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|Highlights of the Governor's
1997-99 Budget Recommendations
ASHINGTON STATE'S population is currently projected to grow by
more than one million people during the decade of the 1990s and
reach a total of 5,930,000 by the year 2000. Increasing at the
fastest rate since the war years of the 1940s, this new population
boom is already putting heavy pressure on the state's public education
system, its prisons, and its natural resources. Budget proposals
introduced by Governor Lowry for the 1997-99 Biennium provide
the means to meet this challenge and lay a solid foundation for
1997-99 Operating Budget
Governor Lowry is recommending a $19.531 billion General Fund-State
(GF-S) operating budget for the 1997-99 Biennium, with a proposed
appropriation of $9.575 billion for Fiscal Year (FY) 1998 and
$9.956 billion for FY 1999. As illustrated below, approximately
57 percent of all expenditures proposed by the Governor would
be used to help finance public schools, colleges, and universities.
When all funds are considered, including federal funds and dedicated
revenues, the Governor's total proposed operating budget is $36.6
Proposed Operating Budget for 1997-99
Proposed Operating Budget for 1997-99
$$ in millions
$$ in millions
Children & Family Services
Children & Family Services
Medical Assistance, L/T Care
Medical Assistance, L/T Care
Other Human Services
Other Human Services
* Transportation equals one-tenth of 1 percent.
** Other includes debt service, pensions, other education, and special appropriations.
*** Transportation does not include capital transportation costs.
The Governor's proposal calls for increasing GF-S expenditures
by $1.761 billion above the $17.770 billion budget plan for the
1995-97 Biennium, an annual average of 5 percent over the next
two years. This is nearly identical to the combined rates of
inflation and population growth anticipated in the 1997-99 Biennium,
but $235.6 million higher than the applicable expenditure limit
as currently defined by Initiative 601. As discussed in Part
II of this document, the Governor is proposing two changes in
the formula used to calculate the spending limit so that the state
can at least keep pace with population growth and inflation.
With these modifications, the GF-S spending limit applicable to
the Governor's budget proposal is $19.545 billion, approximately
$14.0 million higher than his proposed level of expenditures.
Below is a brief summary of the key elements of the Governor's
operating budget proposal for the 1997-99 Biennium, which addresses
major issues facing the state, provides targeted tax relief for
homeowners, and leaves $303.4 million in reserve to address any
- Supporting Public Schools:
State funding for kindergarten through grade 12 education (K12)
would grow by $694 million during the 1997-99 Biennium, the largest
increase of any proposed by the Governor for the next two years.
These funds would be used to support rising enrollments, education
reform, technological improvements, levy equalization, and cost-of-living
adjustments (COLAs) for teachers and other K-12 employees.
- Expanding Affordable Access to
Higher Education: The first wave of the "baby
boom echo" is just graduating from high school and will put
tremendous pressure on the state's higher education system over
the next decade. To prepare for these students, the Governor
is calling for $298.9 million in additional funding (including
$67.9 million in new tuition revenues) to increase enrollments,
expand financial aid, and make other critical investments in the
state's higher education system. The Governor is also proposing
a pre-pay tuition plan that will allow families to avoid higher
- Responding to Federal Cutbacks:
Washington is expected to lose approximately $619 million in
federal funding over the next two years as a result of federal
cost-cutting efforts, including reductions in food stamps, aid
to legal immigrants, and other assistance for low-income families
mandated by the new federal welfare law. The Governor's proposal
includes $204.5 million GF-S to help mitigate the impact of these
cutbacks on low-income families, senior citizens, and people with
- Improving Children's Services:
Recent tragedies involving children under the state's supervision
point to the need for both closer scrutiny of - and better support
for - those entrusted with this responsibility. The Governor's
budget proposal provides $74.5 million ($58.7 million GF-S) to
cover the carry-forward costs of improvements approved by the
1996 Legislature, reduce workload ratios for Child Protective
Services workers, provide substance-abuse treatment to more at-risk
families, and make other improvements.
