Gov. Inslee’s vetoes increase unrestricted ending fund balance by about $242 million in 2019–21

Source: Washington Research Council, April 4, 2020

Friday afternoon, Gov. Inslee vetoed sections of the operating budget and numerous bills that affected state revenues. (Here is his operating budget veto message and here is a table of the vetoes. Here is our policy brief on the budget as passed by the Legislature.)

Accounting for his vetoes, appropriations from funds subject to the outlook plus the workforce education investment account (NGFO+WEIA) are reduced by $186.5 million in 2019–21 and $210.2 million in 2021–23. This makes total NGFO+WEIA appropriations for the biennium $53.663 billion, a 20.1 percent increase over 2017–19.

The governor’s veto message notes,

Circumstances have changed dramatically since the 2020 supplemental operating budget was approved by the Legislature last month. The COVID-19 pandemic is having catastrophic effects on the health and welfare of Washingtonians. It will also have a major impact on the economic health of our state. My staff and I have conferred with Democratic and Republican leaders in both the House of Representatives and Senate, and we all agree that we must prepare now for the effects of the lost revenue that will result from this pandemic.

The supplemental budget includes task forces, work groups, reports, pilot programs, new programs, and program expansions that would be smart investments for the state under normal circumstances. However, under the extraordinary situation we now face, we cannot afford all of them at this time.

Some notable vetoes include:

  • Guidance counselors in high poverty elementary schools ($31.8 million in 2019–21, $84.0 million in 2021-23)
  • Pupil transportation backfill ($29.5 million in 2019–21)
  • Paraeducator training ($14.4 million in 2019–21, $21.0 million in 2021–23)
  • Small school grants ($4.0 million in 2019–21)
  • Early Childhood Education and Assistance Program (ECEAP) rate increase ($6.9 million in 2019–21, $14.9 million in 2021–23)
  • Working Connections Child Care co-pay reduction ($6.0 million in 2019–21, $12.1 million in 2021–23)
  • Increase in primary care rates ($9.9 million in 2019–21, $39.7 million in 2021–23)
  • Climate resiliency account ($50.0 million in 2019­–21)

Also, the Legislature had included $15.0 million for aerospace workforce development grants. The governor’s veto message notes,

The proviso is unclear and does not identify which types of non-profit, non-governmental or training entities are eligible. This funding should support our efforts to grow state registered apprenticeship and incumbent worker advancement across mechanical and professional occupations in the aerospace field. Therefore, I am directing the Department of Labor and Industries to prioritize applications with demonstrated employer-worker partnership, active worker engagement, and sustainability to meet this intent.

Additionally, the governor vetoed a transfer of $41.3 million from the general fund–state to the WEIA for FY 2020. He also vetoed several bills that had been estimated to reduce state revenues by a total of $13.6 million in 2019–21 and $35.1 million in 2021–23.

Altogether, I estimate that these vetoes increase the unrestricted 2019–21 NGFO ending balance to about $1.159 billion (an increase of about $242 million over the budget as passed by the Legislature).

(Gov. Inslee’s office says the operating budget vetoes total $235 million in 2019–21. That includes the $186.5 million in appropriations vetoes, the vetoed transfer to the WEIA, and $6.7 million that would have been transferred to cities under EHB 1948, which was vetoed. I account for the $6.7 million as vetoed revenue legislation.)