House and Senate Supplemental Operating Capital and Transportation Budgets began emerging on Sunday afternoon, and public hearings were immediately scheduled for Monday afternoon. The emergence of the budgets is a strong signal that the Legislature will complete its work by its March 10 adjournment deadline. The budget process, however, is difficult for stakeholders. For example, all the budgets are typically released the day of their public hearings. The operating budgets are close to 900 pages long, and the capital and transportation budgets are about 150 pages each. Hence, stakeholders barely have time to understand the highlights before the public hearings. Nonetheless, it’s the customary process. Each of the respective committees will pass their budget proposals by the end of the week, and both the House and Senate may take up their spending plans this weekend. Once passed, the process of negotiating final budgets between the House, Senate, and Governor’s office can be initiated.

Substantively, the House and Senate Supplemental Operating Budgets use nearly all the growth in state revenues and federal relief funds to bolster spending – the House proposal increases general fund spending by $6.2 billion, and the Senate increases by $4.7 billion. Both the House and Senate propose to allocate $2 billion of general fund revenues for transportation projects, provide about $400 million to backfill the paid family and medical leave program, and provide about $200 million for increased capital spending. The Senate invests $500 million for grants to school systems in need of seismic upgrades. Significantly, the House proposal allows for a three-day Sales Tax Holiday, championed by the Washington Retail Association. Funding is provided to ensure the proposal does not harm local governments.

With respect to Transportation, the Governors of Idaho, Oregon, and Alaska, along with many legislators from those states, have threatened to retaliate against Washington imports by imposing taxes or fees on Washington State products if the $0.06/gallon tax on exported fuel is enacted as part of the transportation funding package. Suffice it to say that most legislators, and citizens, were unaware of how much motor vehicle fuel Washington refineries provide to our neighboring states.