HOUSE BILL REPORT

ESHB 1106

As Reported by House Committee On:

Appropriations

Title: An act relating to fiscal matters.

Brief Description: Making 2015 fiscal year and 2015-2017 fiscal biennium operating appropriations.

Sponsors: House Committee on Appropriations (originally sponsored by Representatives Hunter, Ormsby, Sullivan, Gregerson and Reykdal; by request of Governor Inslee).

Brief History:

Committee Activity:

Appropriations: 6/2/15, 6/22/15, 6/23/15 [DP2S].

Majority Report: The second substitute bill be substituted therefor and the second substitute bill do pass. Signed by 19 members: Representatives Hunter, Chair; Ormsby, Vice Chair; Chandler, Ranking Minority Member; Carlyle, Cody, Dunshee, Hansen, Hudgins, S. Hunt, Jinkins, Kagi, Lytton, Pettigrew, Sawyer, Senn, Springer, Sullivan, Tharinger and Walkinshaw.

Minority Report: Do not pass. Signed by 12 members: Representatives Buys, Condotta, Dent, Haler, Harris, G. Hunt, MacEwen, Magendanz, Schmick, Stokesbary, Taylor and Van Werven.

Minority Report: Without recommendation. Signed by 2 members: Representatives Parker, Assistant Ranking Minority Member; Wilcox, Assistant Ranking Minority Member.

Staff: Kristen Fraser (786-7148).

Background:

The state government operates on a fiscal biennium that begins on July 1 of each odd-numbered year. A two-year biennial operating budget is adopted every odd-numbered year. Supplemental budgets frequently are enacted in each of the following two years after adoption of the biennial budget. Appropriations are made in the biennial and supplemental budgets for the operation of state government and its various agencies and institutions, including higher education, as well as allocations for the funding of K-12 public schools.

After the 2014 Supplemental Operating Budget, State Near General Fund plus Opportunity Pathways appropriations for the 2013-15 biennium were $33.8 billion and total budgeted funds were $67.6 billion.

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Summary of Second Substitute Bill:

State Near General Fund (State General Fund and Education Legacy Trust Account) plus Opportunity Pathways Account appropriations for the 2015-17 biennium are $37.8 billion. Total budgeted funds are $78.4 billion (includes state, federal, and other funds). Fund transfers and other provisions are made.

Some of the larger State Near General Fund plus Opportunities Pathways Account appropriations for the biennium include:

• $18.0 billion for K-12 public schools, including approximately $1.3 billion for implementation of Substitute House Bill 2776 (2010);

• $6.3 billion for the Department of Social and Health Services, including $656 million for children and family services programs, $1.0 billion for mental health programs, $1.2 billion for programs for developmentally disabled persons, $1.9 billion for long-term care programs, $871 million for economic services programs, $178 million for juvenile rehabilitation programs, and $129 million for substance abuse programs;

• $5.9 billion for other human services programs, including $3.9 billion for low-income health and other services in the Health Care Authority and $1.8 billion for the Department of Corrections; and

• $3.3 billion for higher education institutions and financial aid.

Funding is provided for state employee and non-state employee collective bargaining agreements, arbitration awards, non-represented state employee compensation increases, and Initiative 732 cost-of-living adjustments (COLA).

Supplemental changes are made to the 2013-15 Operating Budget. State Near General Fund plus Opportunity Pathways appropriations are reduced by $66 million; total budgeted funds are increased by $899 million. Supplemental changes to the 2013-15 Operating Budget made in 2015 by this act and the earlier supplemental budget, Chapter 3, Laws of 2015 (Substitute House Bill 1105), increase State Near General Fund appropriations by $225 thousand and increases total budgeted funds by $1.1 billion.

Second Substitute Bill Compared to Engrossed Substitute Bill:

The second substitute bill makes numerous funding and other changes to the Governor's budget proposal. Supplemental changes to the 2013-15 Operating Budget are also made.

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Appropriation: The bill contains multiple appropriations. Please refer to the bill and supporting documents.

Fiscal Note: Not requested.

Effective Date of Second Substitute Bill: The bill contains an emergency clause and takes effect immediately, except for section 965, relating to payments in lieu of taxes for game lands, which takes effect July 1, 2015.

Staff Summary of Public Testimony:

Please refer to the January 12, 2015, and January 14, 2015, recordings of the public hearings on the original bill.

Please refer to the March 30, 2015, recording of the public hearing on the proposed substitute bill.

Please refer to the June 2, 2015, recording of the public hearing on a proposed second substitute bill (H-2827.2).

