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Published on Tuesday, July 8, 2014

State Budget Process Begins

The summer marks the beginning of the State’s budget process, and it should be no surprise that the McCleary decision regarding education will dramatically impact what the Legislature does in the next session; and what the Legislature does, always impacts cities.

Lawmakers on both sides of the aisle seem to agree that they need to come up with somewhere between $1.2 – 2 billion for basic education funding for the two-year State budget biennium which begins on July 1, 2015.

To put that in context, the current State operating budget is approximately $34 billion. Roughly two-thirds of that budget is protected from cuts by constitutional and federal requirements, leaving about $12 billion of discretionary spending, which funds higher education, state corrections, other human services, natural resources programs, other state programs, and the Legislature itself.

Governor Inslee is responsible for releasing the first budget proposal. Although his proposal is not expected until December, the Office of Financial Management recently issued its budget instructions to all State agencies. Those instructions refer to the “enormous pressure” on the general fund for the next two biennium as the State meets its McCleary funding commitments and instructs agencies to identify 15% in cuts to their current budget.

In addition to what is needed to fund basic education under McCleary, the Governor and his budget staff also are looking for $1 billion to maintain the current level of State services, but not all legislators are convinced that much is needed. Nevertheless, finding more than $1 billion in cuts or agreed-upon new revenue will challenge the Governor and legislators.

We will continue to share what we learn.

Categories: State budget