- Meeting the Demand for Affordable
Health Care: The Health Services Account was created
in 1993 primarily to increase access to health care for low-income
people through the Basic Health Plan and Medicaid services for
children below 200 percent of the federal poverty level. Strong
demand for these services has created a deficit in the account,
which the Governor would address by raising taxes on tobacco products
and removing a tax exemption for most non-profit hospitals.
- Preserving the Employment and
Training Trust Fund: Since its creation in 1993, the
Employment and Training Trust Fund has helped to provide training
to 20,000 dislocated and unemployed workers at state community
and technical colleges, and improve the state's capacity to help
the unemployed find jobs. The Governor would remove the sunset
clause that would terminate the Trust Fund in 1998, retain the
offset in unemployment insurance taxes that sustains the fund,
and cap participation in the program at 7,200 people per year.
- Protecting Washington's Water
Resources: Rapid population growth is exerting increasing
pressure on Washington's vital water resources. This has led
to growing conflicts between user groups, delays in permitting
decisions, and the strong likelihood that more fish stocks will
be listed as "threatened" or "endangered"
under the federal Endangered Species Act. To protect these natural
resources and prevent the economic disruption that would result
from additional endangered species listings, the Governor is proposing
a plan for consideration by the Legislature, which includes a
bond measure for submittal to the state's voters that would finance
a comprehensive strategy for watershed management. He would also
maintain the Office of Marine Safety (OMS) as an independent agency
for state oil-spill prevention efforts, saving costs associated
with moving OMS to the Department of Ecology.
- Expanding Tax Deferrals for Homeowners:
In conjunction with his budget recommendations, the
Governor is proposing a tax deferral program that would allow
homeowners with an income of $50,000 or less to defer the portion
of their property tax bill that exceeds 5 percent of adjusted
gross income. Under this plan, a homeowner with an annual income
of $40,000 could defer any property taxes over $2,000 per year.
Approximately 21,000 homeowners - many of them senior citizens,
dislocated workers, or single parents - are expected to participate
in the program, at a cost to the General Fund of $40.9 million
in the 1997-99 Biennium.
- Authorizing COLAs for Public
Employees/Grant Recipients: Since 1993, salaries for
K-12, higher education, and state employees have fallen behind
the rate of inflation by approximately 5.8 percent. The same
is true for income assistance grants and payments to vendors who
provide state services under contract. The Governor's budget
proposal includes $471.5 million to provide COLAs to these groups
at the rate of inflation over the next two years and grant additional
salary adjustments to address special compensation issues.
- Preventing Domestic Violence:
In response to the large number of deaths and injuries due to
domestic violence, Governor Lowry is proposing a $5.3 million
initiative (including $3.9 million in federal funds) to improve
services for children and other victims, increase public awareness
of the problem, and provide training to judges, prosecutors, law
enforcement officers, and state employees in how to spot - and
provide assistance to - victims of domestic violence.
- Targeting Juvenile Offenders:
The Governor's proposal, which incorporates recommendations for
juvenile rehabilitation by the Sentencing Guidelines Commission,
increases penalties for serious offenses, imposes stricter conditions
on parole, permits greater judicial flexibility in less-serious
offenses, strengthens early intervention efforts, and promotes
greater parental involvement. These measures, designed to protect
public safety and improve rehabilitation rates, will cost $16.2
million GF-S in the 1997-99 Biennium.
- Reducing Prison Costs:
In less than a decade, Washington's prison population has doubled
in response to longer sentences for certain crimes mandated by
the Legislature and the voters. To help control the rising cost
of corrections, the Governor is proposing measures to delay opening
some new prisons, reduce inmate health-care costs, and implement
less-costly sentencing options for non-violent drug offenders.
These measures are expected to save $11.1 million GF-S in the
1997-99 Capital Budget
The Capital Budget for 1997-99 proposes new projects totaling
$1.8 billion, of which $934.2 million is financed by general fund-supported
bonds. An additional $1.4 billion is proposed in reappropriations
to complete ongoing projects. The Governor's supplemental budget
proposal also recommends $112.1 million in general fund appropriations
to move forward on four key construction projects, discussed in
the next section of this document. Funding these one-time capital
projects from available general fund cash allows other critical
capital projects to be funded in the 1997-99 Biennium within the
7 percent statutory debt limit.