Please refer to the June 22, 2015, recording of the public hearing on a proposed second substitute bill (H-2884.1).

Persons Testifying: Hearing Date January 12, 2015

(In support of original bill) Lani Todd, Service Employees International Union 925; Melissa Johnson, Headstart and Early Childhood Education and Assistance Programs; Jill Sells, Reach out and Read and Washington American Academy of Pediatrics; Alex Hur, Equity in Education Coalition of Washington and State Nurses Association; Emily Murphy, Children's Alliance; Laura Wells, Fight Crime: Invest in Kids; and Madeleine Thompson, Washington Student Achievement Council.

(With concerns on original bill) Randy Dorn, Superintendent of Public Instruction; Ramona Hattendorf, Washington State Family and Community Engagement Trust; Dan Steele, Washington Association of School Administrators; Ryan Pricco, Child Care Aware of Washington; Nick Lutes, State Board for Community and Technical Schools; Julie Garver, The Evergreen State College; Chris Mulick, Washington State University; Mitch Denning, Alliance of Education Associations; Ben Rarick, State Board of Education; Doug Nelson, Public School Employees Service Employees International Union 1948; Genesee Adkins, University of Washington; David Buri, Eastern Washington University; and Becca Kenna-Schenk, Western Washington University.

(Opposed to original bill) Mary Howes and Desi Saylors, Class Size Counts; Shawn Lewis, Washington Education Association; Paul Bell, Bellevue College; Anne Belson, The Evergreen State College; and Amber Carter, Association of Washington Business.

(Other testimony on original bill) Steve Dupont, Central Washington University; and Jerry Bender, Association of Washington School Principals.

Hearing Date January 14, 2015

(In support of original bill) Sharon Kitchel and June Conklin, Service Employees International Union 775; Kate White-Tudor, Washington Association of Community and Migrant Health Centers; Laura Simonds, National Alliance on Mental Illness of Washington; Scott Livengood, Community Residential Services Association; Melissa Johnson, Association of Alcohol and Addition Programs and Washington State Nurses Association; Dennis Mahar, Area Agencies on Aging; Elizabeth Trautman, Youth Care; Alia Griffing, Washington Federation of State Employees; Steven Aldrich, Friends Committee on Washington Public Policy; Lynn Palmer, Virginia Twedt, and Helen Hepp, Friends of Schafer and Lake Sylvia; Darcy Nonemacher, Washington Environmental Council; John Ehrenreich, Washington Forest Protection Association; Ted Jackson, Sky Valley Recreation; and Susan Gemmel, Washington Information Network 2-1-1.

(In support with concerns on original bill) Paul Benz, Faith Action Network and Hunger Nutrition Program; Victoria Lincoln, Association of Washington Cities; Alicia Luna, Community Café Collaborative; Allison Mondi, Lifelong; Joseph Jackson, Thurston County Prosecutors Office and Monarch Children's Advocacy Center; Susie Tracy, Washington State Medical Association and Public Health Roundtable; John Ficker, Washington State Residential Care Council; Hillary Madsen, Columbia Legal Services; John Brumbach and Lee Grogg, Ryther; and Kelsey Hulse, Thurston County Food Bank.

(With concerns on original bill) Bob Cooper, Washington State Association of Drug Court Professionals; Ryan Hall, Parent Trust Families in Recovery Network Program; Jonathan Seib, Washington Academy of Family Physicians; and Marsha Fromhold, Seattle Cancer Care Alliance.

(Opposed to original bill) Derek Franklin, Washington Association for Substance Abuse and Violence Prevention; Nikki Wegner, Community Employment Alliance; Eric Mathes, The Arc of King County; Margaret Lee Thompson, The Arc of the United States; Donna Patrick, Developmental Disabilities Council; Seth Dawson, Washington Association for Children and Families; Keith Flewelling, Washington State Chapter of APCO-NENA; David Lord, Disability Rights Washington; Lisa Thatcher, Washington Society of Certified Public Accountants; and Christie Hedman, Washington Defender Association.

(Other testimony on original bill) Robin Zukowski, Columbia Legal Services; Len McComb, Washington State Hospital Association; Laurie Lippold, Partners for Our Children; and Jim Theofelis, Mockingbird Society.

