Girl playing in the park

NEW: Notes From Olympia November 2024 Interim Edition

Included in this edition: State Budget Crisis, State Election Results, Caseload Forecast, New Legislative Website, Start Early Washington Resources and Trivia!

Erica Hallock November 22, 2024
  • Policy and Systems
  • Blog

Washington Capitol in October

The Capitol building on a calm October day.

(Photo Credit: Erica Hallock)

Trivia!

Who cast the first Electoral vote for Ronald Reagan in the 1976 election? Hint: they are a current Washington State Senator.

Bonus Question: What did former Governor John Spellman call this now State Senator and his then-group of House Republican colleagues during the 1982 state budget crisis?

State Budget Shortfall Woes to Dominate 2025 Legislative Session

With the 2025 legislative session right around the corner, all attention is on the state’s growing budget shortfall. Here are some resources and context to help understand Washington’s precarious financial situation.

OFM Director Calls on State Agencies to Prepare Budget Reductions:

On November 8, Office of Financial Management (OFM) Director Pat Sullivan released a memo to state agency directors, statewide elected officials and presidents of higher educational institutions directing them to work with their OFM analyst to propose budget reduction options for the 2025 supplemental budgets and the 2025-27 biennial budgets by November 15, 2024.

In the memo, Director Sullivan projects a budget deficit ranging from $10-12 billion over the four-year outlook. In short, the state’s current revenue is insufficient to meet current commitments.

Director Sullivan suggests agencies consider actions that will produce immediate savings such as hiring freezes, delaying programs that have not yet been implemented, identifying under-expenditures and use of non-State General Fund wherever possible.

On November 19, the OFM website was updated to include a Budget Reduction FAQ and on November 20, the site was updated to include the various state agency budget reduction options. It is important to emphasize these are all just options and the budget writing process has just begun. If an item is on one of these lists, it does not mean a reduction is imminent.

Resources: To learn more about Washington’s fiscal outlook, here are a few resources.

State Revenue Forecast:

On November 20, the Washington State Economic and Revenue Forecast Council met to receive the latest revenue forecast from its Executive Director, Dave Reich. The bottom line is Near- General Fund collections are down $400 million through 2029 from the September 2024 forecast.

This breaks down as:

  • 2023-25 biennium (current): (-$89M)
  • 2025-27 biennium: (-$181M)
  • 2027-29 biennium: ($-131M)

The primary reasons for the drop in revenue, that continue to be lower than forecasted, are retail sales and reduced Business and Occupation Tax collections. The forecast suggests that reduced inflation and lower interest rates will lead to improved revenue growth. So, good news on the horizon, hopefully.

Overall state revenues are projected to grow 2.6% between the 2021-23 and 2023-25 biennia and by 7.6% between 2023-25 and 2025-27 biennia.

When asked about plans for Governor Inslee’s final budget, OFM Director Pat Sullivan replied that they are considering the release of a “book one” budget consisting of all-cuts as well as a “book two” budget that would offset some of the cuts with new revenue. Additionally, Sullivan noted that much of the drivers of the budget crunch lie in increased costs in maintenance level expenses and he specifically cited new expenses coming online for the Fair Start for Kids Act for Working Connections Child Care and ECEAP. Finally, Sullivan noted that overall state revenue for the upcoming 2025-27 biennium is down about $1 billion from earlier projections, further challenging the budget process.

Senate Ways and Means Chair June Robinson and House Appropriations Chair Timm Ormsby were asked about their approaches to the budget crisis. Both chairs responded that they are weighing a range of options, including evaluating recommendations from state agencies, recommendations they will receive from the outgoing and incoming Governor, revenue options as well as potentially delaying any ramp-ups of new programs slated to go on-line.

Next Steps for State Budget:

Outgoing Governor Jay Inslee will release one final budget in mid-December. Per state law, he is required to submit a balanced budget. With our state’s projected deficit, he can meet this requirement by proposing budget cuts, new revenue, or a combination of the two. We will be producing a summary of this budget following its release.