- Capital Investments in Education
Facilities: Education is the largest sector receiving
proposed appropriations in the 1997 supplemental and the 1997-99
capital budget. Proposed funding will support public school construction
grants, construction of a new collocated branch campus in Bothell,
technology investments in distance learning, construction of medical
and other research space, and preservation of existing facilities.
- Serving Growing Offender Populations:
The amount of $155.6 million is provided to construct a major
new correctional facility for adult males in Grays Harbor County.
Also funded are initial investments to prepare for a new women's
prison and a new facility to house juvenile offenders. These
facilities are necessary to meet rising populations.
- Protecting the Environment and
Washington's Quality of Life: The Governor's budget
includes $70 million to set aside critical wildlife and
recreational lands from future development, an investment that
cannot be deferred or the opportunity will be lost forever. It
also dedicates $206.2 million to continue water quality projects,
and pollution and toxic control activities through the Department
- Building Healthy and Economically
Vital Communities: Nearly $246 million is provided
for a variety of community-directed programs, including loans
administered through the Public Works Trust Fund, financing for
moderate- and low-income housing and weatherization, Community
Economic Revitalization Board loans and grants, capital assistance
for community-based family services, and grants for local arts
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|Highlights of the Governor's
1997 Supplemental Budget Plan
HE GOVERNOR'S 1997 SUPPLEMENTAL BUDGET proposal makes several
adjustments in annual expenditures necessary to complete state
operations in the 1995-97 Biennium. Most of these revisions respond
to changes in caseload and enrollment forecasts, emergency costs
for the state's response to forest fires and winter storms, and
other unanticipated expenses in individual agencies. The Governor's
proposal also responds to federal cutbacks affecting state programs
in the current biennium, setting the stage for initiatives recommended
in the 1997-99 budget.
In addition, the Governor proposes investing $112.1 million in
General Fund-State (GF-S) resources available in the current biennium
to address four high-priority construction projects around the
state related to education and the arts. These projects include
the Harborview Research and Training facility at the University
of Washington, a new Health Services Facility at the Joint Center
for Higher Education in Spokane, various K-12 school construction
projects at sites throughout the state, and the Seattle Symphony
hall (Building for the Arts program). Funding these projects
through one-time expenditures in the operating budget will ensure
their construction at a time of competing demands on the state
|Components of the Governor's Proposed FY 1997 Supplemental Budget
Dollars in Millions
||- $ 10.2
|Replacement of Federal Program Losses
|Investments in Education Capital
|All Other Adjustments
The Governor's supplemental budget proposal accommodates modest
changes in public school enrollments, Department of Social and
Health Services (DSHS) caseloads, and corrections facilities,
netting to an overall savings of $10.2 million GF-S. The major
programs with changes are described below.
Revised enrollment forecasts result in a savings of $5.6 million
in the supplemental budget. Changes in enrollment forecasts for
the 1996-97 school year represent a decline of 161 full-time equivalent
(FTE) students in basic K-12 enrollment and 638 students in Special
Education. These reductions are partially offset by an increase
of 259 FTE students in vocational education and an increase of
383 FTE students in bilingual programs.
Department of Social and Health Services
Various caseload changes in DSHS net to a savings of $7.1 million.
These changes are described below.
- The Family Foster Care caseload showed a slight decline,
while Adoption Support will increase by an average of 13 percent.
Estimated average cost per month per child is expected to increase
in each program.
- The Juvenile Rehabilitation program is experiencing reductions
in community beds as well as institutional overcrowding. Savings
are partially offset by a delay in implementing the Basic Training
- In Long Term Care Services, increases in Community Options
Program Entry System (COPES), Adult Day Health, and case management
are offset by reductions in Chore Services, Medicaid Personal
Care, and community residential and nursing home services.