Hearing date March 30, 2015

(In support of proposed substitute bill) Kim Wyman, Secretary of State; Fred Jarrett, King County; Paul Roberts, City of Everett and Association of Washington Cities; Paul Benz, Faith Action Network; Claire Lane, Anti Hunger and Nutrition Coalition; Christina Wong, Northwest Harvest; Nadia Bucio; Claudia Flores; Becca Kenna-Schenk, Western Washington University; Alex Hur, Statewide Poverty Action Network; Lani Todd, Service Employees International Union 925; David Buri, Eastern Washington University; Jon Brumbach, Ryther; Melissa Gombosky, Education Service District 105; Melissa Johnson, Washington State Nurses Association and Community Residential Services Association; Karen Strickland, American Federation of Teachers-Washington; Steve DuPont, Central Washington University; Gary Sandwick, Catholic Community Services; Robin Koskey, Building Changes; Cherie Tessier, Passport for Changes; Amy Hirotaka, Code.org; Genesee Adkins and Ian Goodhew, University of Washington; Kelly Church, The Arc of Snohomish County; Jim Theofelis, Mockingbird Society; Christina Xiao, Associated Students University of Washington; Chris Mulick, Washington State University; Joe Cunningham, King County Parent Coalition and the Arc of King County; Janis Avery, Treehouse; Robert Sweeney, National Guard Association of Washington; Katy Warren, Washington State Association of Headstart and Early Childhood Education and Assistance Programs; Jessica Goodman; Jim Huckabay, Council of Faculty Representatives; Gregory Robinson, Washington Community Mental Health Centers; Michael Boe, Nicholas Cannady, and Michelle Woodrow, Teamsters 117; Mary Curry, Pathways Enrichment Academy; Marty Brown, State Board for Community and Technical Colleges; Michelle Johnson, Pierce College; Derek Harris, Community Youth Services; Phyllis Gutierrez Kenney, Sea Mar; Ray Corona, Latino Community Fund; Liz Tidyman; Garrett Havens, Washington Student Association; Donna Patrick, Developmental Disabilities Council; Emily Murphy, Children's Alliance; Merritt Mount, Washington State Community Action Partnership; Hayley Hohman, Associated Students of Washington State University; Diana Stadden, The Arc of Washington State; Brittany Stadden and Noah Seidel, Self Advocates in Motion; Tom Fitzsimmons, Independent Colleges of Washington; Cathy Knight, Area Agencies on Aging; Peggy Quan, AARP; Darla Helt, Clark County Parent Coalition; Alia Griffing, Washington Federation of State Employees; Laurie Meeker, United Faculty of Washington State; Len McComb, Washington State Hospital Association; and Richard Harrison, Northwest Justice Project.

(In support with amendment(s) to the proposed substitute bill) Tim Knue, Washington Association for Career and Technical Education; Jill Sells, Reach Out and Read; Joe Kendo, Washington State Labor Council; Nick Federici, Sharon Kitchel, and Mesfin Tessema, Service Employees International Union 775; Ellicott Dandy, One America; and Jim Bamberger, Office of Civil Legal Aid.

(In support with concerns on the proposed substitute bill) Joanne Moore, Washington State Office of Public Defense; Julie Garver, The Evergreen State College; Laurie Lippold, Partners for Our Children; Robin Zukoski, Columbia Legal Services; Bob Cooper and Mary Taylor, Washington State Association of Drug Court Professionals; Ben Rarick, State Board of Education; Mary Fischer, Institute for Family Development; Jennifer Allen, Planned Parenthood Votes Northwest; John Ficker, Washington State Residential Care Council; Lindsay Grad, Service Employees International Union 1199 NW; Dan Steele, Washington Association of School Administrators; Mitch Denning, Alliance of Educational Associations; Deb Merle, Washington State School Directors Association; Matt Zuvich, Washington Federation of State Employees; Seamus Petrie, Washington Public Employee Association; and Steven Aldrich, Friends Committee on Washington Public Policy.

(Neutral on proposed substitute bill) Hillary Madsen, Columbia Legal Services.

(With concerns on the proposed substitute bill) William and Joyce Ostling; Marcie Taylor, Community Employment Alliance; Madelyn Carlson, Washington Information Network 2-1-1; Eden Mack, Seattle PTSA; Kelly Powers, Bagley PTA; Steve Nesich and Sherry Kranick, Washington PTA; Kate White-Tudor, Washington Association of Community and Migrant Health Centers; Janis Traven, Washington Coalition for Gifted Education; Kim Mead, Washington Education Association; Don Hansen, Cascade Park; Holly Shepherd, Cynthia Taylor, Helen Stoll, and Chad Solvie, Martha and Mary Nursing Home; Doug Nelson, Public School Employees Service Employees International Union 1948; M. Scott MacMurray; and Ken Kanikeberg, Office of Superintendent of Public Instruction.

