Trivia!
In Capitol speak, what is a “guber?” (Hint, it’s not a type of candy you can purchase at the Dome Deli)
Revenue Updates/Budget Proposals Expected Next Week
On Wednesday, the state’s Economist Dr. Stephen Lerch provided the Economic and Revenue Forecast Council with an updated revenue forecast.
On the positive side, revenue continues to outpace projections, with nearly $3.3 billion more than forecasted expected over four years. This represents a $1.34 billion increase in revenue for the current 2019-21 biennium and a $1.949 billion increase for the upcoming 2021-23 biennium. Despite plummeting revenues in 2020 following the stay-at-home order, our state is nearly back to the pre-pandemic revenue numbers that were projected in February 2020.
These projections are aided by four factors: 1) passage of a series of federal stimulus packages; 2) a faster than expected vaccine distribution process; 3) a hot real estate and construction market; and 4) strong retail sales aided by people reinvesting their stimulus checks back into the economy.
On the negative side, since the November forecast there has been slightly slower than expected employment growth; rising oil and gasoline prices; and continued weakness in business sectors such as restaurants, the arts and entertainment. Not surprisingly, the largest risk to this forecast continues to be COVID, particularly the risk associated with the virus variants.
Members of the Economic and Revenue Forecast council include the Senate Ways and Means Chair Senator Christine Rolfes and House Appropriations Chair Timm Ormsby and many of the media questions were directed at these lead budget writers. In his remarks, Representative Ormsby stressed that while this forecast is positive news, there remains great uncertainty and emphasized the economic gains are not felt by all Washingtonians. Representative Ormsby discussed his priority of getting dollars (particularly the federal stimulus funds coming to the state) into the hands of those who need the resources most.
Office of Financial Management Director David Schumacher shared that Washington is slated to receive $4.2 billion in federal funding from the American Rescue Plan Act (there are other buckets of funding coming to the state), including for child care and local governments. Senator Rolfes shared budget writers are still working through details of the federal package and questions remain as the state is still awaiting federal guidance on a number of spending areas. Senator Rolfes stressed the importance of staying the course and ensuring the state’s commitments can continue to be met in the long-term when these one-time funds sunset.
Senate Republican lead budget writer Senator Lynda Wilson carried her caucus’ message that with this forecast, there are ample resources to meet the state’s commitments and extend supports to families, such as funding the Working Families Tax Credit. She shared her preference that reducing taxes, including property taxes, could benefit families and the economy. House Republican council member Representative Ed Orcutt urged that the work of the Tax Structure Workgroup conclude before any new revenue is enacted.
Now that the revenue numbers are known, Senate and House budget writers will be making final tweaks to their proposed budgets. Because of the complexity with the federal ARPA dollars, budgets will be released a little later than usual this year. The Senate is slated to release its budget on March 25th with a public hearing scheduled for public comment on Friday, March 26th in Senate Ways and Means beginning at 1:00 p.m. The Senate organizes their public comment hearings by issue area, with early learning listed third in the order. Rumor is the House will release its budget on March 26th with a hearing on Saturday, March 27th.
Bill Roundup
Update on Fair Start for Kids Act Bills. Both the Senate (E2SSB 5237) and House (E2SHB 1213) versions of the Fair Start for Kids Act bills continue to advance. E2SSB 5237 received a public hearing in the House Children, Youth and Families Committee on Thursday, March 18th and E2SHB 1213 will be heard in the Senate Early Learning and K-12 Committee on Monday, March 22nd with a vote scheduled on the House bill on Wednesday, March 24th and a vote on the Senate bill on either March 24th or 25th. As of this writing, there has not been a decision as to which bill will serve as the final vehicle.
As a reminder, an analysis of both bills as well as a side-by-side comparison can be found on the resources page of the Start Early Washington website.
DCYF Licensing Bill Advances to House Appropriations. On Wednesday, the House Children, Youth and Families approved SSB 5151, DCYF’s licensing bill. The bill contains a number of provisions. In terms of early learning, the bill waives child care licensing fees until June 30, 2023 and makes the outdoor preschool pilot program permanent. The bill next moves to the House Appropriations Committee for consideration.
Capital Gains. On Monday, the House Finance Committee held a public hearing on ESSB 5096, the Capital Gains measure. As described in previous updates, the intent is that the first $350 million raised from this new revenue source will be deposited into the Education Legacy Trust Account with a focus on supporting child care and early learning. It has not yet been scheduled for a vote.
On Deck Next Week
Senate Ways and Means Work Session on Federal Dollars. While not technically next week, the Senate Ways and Means Committee will hold a hearing at 2:30 today (Friday, March 19th) where they will receive a briefing on details of the American Rescue Plan Act (ARPA). As noted above, at Wednesday’s Revenue Forecast Council, Senate Ways and Means Chair Senator Christine Rolfes shared there are still a lot of questions and budget writers are still working through details of the federal package, but they do plan to include as many of the federal dollars as possible in the proposed budgets that will be released next week sometime.
It’s Cutoff Time Again. Two cutoffs are quickly approaching with the opposite house policy committee cutoff on Friday, March 26th and the opposite house fiscal committee cutoff quickly thereafter on Friday, April 2nd. It is hard to believe we are nearly 2/3 done with this legislative session. The last few weeks will be a flurry of final bill and budget negotiations.
Early Learning Facilities Bill to Receive Hearing. On Monday, ESHB 1370 will be heard in the Senate Ways and Means Committee. This bill would make improvements to the existing Early Learning Facilities program and rename the funds after former Representative Ruth Kagi. It is scheduled for a vote on Thursday, March 25th.
Start Early Luncheon April 22nd
Our biggest event of the year, the Start Early Annual Luncheon, is going virtual on April 22! You are invited to join us in celebration of the transformational power of starting early through inspiring stories from families, educators, corporate leaders and early learning advocates, including Former First Lady Michelle Obama and Clinton Boyd Jr., a national leader on social equity and parent engagement. Learn more and register.