Incoming Governor Bob Ferguson will also have a chance to put his mark on the budget, but given the timing and the scarcity of funding, it is highly likely he will rely on Governor Inslee’s budget as a base.

State Election Results

In what can only be deemed as NON-breaking news, the following is a brief recap of some of the key take-aways from the state election results:

  • Governor-Elect Ferguson hitting the ground running. Shortly after it was clear he was heading from the Attorney General’s Office (AG) to the 2nd Floor of the Legislative Building, Governor-Elect Bob Ferguson announced his senior staff, most of whom he is bringing over from the AG’s office. He also announced a 53-member transition team designed to assist him in preparing for his new role. Note their first meeting is scheduled for Friday, November 22nd – the same day you are receiving this newsletter.
  • Capital Gains Funding Preserved. More than 64% of Washingtonians voted to preserve capital gains funding to support investments in education, including in early learning.
  • New State Senate Leadership. On November 11th, Senate Democrats selected Senator Jamie Pedersen from the 43rd Legislative District in Seattle to serve as its Senate Majority Leader. Senator Pedersen assumes this role after Senate Majority Leader Andy Billig of Spokane announced he would not seek re-election. With this appointment, Washington is the first state in the nation to have both of its chambers led by LGBTQ+ leaders at the same time!
  • New Addition to House Leadership. Earlier this week, House Democrats voted to affirm the leadership of Speaker Laurie Jinkins from the 27th Legislative District in Tacoma as well as Majority Leader Joe Fitzgibbon from the 34th Legislative District in Burien. They also elected Representative Chris Stearns from the 47th Legislative District in Auburn to serve as the new Speaker pro tempore.
  • Democrats pick up one seat in the Senate and one in the House. While the Senate race in the 18th Legislative District is still close and will likely go to a recount, it does appear that the Democrats picked up one seat in both the Senate and the House. If Adrian Cortes prevails over Brad Benton in the 18th Legislative District Senate race, Democrats will hold a 30-19 advantage in the Senate and Democrats will hold a 59-39 advantage in the House (the Democrats picked up a seat in the House in the 26th legislative district when Adison Richards defeated Jesse Young for an open seat that was previously held by Republican Spencer Hutchins who decided not to run for re-election).
  • More legislative changes coming. We’re not quite done yet with the moving chairs. A new Senator will need to be appointed in the 26th legislative district as sitting Senator Emily Randall was elected to Congress. In addition, Senator Karen Keiser of the 33rd legislative district is expected to resign shortly, and her seat will need to be filled. Finally, the seat of Senator Patty Kuderer of the 48th Legislative District will need to be filled after she was elected as the incoming state Insurance Commissioner. Of course, if any of the seats are filled by House members, the process to fill the House seats will begin.
  • Committee Configurations and Assignments. We expect announcements shortly about legislative committee structures, membership and timing. Stay tuned!

Updated Caseload Forecast Released

On November 13, the Washington state Caseload Forecast Council met to release the latest projected caseloads for entitlement programs. The caseload forecasts help project what the state will need to budget for programs ranging from K-12 enrollment to Medicaid to prisons. Together with the revenue forecast, this data will inform the Governor’s budget that will be released in mid-December.

Early Learning Caseload Information

 

The forecasts are accompanied by narratives that provide greater context and risks to the forecast. Some items of note:

  • Transition to Kindergarten (TTK). The narrative notes that initially TTK was most likely to be offered in smaller and more rural school districts, but that is changing as some larger districts (including some in King and Pierce counties) are beginning to offer TTK. The forecast assumes that each year an additional 135 TTK classrooms will open. There is risk to this forecast because it is an emerging program, and some districts could opt in or out.
  • ECEAP. The forecast notes that while the number of children enrolled in ECEAP is growing, the percentage of occupied slots is still below pre-pandemic levels and most of the enrollment growth since the 2020-21 school year was driven by non-entitlement growth (meaning enrolled students did not meet the enrollment criteria). This forecast reflects current law which provides ECEAP will become an entitlement in the 2026-27 school year.
  • Working Connections Child Care (WCCC). WCCC growth has increased since the last caseload forecast in June. Reasons for this growth include changes to eligibility for WCCC and reductions in family co-payments. As these eligibility changes are absorbed, the rate of growth should slow.

