Last week, the Governor released his recommendations for the next two-year state budget. It included proposals for operating, capital, and transportation expenditures. In short, the Governor’s proposed State Operating Budget spends roughly $70 billion over the next biennium, beginning July 1, 2023. That’s a 12% increase over the current $63 billion. Based on the latest revenue forecast, which projects continued growth that is likely to slow compared to recent years and facing the impacts of high inflation driving current and future costs, the budget seeks to address what Governor Inslee considers the state’s most pressing needs.

The Governor’s proposed Operating and Capital Budgets place significant emphasis on housing. He suggests maintaining current service levels for housing and homelessness while making significant new investments. The new investments include $698 million in affordable housing projects like multifamily, homeownership opportunities, permanent supportive housing, and others, $270 million to accelerate the creation of affordable housing with strategies like rapid acquisition of housing for unsheltered people, workforce housing investments, and land acquisition for affordable housing projects, and $58 million to expedite permitting and planning processes.

A primary emphasis in the Governor’s budgets is access to behavioral health care.

There is $28 million for child and youth services, $895 million for a new forensic hospital on the Western State Hospital campus, $290 million in increased bed capacity in facilities across the state, increased investments in the workforce and provider rates, and an additional $213 million to expand community services like the 988 Crisis Hotline, opioid prevention and treatment, and continued efforts to implement the Trueblood settlement.

It is important to note that most of the Governor’s proposed investments in affordable housing, homelessness services, and behavioral health are funded through the issuance of $4 billion in new state bonds outside the state’s debt limit. An exceedance of the state debt limit will require approval by the voters. The Governor is not requesting new funding to pay the debt, nor does he offer a solution for repayment in his proposal.

In addition to emphasizing housing and behavioral health, the Governor also proposes new investments to address the impacts of climate change, and to continue reducing statewide greenhouse gas emissions. Strategies include $221 million in funding for flood reduction and water supply and $872 million in salmon protection and restoration, including clean water supply, fish passage barrier removal, hatchery investments, harvest management, predation and food web issues, and increased investment in voluntary protection and restoration activities.

Governor Inslee’s proposal to address climate includes investing revenue from the Climate Commitment Act. Major investment strategies aim to reduce impacts on overburdened communities by funding projects that reduce health burdens, support community participation in decision-making, improve air quality, address workplace health and safety, and help tribes mitigate and adapt to the effects of climate change.

There are also significant new investments in improving the process for the siting and permitting of clean energy projects. These investments include funding strategies to create more efficient and effective permitting and review processes, state investment in clean energy production projects, investments in energy transmission, and investments in clean transportation.

Finally, the Capital Budget proposal makes a significant investment in local public infrastructure by honoring the 2023 sunset of some current Public Works Assistance Account revenue diversions and allocating $400 million from the account to the Public Works Board for project funding cycles.

Highlights of the Transportation Budget proposal include $30 million in traffic safety improvements and $345 million in maintaining and updating the state’s ferry system.

Click here for a spreadsheet of the Governor’s budget proposals prepared by WSAC’s policy team highlighting areas of interest to counties.

Click here to see all the Governor’s budget and related policy proposals.

Policy Contact:
Paul Jewell
WSAC, Policy Director