(Opposed to the proposed substitute bill) Tim Eyman, Voters Want More Choices; Tisha McMeekin; Glen Morgen; Ted Trask; James Lydigsen; Jill Steinberg, Maritza Rivera, and Mary Howes, Class Size Counts; Sandy Belzer; Steve Edwards; Doug Wisdom; David Spring; Katie Kolan, Washington State Medical Association; Susie Tracy, Family Medicine Residency Network; Pat Tarzwell; Randy Churchill; Keith Flewelling, Thurston County 911 and APCO-NENA Washington; Peggy Fouts, Grays Harbor 911 and Advisory Committee E911; Jeff Cohen, Kline Galland; Jeffery Hattori, Jennifer Hamasaki, Gigi Ridings, and Carmen Tsuboi, Seattle Keiro Rehabilitation and Care Center; Nikole Jay, Judson Park; Patrick O' Neill, Wesley Homes; Patricia Benavidez; Eddie Hamilton; Amber Carter, Association of Washington Business; Scott Sigmon, Leading Edge Washington; Ken Morse; and Jonathan Seib, Washington Academy of Family Physicians.

(Other testimony on the proposed substitute bill) Peter Goldmark, Commissioner of Public Lands; Tracy Oster, Communities in Schools-Federal Way; David de la Fuente, Communities in Schools-Kent; Jim Ventris, Communities in Schools-Renton; Charles Shelan, Washington Association for Children and Families; Courtney Ellwell and Vicki Wagner, Youth Suicide Prevention; Jim Cooper, United Ways of Washington; Kathleen Southwick, Washington Information Network 2-1-1; John Page, Tacoma Public Schools; Martin LeBlanc, Islandwood; Nina Auerbach, Washington Association for Infant Mental Health; Connie Brown, Pierce County Human Services Coalition; Debbie Graham and Courtney Shiel, Safe Babies-Safe Moms; Melanie Smith, Wellspring Family Services; Kate Baber and Michelle Thomas, Washington Low Income Housing Alliance; Mark Putnam, Committee to End Homelessness-King County; Daniel Malone, Downtown Emergency Services Center; and Josh Weiss, Washington State Association of Counties.

Hearing date June 2, 2015

(In support of proposed second substitute H-2827.2) Paul Roberts, Association of Washington Cities and City of Everett; Helen Myrick, United Way of Pierce County and 211; Sharon Kitchel and Linda Lee, Service Employees International Union 775; Mike Groesch, Washington Trust for Historic Preservation; Dawn Vyvyan, Yakima Nation and Sauk-Suiattle Tribe; Vida Zvirzdys-Farler, Olympia Downtown Association; Marcie Taylor, Community Employment Alliance; Kate Baber, Washington Association of Low Income Housing Alliance; Christie Hedman, Washington Defender Association; Jon Brumbach, Ryther; Len McComb, Washington State Hospital Association; Garrett Havens and Elissa Goss, Washington Student Association; Erin Gilbert and John Avery, American Federation of Teachers Washington; Joe Kendo, Washington State Labor Council, AFL-CIO; Adrienne Thompson, Professional and Technical Employees Local 17; Alex Hur, Service Employees International Union 925; Matt Zuvich, Washington Federation of State Employees; Christina Wong, Northwest Harvest; Kevin Glackin-Colby, St. Leo's Food Connection; Liz Tidyman; Nick Lutes, State Board for Community and Technical Colleges; Brenda Wiest, Teamsters Local 117; Paul Francis, Council of Presidents; Nancy Amidel, University District Conversation on Homelessness; Doug Nelson, Public School Employees SEIU Local 1048; Dennis Mahar, Washington Association of Area Agency on Aging; Alan Preston, Real Change; Cathy MacCaul, AARP; Seamus Petrie, Washington Public Employees Association; Jerry Bender, Association of Washington School Principals; Lori Pfingst, Washington State Budget and Policy Center; Steven Rubenstein, 49 for Fairness; Jennifer Jennings Shaffer, Early Learning Action Alliance; Frank Ordway, League of Education Voters; Laura Wells, Fight Crime: Invest in Kids; Emily Murphy, Children's Alliance; Heather Weiner, Washington United for Fair Revenue; Heather Moore; Steven Aldrich, Friends Committee on Washington State Policy; Noah Seidel, Self Advocates in Leadership; Diana Stadden, The Arc of Washington State; Mike Webb, Office of the Attorney General; Tom Fitzsimmons, Independent Colleges of Washington; Melanie Smith, Committee for Children; and Eric Gonzalez, One America.

