The state Senate unveiled its budget this morning.
It proposes $900 million in new revenue—$518 million in closing tax exemptions; a .3 percent temporary sales tax increase ($312 million); and an increase in the cigarette tax by a $1 a pack for $86 million.
To deal with the regressive hit of a sales tax increase, senators are pitching a working families credit, a rebate for lower-income people based on the federal earned income tax credit, which will cost $33 million.
They’re assuming $582 million in federal money. And they are pushing a Sen. Phil Rockefeller (D-23) bill to create a system for tax exemptions where new exemptions would have to be offset by eliminating an existing exemption.
Weird budget for environmentalists: As we noted this morning, they’re killing the TransAlta coal plant tax break, but they’re also killing a tax incentive for renewable energy.
Here’s another note—unlike Governor Chris Gregoire’s budget, the Senate budget does not include an increase in the hazardous substance tax, one of the environmental community’s top priorities.
I’ve posted the budget specifics below the jump.
Senate solution to this year’s $2.8 million revenue gap
- Transfers and adjustments: $498 million (includes use of Rainy Day Fund)
- Federal funds: $583 million
- Total reductions: $838 billion
- New revenue: $918 million
- Ending fund balance: $595 million
Early learning highlights
- Protects Working Connections Childcare
- Protects Early Childhood Education Assistance Program
- Funds $99 million beyond Book I and $49 million greater than the Book II.
K-12 highlights
- Protects levy equalization for property-poor school districts (dedicated tax)
- Protects All-Day kindergarten (dedicated tax)
- Protects the Highly Capable program
- Funds $149.8 million beyond Book I – with all cuts outside basic education – and $26 million less than the Governor’s Book II budget.
Higher education highlights
- Protects the state financial aid Need Grant
- funds 6,000 worker retraining slots
- Funds $193.4 million beyond Book I and $54 million greater than Book II.
Health care highlights
- Protects 60,000 low-income individuals enrolled on the Basic Health Plan (dedicated tax)
- Preserves current Apple Health for Kids eligibility
- Protects maternity support services
- Protects Medicare Part D copays
- Funds $220 million beyond Book I and $12 million less than Book II. Significant federal relief for health care is assumed, which reduces state spending by over $582 million.
Human services highlights (Other Human Services + GAU)
- Reforms GA-U and ADATSA
- Protects foster home payments
- Protects alcohol and chemical dependency treatment
- Protects home care and home care training for seniors
- Funds $169 million beyond Book I and $19 million more than Book II.
Institution closures
- Francis Haddon Morgan autism center
- Maple Lane juvenile rehabilitation center
- MacNeil Island Prison
(reduced to 512 beds)
- Larch corrections center
- State printer
Tax equity and loophole reform
- Funds the Working Families Tax Credit, which provides up to 370,000 Washington residents a 5 percent state match of their federal Earned Income Tax Credit (EITC) ($32 million)
- Funds a B&O tax credit for small businesses that create family wage jobs ($9 million)
- Creates a process to evaluate all existing tax loopholes
New revenue
- Closes over a half a billion dollars worth of tax loopholes ($518 million)
- Raises the cigarette tax by $1 per pack ($86 million)
Increases the general sales tax by three tenths of a cent until 2013 ($313 million)