Launch of New Legislative Website

On Nov. 20, the Washington state Legislature debuted a revamped website (also found at leg.wa.gov). The updated website contains much of the same information as the previous version but is packaged in a more navigable manner for the public. It will be populated with the new legislative members and the 2025 committee structure and schedules as that information becomes available. I am personally hoping this latest version will be easy to navigate – we are facing enough change as it is!

Perhaps we will include an upcoming trivia about the evolution of the legislative website…

Start Early Washington Has Resources For You!

Start Early Washington is busy preparing the resources needed to understand how the current political and fiscal climates may impact early learning. Want more information on the Fair Start Act – where we started, where we are, and what’s next? Interested in how early learning facilities expand access to child care? This information and more are available on our Washington Policy Resources page. Added resources, including a weekly bill tracker, will be available during session.

Trivia Answers

Back in 1976, current State Senator Mike Padden of the Spokane Valley served as the elector representing the 5th Congressional District. In 1976, Senator Padden was a recent graduate of Gonzaga Law School and a staunch supporter of Ronald Reagan. Once it was clear Jimmy Carter had enough electoral votes to serve as the 39th President of the United States, Senator Padden cast his electoral vote for Reagan, rather than for Gerald Ford who had bested Carter by 60,000 votes in Washington state.

According to a 2014 Spokesman Review article, Ronald Reagan’s press secretary issued a statement the following day that read “Ronald Reagan thanks Mike Padden for his vote.”

In addition to being the first member of the Electoral College to cast a ballot for Ronald Reagan, the story below explains why Senator Padden will also be remembered as being “the last troglodyte at the Legislature.”

During former Governor John Spellman’s tenure from 1981-1985, the state was experiencing a severe recession and sales tax revenues were tanking. There was no way around the fact that the budget was at a deficit and Governor Spellman was looking for solutions.

At the time, Padden was a member of the State House of Representatives, and he and several of his Republican colleagues had run (and been elected) on a no-new tax platform. This conservative group of Representatives supported an all-cuts tax plan during that year’s short session with 24 Republican House members jointly signing a letter urging an all-cuts proposal. In response, Republican Governor Spellman said at a press conference, “I think a group of troglodytes would have gotten together and drafted that kind of [budget] proposal.”

If you’re wondering “what is a troglodyte?” A very good question! A troglodyte would not be considered a compliment. It is meant to describe someone who is being deliberately ignorant or old-fashioned. It can also be used to describe a hermit or someone who lives in a cave.

The budget deficit was ultimately addressed by reinstating a food tax to increase revenue. While the tax on food products eventually ended, the “troglodyte” name lives on in perpetuity. It became a badge of honor (literally) for some of the then-House representatives. They even made lapel buttons that said, “Join the Troglodytes,” and had membership certificates (with a simple membership agreement: to vote no on tax increases).

We found this button for sale on eBay for $38.88 if anyone is interested…

 

After over 20 years of work in the Legislature (he took a break from legislative service to serve as a Judge in Spokane County), Senator Padden announced his retirement from the Senate earlier this year. Come January, there will be no remaining troglodytes in the Legislature.

Headshot of WA Sen Mike Padden

Senator Mike Padden, 4th Legislative District

(Image Courtesy of the Senate Republican Caucus)

Resources

Sen. Padden tells the story of his Electoral College vote [Senate Republican Caucus]

Electoral College Wasn’t Done Deal in 1976. Will it be in 2016? [The Spokesman-Review]

State GOP’s 1982 intraparty clash spawned badge of honor: troglodyte [The Spokesman-Review]

About the Author

Erica Hallock

Erica Hallock

Director, Policy & Advocacy, Start Early Washington

Erica Hallock serves as the Director of Policy and Advocacy for Start Early Washington. She has worked in early childhood, health and human services policy in both California and Washington state.

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