(In support with concerns on the proposed second substitute H-2827.2) Bob Cooper, Washington Association of Drug Court Professionals; Jim Theofelis, Mockingbird Society; Laurie Lippold, Partners for Our Children; David Westberg, International Union of Operating Engineers Local 609; Robin Zukowski, Columbia Legal Services; Jolinda Stephens, Unitarian Universalist Voices for Justice; Mitch Denning, Alliance of Education Associations; Corine Pennington, Washington Association of School Business Officials and Puyallup School District; and Jerry Reilly, Elder Care Alliance.

(With concerns on the proposed second substitute H-2827.2) Shawn Lewis, Washington Education Association; Katie Kolan, Washington State Medical Association; Susie Tracy, Washington Family Medicine Residency Network; Tim Farrell, Washington State PTA; and Chester Baldwin, Sunrise Services.

(Opposed to the proposed second substitute H-2827.2) Tim Knue, Washington Association for Career and Technical Education; Mary Howes, Class Size Counts; Mary Jean Hrbacek; Terry Kohl, Backcountry Horsemen of Washington; Amber Carter, Association of Washington Business; Pete Ansara, Korean Women's Association; Peter Nazzal, Catholic Community Services; and Joanie Deutsch, Washington Retail Association.

(Other testimony on the proposed second substitute H-2827.2) Doug Levy, Recreational Boating Association of Washington and Washington Recreation and Park Association; Craig Engleking, REI and Islandwood; Martin LeBlanc, No Child Left Inside Alliance; Melissa Johnson, Community Residential Services Association and Addus Health Care; Mary Verner, Washington Department of Natural Resources; Ben Rarick, State Board of Education; and Kathryn Hedrick, Washington Tourism Alliance.

Hearing date June 22, 2015

(In support of proposed second substitute H-2884.1) Len McComb, Washington State Hospital Association; Bob Cooper, Washington Defender Association and Washington Association of Criminal Defense Lawyers; Joe Kendo, Washington State Labor Council; Steven Aldrich, Friends Committee on Washington Public Policy; Dave Williams, Association of Washington Cities; Liz Tidyman; and Leslie Emerick, Association of Advance Practice Psychiatric Nurses.

(In support with concerns on proposed second substitute H-2884.1) Mitch Denning, Alliance of Educational Associations; June Conklin, Service Employees International Union Local 775; Priscilla Lisicich, Washington Association of Substance Abuse and Violence Prevention; Jerry Reilly, Eldercare Alliance; and John Ficker, Washington State Residential Care Council.

(With concerns on proposed second substitute H-2884.1) Terry Kohn, Back Country Horsemen of Washington; Mel Sorensen, America's Health Insurance Plans; Carrie Tellefson, Regence Blue Shield; Chester Baldwin, International Council of Shopping Centers, Northwest Yacht Brokers Association and Sunrise Services; Genesee Adkins, University of Washington; Dennis Eagle, Washington Federation of State Employees; and Sara Stewart and Margaret Tudor, Pacific Education Institute.

(Opposed to proposed second substitute H-2884.1) Tim Knue, Washington Association for Career and Technical Education; Melissa Johnson, Washington State Association Headstart and ECEAP; Mark Johnson, Washington Retail Association; Carolyn Logue, Washington Food Industry Association; Ken Kanikeburg, Office of the Superintendent of Public Instruction; and Jim Hedrick, Greater Spokane, Incorporated.

(Other testimony on proposed second substitute H-2884.1) Emily Murphy, Children's Alliance; Ryan Pricco, Child Care Aware; Robin Zukoski, Columbia Legal Service; Laurie Lippold, Partners for Our Children; Alex Hur, Statewide Poverty Action Network and Service Employees International Union Local 925; Jim Theofelis, Mockingbird Society; Toni McKinley-Camp, Office of the Secretary of State; Bob Johnson and Mary Verner, Washington Department of Natural Resources; Jim Bamberger, Office of Civil and Legal Aid; Eric Gonzalez, One America; Sean Graham, Washington State Medical Association; Susie Tracy, Family Medicine Residency Network; Chris Mulick, Washington State University; Nick Federici, Washington Low Income Housing Alliance and Pioneer Human Services; and Doug Nelson, Public School Employees Service Employees International Union Local 1948.

Persons Signed In To Testify But Not Testifying: None.