Commentary: Breaking Down the Three State Budgets Under Consideration This Session


In Olympia, we’re in the last few weeks of the legislative session and attention is turning to the state’s budgets. I’m getting lots of questions about those budgets, so here’s some background on how they work. And where some of us are focused.

Washington state has three budgets, which all follow a two-year cycle. The Legislature sets the budgets during the “long” 16-week legislative session that takes place during each odd-numbered year.

The three state budgets are the operating (the largest by a long stretch, currently just under $70 billion for the coming two-year cycle); transportation (the size of which is a little harder to explain, because it includes about $12 billion of state taxpayer money and then federal dollars on top of that); and capital (about $8 billion for the two years). Details on all of these budgets won’t be final until the session ends, currently scheduled for the end of this month.

The operating budget, as its name implies, funds the ongoing operations of state and local government agencies. About half (used to be a little more than half, now a little less) goes to the 295 public school districts around the state. A large part goes to paying for health care and medical services for people in Washington. And a growing piece goes to support government housing. Property taxes, general sales taxes, business and occupation taxes and other state fees fund this budget.

The transportation budget funds road and bridge maintenance, the state ferry system, state patrol and various other related activities and projects. This budget gets money from the sales tax on gasoline and diesel fuel, vehicle license fees, drivers license fees, etc. Occasionally, you’ll hear about “transportation packages” being proposed in Olympia. These are separate deals — usually funded by borrowing — that exist outside of the regular transportation budget.

The capital budget funds infrastructure — buildings, certain utility systems, park development, etc. It’s funded partly by certain fees but mostly by state-issued bonds. Normally, I oppose state bonds, which are debts that we pass on to our children and grandchildren. But, in the case of this budget, the bonds pay for hard assets that hold value; so, they’re more like a mortgage on a house: rational debt. 

The transportation and capital budgets are usually fairly bipartisan. The operating budget, at least in recent years, has been more political.

The governor suggests a version of each budget. But those proposals are just that: proposals. The Legislature writes the budgets.

Both chambers of the Legislature — the state Senate and House — write, debate and vote on separate versions of each of the three budgets. Then, a small conference committee made up of members from each chamber negotiate final versions. A lot of effort goes into the initial drafting and debating. And a lot happens, very quickly, when the conference committees meet to merge the budgets.

As I write this, between debates over various bills on the House floor, the conference committees are doing their work on the three budgets. As I mentioned, things move fast there. Last year, a budget conference committee killed a well-worked deal to keep the Naselle Youth Camp open.

This year, the key issue to watch in conference committee is how much additional money the state spends on K-12 special education.

Earlier this year, I committed to local teachers and school administrators that I would support fully funding K-12 special education. The formulas for calculating these numbers are complicated — but most people involved agreed that “fully funded” meant adding approximately $1 billion to those programs for the coming two-year cycle. So far, the House hasn’t done that. The draft budget only boosted special education funding by about $280 million. 

That was a major reason I voted “no” on the House operating budget. The Senate funded special education a little more but, frankly, even their number wasn’t high enough. I hope that, in the conference committee negotiations, the consensus will be to raise those funds to the “fully funded” level. The negotiations seem to be heading in a better direction, but they still have a long way to go. Without fully funding K-12 special education, I will remain a “no” vote.

One last, relevant point: state budgets often refer directly or indirectly to separate “policy” bills that create financial obligations for the state. These separate bills are often considered “necessary to implement the budget” (NTIB). Who determines if a bill is NTIB? Primarily, the speaker of the House and the Senate majority leader. NTIB status is important because it exempts a bill from the normal schedule deadlines — one reason bills can never be considered “dead” until the session is officially over.

And that’s why the last few weeks of each legislative session are usually so interesting.


State Rep. Jim Walsh, R-Aberdeen, represents the 19th Legislative District in the Legislature.