On March 25, the House announced their 2019-21 proposed budgets (operating and capital). These proposed budgets are an important step in helping the Legislature develop its budgets for the next biennium. We expect to see Senate proposals later this week or early next week. Budget negotiators will then work on a final budget. We are all hopeful this will be done before the end of the 105 day regular session, April 28.

The proposed operating budget adds $8 billion in new spending, including increased funding in the state’s behavioral health system. After spending the last biennium focusing on the state’s basic education system, this budget provides increased spending on the state’s mental health system, providing money for a proposed University of Washington psychiatric teaching hospital and expanding community mental health beds. The proposed capital budget also funds access to behavioral health services within the state’s community health centers by investing $4.2 million in seven distinct projects and providing an additional $40 million in competitive behavioral health capital grants.

The $52.6 billion proposed state operating budget largely funds existing government services. Of the proposed $8 million increase, $5.8 billion is required to maintain services at current levels and to continue to fully fund public schools under the McCleary school funding lawsuits. The proposed budget would leave the state with about $2.7 billion in total reserves at the end of the biennium.

To help fund this increased spending, the House proposed changes to Washington’s tax system, including a new 9.9 percent capital gains tax on the sale of stocks, bonds and other assets, geared toward very large capital gains. In addition, they propose increasing the state B&O tax on services and changing the state’s real estate excise tax from a flat rate to a progressive graduated rate that would lower the tax on the sale of properties selling for $500,000 or less and increase tax for sales of properties valued at $1.5 million or more. These proposed tax changes would raise nearly $1.4 billion in the next biennium.

CHNW/Association Legislative Priorities

  • Health Care Safety Net. No cuts to the health care safety net.
  • Loan Repayment. “Sufficient funding” is provided to fund the WA Health Corps, which would include the newly established Behavioral Health Loan Repayment Program.
  • CHC Behavioral Health capital investments. $4.2 million to fund 7 distinct projects and $40 million in competitive grants.
  • CHC Dental capital investments. $675,000 to fund two projects.
  • Integrated Treatment Credentialing. Not addressed in the House operating budget.
  • Dental Managed Care. $29.4 million to restore savings that will not be achieved.

Additional Items to Note

  • $122.8 million to fund state hospital operations and safety initiatives.
  • $120.6 million to restore savings assumed from integrating behavioral health and physical health.
  • $49.7 million to restore savings assumed in the 2017-19 budget from implementing a single Medicaid preferred drug list.
  • Funding for doula services through the Maternity Support Services program.
  • $15.8 million to fund bi-directional behavioral health rate increase for health and behavior codes and psychotherapy codes.
  • $1.5 million to fund a state-based public option.
  • $1.5 million to fund the continued operation of the All-Payer Claims Database (APCD).