- The Medical Assistance forecast assumes caseload reductions
in Categorically Needy programs, offset by increases in General
Assistance and Alcohol and Drug Abuse Treatment and Support Act
(ADATSA), higher per capita costs in the Medically Indigent program,
increased Medicare premium payments, and increased costs for new
drug treatment (protease inhibitors) for AIDS clients.
Department of Corrections
- State corrections facilities are expected to experience an
increase of 569 beds (Average Daily Population) above prior estimates
in Fiscal Year 1997. This will result in an additional cost of
$2.6 million GF-S.
The Governor's proposed supplemental budget includes several items
related to costs for emergency assistance resulting from fires
and winter storms.
- In the Department of Natural Resources, $1.5 million GF-S
is made available for additional assistance for fire protection
and prevention efforts on forest lands; another $4.2 million GF-S
is added to the current budget for the actual and expected expenses
- A total of $1.4 million GF-S is provided for the cost of firefighters
and equipment employed to help local jurisdictions after activation
of the State Fire Mobilization Plan for six fires in the summer
- The National Guard and Department of Natural Resources crews
responded to widespread damage from snow and ice storms in Spokane
in November 1996. These expenses amount to $51,000 GF-S.
- The Governor is recommending the addition of $1.4 million
GF-S to the Governor's Emergency Fund as a potential resource
for winter storm damage costs during the remainder of the biennium.
Replacement of Federal Programs
In the 1996 supplemental budget, the Legislature appropriated
funds to replace a limited number of federal funding losses that
adversely affected services to state citizens. Federal actions
since the last legislative session - specifically welfare legislation
and the new budget that began in October 1996 - have made it evident
that the state will continue to experience reductions in federal
As the federal government reduces funding for the Social Services
Block Grant and changes eligibility for such programs as food
stamps and Supplemental Security Income, the state has experienced
a corresponding increase in demand for budgeted services. These
actions, together with a reduced assumption of federal Title IV-A
funds for the Juvenile Rehabilitation program and additional expenses
for implementing federal programs, result in a net cost to the
state of $32.7 million during the 1995-97 Biennium.
Investment in School Construction
and the Arts
The Governor is proposing four capital projects that will help
promote future access to education and the arts:
- K-12 School Construction:
The Governor proposes adding $50 million in GF-S cash
to boost school construction resources in the current biennium.
This funding, together with $50 million in capital bond funds
provided through the Trust Land Transfer program, will supplement
resources for school construction normally available from state
timber sales. These projects will benefit various school districts
throughout the state.
- Harborview Research and Training
Building (University of Washington): A new 179,000-square-foot
building will be built directly east of the Harborview Medical
Center on a site owned by King County. The new facility will
provide additional, modern space for research and training activities
of the medical school faculty that staff the Medical Center.
This project has previously received design funds through the
state capital budget. The supplemental budget contains $38.5
million GF-S for this project.
- Health Services Building (Joint
Center for Higher Education): An additional $21.0
million GF-S supports construction of a new 100,000-square-foot
Health Services building on the Joint Center for Higher Education
campus in Spokane. This facility will house teaching, laboratory,
faculty office, and support space for health sciences instruction
programs of Eastern Washington and Washington State universities.
The building will be constructed in such a way as to allow a
20,000-square-foot addition for research activities to be added
at a later date.
- Building for the Arts - Seattle
Symphony Hall: The supplemental budget includes $2.6
million GF-S to complete the state's share of the cost of building
the Seattle Symphony hall. This project is funded through the
Department of Community, Trade, and Economic Development's Building
for the Arts program.
The Governor's supplemental budget also funds the following critical
items in 1995-97.
- Department of Health/AIDS Prescription
Drug Program: The AIDS Prescription Drug Program has
experienced significant growth due to the promise of triple-drug
therapy in reducing the level of virus in AIDS/HIV patients.
As a result of increased enrollment and increased drug costs,
a supplemental appropriation of $1.8 million is needed.
- State Park Operations:
Because of projected fee revenue shortfalls, $2.4 million
in additional GF-S funding is provided to maintain existing service
levels at state parks in both the current and ensuing biennium.
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