 2018-19 school year at a cost of $776 million.  The classified employee salary allocation will increase from $34,180 to $46,784.33 starting September 1, 2018.  Normally, when there is an allocation increase, we get the same percentage increase to negotiate with our school districts.  However, this 37% allocation increase does not mean we will get that full increase.  In another bill, SB 6362, which hasn’t been voted on yet but must be voted upon before the end of the session, the legislature limits how much we can negotiate of the 37% increase.  More on that after we see what the bill looks like.

Other details that didn’t change but are important to note:

  1. Insurance allocation will go up to $843.97 from its current amount of $820.
  2. The retiree carve out will increase to $71.08 from its current amount of $64.07.
  3. $20 million to HCA (Health Care Authority) to implement SEBB (School Employee Benefit Board).
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House approves budget on party line vote

On a 50-46 party line vote, the House finally approved its 2018 supplemental operating budget last Monday.  Nothing changed from my previous blog entry other than they used a different number for the bill (instead of HB 2299 they are now using SB 6032).

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McCleary solution approved by another committee

Now that the Budget negotiators are meeting to fine tune the 2018 supplemental budget, the House Appropriations committee approved SB 6362 on a party line vote of 18-15.  Since this bill covers an issue near and dear to every classified employee, their 2018-19 school year salary increase, this is where things stand at this point.  Keep in mind that it still has to be approved by the House and then has to be approved again by the Senate.

What can you negotiate for the 2018-19 salary increase:

1…minimum salary increase of 3%.

2….maximum salary increase dependent upon each school districts average total classified staff salary.  If your district average is less than the amount the school district receives from the state, we can negotiate whatever increase is necessary to raise your school districts average salary to the amount they receive from the state’s allocation for your school district (including the regionalization factor).  The average allocation from the state is $46,784.33.

3…Step increases and increased time as a result of enrollment increases or changes to the state’s prototypical school formula are allowed as an addition to the calculation above.

Though we are near the end of the process, there may be last minute changes that may change the calculation process.

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House makes significant change to Budget

After wading through numerous amendments last night, the House came close but didn’t vote on a final budget.  However, the most significant amendment approved (because it cost nearly $1 billion) was moving the K 12 salary allocation forward by one year (instead of funding the allocation over the next two school years, the entire allocation will be in one school year).  With that decision, the House is now in agreement with the Senate (and the Washington Supreme Court) that the salary allocation will begin September 1, 2018.

Once they vote on Monday, the House and Senate budget negotiators will work over the remaining days of the session to iron out their differences (one remaining difference important to us is PSE’s budget proviso for $250,000 for paraeducator training modules that is in the Senate budget but not the House budget).

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Senate approves Budget

On a narrow 25-23 vote, the Senate approved its Supplemental Operating Budget yesterday.  Though there were a couple of amendments approved, none of them changed issues of interest to PSE.  They fully funded the increased salary allocation starting September 1, 2018, provided an additional $20 million to implement SEBB (School Employee Benefit Board), and funded $250,000 for development of paraeducator training modules.

Once the House has completed its budget, the House and Senate budget negotiators will iron out the differences in their budgets.




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Additional details in House budget

In a 400 page document (that is the typical size of a budget) there are always small details to note after the big issues are covered.  Here are three small but important details…

  1.  Insurance funding starting September 1, 2018, increases $3.97 (from $840 to $843.97).
  2. The September 1, 2018, classified employee salary allocation increases $69.16  (from $39,975.50 to $40,044.66).  As a reminder, the current salary allocation for the 2017-18 school year is $34,180.
  3. Effective September 1, 2018, the retiree carve out increases $2.41 (from $68.67 to $71.08).
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House funds SEBB but not much more of PSE’s priorities

The House budget released yesterday met only one of our 3 goals for this session.  What they got right was fully funding SEBB implementation by adding $20 million for the HCA (Health Care Authority).  This is critical to getting the SEBB airplane off the runway in time for its January 1, 2020, start date.  The good news is that the House, Senate, and Governor Inslee have all released budgets supporting full funding of SEBB implementation.

I fully expected the House to follow the Senate’s lead by meeting demands of the Washington State Supreme Court to move  classified employee salary allocation increases forward one year (effective September 1, 2018).   Instead, the House ignored the Court and left in place the salary allocation increases over the next two years rather than the one year required by the Supreme Court.

One additional PSE measure they missed out on was funding for development of special education and TBIP (Transitional Bilingual Instruction Program) training modules for paraeducators.  Fortunately for us, the issue is not dead because the Senate included it in their budget.

A confusing aspect of their budget was their proposal to add a .5 FTE family involvement coordinator to every elementary school at a cost of $28 million (interesting to note that this is scheduled to increase to 1 FTE in the 2020-21 school year).  This position is a classified employee position but the budget puts them in the certificated employee funding allocation.  This distinction becomes more important when you take into account another bill, HB 1618, which requires that this funding must be used to hire family involvement coordinators (in other words it can’t be used for any other purpose).


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Small updates on Senate budget proposal

Looking closer at the Senate budget proposal, I found a couple of small items worth noting.  First, they proposed raising insurance funding starting September 1, 2018, by $5.18 per month from $840 to $845.18.  As a result of this change the retiree carve out will increase ninety cents from $68.67 to $69. 57.  Finally, the September 1, 2018, minimum salary increase will be 2.3% (as a reminder, the maximum increase is still under debate).

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