Gov. Jay Inslee asked lawmakers on Tuesday to consider what he calls a modest supplemental budget for 2014, and he warned that legislators should ready themselves for much greater budget challenges in 2015.
The supplemental budget Inslee proposed Tuesday would add about $200 million in spending to the $33.6 billion, two-year budget legislators passed earlier this year. The increase in spending includes $6.9 million to expand prison capacity, $7.6 million for public schools and nearly $11 million to cover recent and anticipated wildfire damage.
"Holding steady this year will allow us to prepare for the next year when the situation and the task before us will be greater," Inslee, a Democrat, said during a Tuesday press conference. "Slow and steady improvements in our economy will not be enough to keep pace with the rising mandatory costs of state services."
The state's public schools will have 10,200 more students than expected, and the state's prisons will have about 300 more inmates than anticipated, Inslee said. His budget carves out $3 million for a teacher mentoring program, $250,000 for a drop-out prevention program and $300,000 to develop new math and science curricula.
The plan also sets aside $8.2 million in response to a settlement that requires the state to expand mental health services for children.
Washington State University President Elson Floyd praised Inslee's budget on Tuesday, saying it "reflects continued investment in higher education." Floyd pointed to new money for science, technology, engineering and math programs.
Inslee cautioned that while the state doesn't face a budget shortfall, as it has for the past several years, the state's economic growth is not likely to keep up with its growing expenses by the time the state crafts the next two-year budget in 2015. At that time, the state could face a shortfall of at least a couple billion dollars, he said.
For 2015, Inslee said lawmakers should close outdated tax loopholes to help fill that budget gap. He stopped short of saying whether other tax increases should be part of the solution. He also said he'll fight to get teachers a cost-of-living pay increase.
Sen. Andy Hill, a Republican from Redmond who is the chief budget writer for the Senate's Majority Coalition Caucus, said heading into a new session without a budget shortfall was good news. But he scoffed at the idea that new revenue would be needed in future years, saying lawmakers just need to prioritize spending.
"In a lot of ways, raising taxes is the lazy way out," he said. "If you've got a problem, it's very easy to raise taxes. The hard problem is when you dig in, you say how are we running government, how are we spending the money, how do we reprioritize that."
Nearly two years ago, the Washington Supreme Court ruled that the state is not fulfilling its constitutional duty to pay for basic education and is relying too much on school districts to raise extra dollars through local levies. The justices want to see the Legislature pay for previously adopted education reforms and proof of yearly progress toward completing the work by 2018. Inslee's budget office has estimated those costs at about $5 billion over the next few years.
The budget that passed earlier this year added $1 billion to the state's education system.
Sen. Ann Rivers, R-La Center, said Tuesday that the supplemental budget shouldn't include any drastic changes, such as making another large payment toward the state's K-12 education system, because the economy is still fragile. But 2015 is another story.
"In the next biennium, we are absolutely going to have to look at what our options are for making sure we meet (the court mandate)," Rivers said. Rivers, who was recently appointed to the state's Joint Legislative Audit and Review Committee, said one of her priorities is to make sure business tax incentives are still working for Washingtonians.
"A deal's a deal," Rivers said regarding tax breaks. "If you don't hold up your end of the bargain, then maybe we need to look at that deal and make sure it's still working."
Later on Tuesday, Inslee said by phone that he's uncertain a transportation package, which would raise gas taxes to cover projects around the state, will get passed next year. State lawmakers will convene Jan. 13 in Olympia for a 60-day legislative session, and some legislators hoped a transportation package would get passed before then.
"I'm hopeful," Inslee said. "There has been some step-by-step progression, but there's still real distance" between negotiators.
Inslee wouldn't comment on the details of a $12.3 billion transportation package drafted this fall by Sen. Curtis King, R-Yakima and transportation co-chair. King's proposal would raise the gas tax by 11.5 cents a gallon and contains $41.4 million in projects for Clark County. Business leaders in Southwest Washington have criticized King's plan for glossing over the region's transportation needs.
"There's no package yet," Inslee stressed, adding that several proposals are being considered. "Until we have a package, we'll have to make sure that it does have adequate commitments to all parts of the state."
The Associated Press contributed to this report.