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Gov. Gregoire signs state's two-year, $26 billion budget to make education and health care better

For Immediate Release: May 17, 2005

OLYMPIA � May 17, 2005 � Gov. Christine Gregoire today signed into law the state�s two-year, $26 billion operating budget that invests in education, expands health care for children and avoids general tax increases.

�Your future just got better,� Gregoire said after signing the biennial budget bill approved by the Legislature. �This budget permanently funds Initiative 728, which reduces class sizes in public schools. It increases enrollment at state colleges and universities by 7,900 students, and it expands health care to an additional 40,000 children statewide.�

The new, two-year budget, which takes effect July 1, avoids a general tax increase, balancing the $26 billion General Fund spending plan through $850 million in cuts, savings and fund shifts, and $385 million in new taxes derived from partial restoration of the estate tax on assets worth $1.5 million the first of the biennium and $2 million thereafter, and new taxes on cigarettes, hard liquor and extended warranties.

�I can think of at least a million reasons to sign this budget,� Gregoire said, referring to ways the spending plan supports 1 million children in public schools, more than 224,000 students in state colleges and universities, 900,000 children and adults who receive Medicaid medical services, 100,000 enrollees who obtain health insurance through the Basic Health Plan, and the 6 million population of the state that �thrives on a strong economy.�

At the budget bill signing, Gregoire focused on what she called her �Top 10 Reasons to Sign the Budget.�

Number 1: Our Future will be Better
�Investing in education, more health care for children and a strong economy are the ingredients for a better future for Washington State,� Gregoire said.

Number 2: Public Schools Improve
The governor said that for the first time, $25 million in new funding for the Learning Assistance Program for struggling students will focus on high school kids, helping them meet tough new graduation requirements.

Gregoire said the budget makes fiscal policy changes that fully fund Initiative 728, which provides an additional $138 million to reduce class sizes in the next biennium. The budget also restores Initiative 732, which provides $139 million for cost-of-living increases to teachers and other public-school staff. Both of the voter-approved initiatives had been suspended by the Legislature during the past two years.

Number 3: More People Go to College
�We�re taking down the no-vacancy signs at our state colleges and universities,� Gregoire said. The new budget includes $74 million in new funding to increase enrollment by 7,900, bringing the total number of students in Washington�s higher education system to more than 224,000. Financial assistance for students in low-income families also is increased by $26.9 million to account for the enrollment expansion and expected increases in tuition.

In addition, the University of Washington branch campuses at Tacoma and Bothell and the Washington State University Branch Campus at Vancouver, become four-year year universities. The changes means the branch campuses will begin admitting freshman and sophomore applicants � in addition to the junior- and senior-level students they already service.

Number 4: More Kids Get Health Care
�Medicaid programs that serve low-income families are expanded through $51 million in new funding, so that 40,000 additional children get health care,� Gregoire said. �In addition, we can continue to provide health insurance to all 100,000 enrollees in the Basic Health Plan, and we can reduce the costs of prescription drugs for people who are uninsured or underinsured.�

The budget also provides $28 million to increase Medicaid reimbursement rates for hospitals. The largest increases go to hospitals now paid the least.

Number 5: Our Economy Will Keep Growing
�This budget avoids general tax increases, which could have slowed the recovery of Washington State�s economy,� the governor said. �Instead, we rely on targeted tax increases on cigarettes, hard liquor and extended warranties, as well as partial restoration of the estate tax, which only applies to estates worth more than $1.5 million the first year of the biennium and $2 million thereafter.�

In addition, the separate construction and transportation budgets the governor previously signed will support thousands of direct and indirect jobs related to construction and transportation projects.

Number 6: Better Community Services
The budget provides $80 million to replace federal funding cut from community mental health services. It also includes $19 million to continue grants at current levels for community clinics that serve low-income people. The budget also provides $50 million for cost-of-living increases for vendors of state services such as childcare, foster care, and long-term care for the disabled an elderly.

Number 7: Child Abuse is Targeted
�Kids who�ve been harmed or are in danger can�t wait,� Gregoire said. �With an additional $10.2 million, we can support my requirement that child abuse investigations be launched within 24 hours in more urgent cases.�

Number 8: Vulnerable People are Protected
The budget keeps the safety net intact, providing a total of $4.3 billion for institutional and community care for children, the disabled, seniors and veterans. Also funded are support services for at-risk families, including emergency cash and food assistance, and investigations of child and adult abuse and neglect, interventions and foster care for children.

Number 9: More Services, Less Middle Management
�Reducing middle management in state government by 1,000 positions by the end of the next biennium will save $50 million that will be spent on direct services to Washington residents,� Gregoire said. She noted that performance audits and her Government Management and Accountability Program will make state government more efficient and accountable.

�And to be fair,� the governor added, �state workers get their fist cost-of-living adjustments in four years.�

Number 10: No Special Session
�We tackled the toughest issues and we got the job done within the 105 days allotted to a regular session of the Legislature,� Gregoire said. �I want to thank the leadership of the House and Senate, Speaker Frank Chopp and Senate Majority Leader Lisa Brown � as well as House Appropriations Committee Chairwoman Helen Sommers and Senate Ways and Means Committee Chairwoman Margarita Prentice � for making the 2005 Legislature � and this budget � so successful.