Virtual Conversation | Recapping the 2021 Session: Legislative Republicans, May 18, 2021 Register

Republican budget proposal would drain the rainy day fund and avoid new taxes

Sen. Lynda Wilson, ranking member of the Senate Ways & Means Committee, has released a 2021 supplemental proposal and a 2021–23 operating budget proposal.

The 2021 supplemental would reduce appropriations from funds subject to the outlook (NGFO) by $1.421 billion. Revised 2019–21 appropriations would be $52.279 billion (still an increase of 17.0% over 2017–19).

Appropriations for 2021–23 would total $55.505 billion. Some notable items:

  • $300.0 million to eliminate state employee furloughs
  • $137.2 million for community behavioral health
  • $100.6 million for the working families tax credit (the proposal assumes passage of SB 5424)
  • Savings of $99.4 million through civil ward reductions at the state hospitals
  • Savings of $705.5 million by merging the Teachers’ Retirement System (TRS) plan 1 with the Law Enforcement and Firefighters’ System plan 1 (this would eliminate the TRS1 unfunded liability)
  • Savings of $821 million (over three years) by using the enhanced federal Medicaid match in lieu of state funds

Additionally, the proposal assumes passage of SB 5449, which would redirect sales tax revenues from vehicle sales to the transportation budget (reducing NGFO revenues by $721.3 million in 2021–23). It also assumes passage of SB 5422, which would reduce the business and occupation tax rate for manufacturers to 0% (reducing NGFO revenues by $77.7 million in 2021–23). No tax increases are included in the proposal.

The proposal would transfer $1.788 from the budget stabilization account (BSA, or the rainy day fund) to the NGFO. The budget would balance over four years. At the end of 2023–25, the unrestricted NGFO ending balance would be $220 million and the BSA balance would be built back up to $1.059 billion.

This article was provided by the Washington Research Council


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