Leaders in the state Senate are just now kicking off their press conference to announce their budget proposal. For those of you who aren't here, we've got the details below.

First we'll mention that the press conference is being televised live by TVW. And budget documents are available here.

In terms of big picture architecture, the proposal leaves $595 million in state reserve accounts, uses reserves, federal funds and various fund shifts to the tune of $1.1 billion, cuts services and public employee compensation by $838 million and raises $918 million in new revenue.

Of the latter $518 million comes from the closure of more than two dozen tax loopholes. Another $309 million comes from a three year increase to the state sales tax by three-tenths of a penny. Another $86 million would be generated by a $1 per pack increase to the state cigarette tax.

Those taxes are partially offset by implementation of the Working Families Tax Credit, an attempt to buffer to tax hit to low income families. The budget also assumes the creation of a tax credit for small businesses that create new jobs.

It is believed that this proposal would eliminate 4,300 public sector jobs on top of the several thousand eliminated last year. In addition, $49 million in savings is assumed for passage of temporary layoff legislation. And another $70 million is assumed in administrative reductions throughout state government.

The sales tax increase would be used to protect funding for levy equalization for rural school districts, the state need grant and all day kindergarten. The additional tobacco tax would help maintain funding for the state's Basic Health Plan for the working poor.

Senate Majority Leader Lisa Brown, D-Spokane, referred to the budget as a "moral document" that charts the Senate's vision for the future in a time of historic economic turmoil. This year, she said, "our budget is balanced to a new reality."

Brown called the proposal "balanced and responsible."

Sen. Rodney Tom, a Bellevue Democrat and vice chairman of the Senate Ways and Means Committee, says part of the balanced budget strategy centers around government reform. That is notably embodied in the proposal's plan to collapse the Department of Fish and Wildlife and Parks and Recreation Commission into the Department of Natural Resources and the closure of the state printer.

In doing so, the proposal focuses on "shrinking the size of government" without eliminating services, Tom said. Four state institutions would be closed under this proposal.

Asked about whether there are enough votes to approve the budget Brown said "This reflects a very extensive process in our caucus coming to terms with our priorities," Brown said.

"Almost every day we've spent time talking about the budget in caucus," said Sen. Ed Murray, chairman of the Senate Democratic Caucus. "I think you're seeing where the Senate Democrats generally are."

Asked about the Working Family Tax Credit, Brown said the caucus is working with the Department of Revenue to create what "would be a simple application you'd send in" that would work in tandem with the Earned Income Tax Credit.

As the discussion circled back to the tax exemptions proposed for closure, Brown held up a book of hundreds of loopholes.

"In the 567, there have to be some that aren't as important as kids health care and adult day health," Brown said. She said wants to work with the minority party to look for ways for ways "systematically discipline ourselves" as it relates to tax preferences.

The budget will be heard in the Ways and Means Committee starting today at 3:30.

Here's video of this morning's press conference.

Here are some additional details taken from the press release.

 

 

Senate solution to this year’s $2.8 billion revenue gap

· Transfers and adjustments: $498 million (includes use of Rainy Day Fund)

· Federal funds: $583 million

· Total reductions: $838 million

· New revenue: $918 million

· Ending fund balance: $595 million

Early learning highlights

· Protects Working Connections Childcare

· Protects Early Childhood Education Assistance Program

· Funds $99 million beyond Book I and $49 million greater than the Book II.

K-12 highlights

· Protects levy equalization for property-poor school districts (dedicated tax)

· Protects All-Day kindergarten (dedicated tax)

· Protects the Highly Capable program

· Funds $149.8 million beyond Book I – with all cuts outside basic education – and $26 million less than the Governor’s Book II budget.

Higher education highlights

· Protects the state financial aid Need Grant

· funds 6,000 additional worker retraining slots

· Funds $193.4 million beyond Book I and $54 million greater than Book II.

Health care highlights

· Protects 60,000 low-income individuals enrolled on the Basic Health Plan (dedicated tax)

· Preserves current Apple Health for Kids eligibility

· Protects maternity support services

· Protects Medicare Part D copays

· Funds $220 million beyond Book I and $12 million less than Book II. Significant federal relief for health care is assumed, which reduces state spending by over $582 million.

 

Human services highlights (Other Human Services + GAU)

· Reforms GA-U and ADATSA

· Protects foster home payments

· Protects alcohol and chemical dependency treatment

· Protects home care and home care training for seniors

· Funds $169 million beyond Book I and $19 million more than Book II.

 

Institution closures

· Francis Haddon Morgan autism center

· Maple Lane juvenile rehabilitation center

· McNeil Island special commitment center (reduced to 512 beds)

· Larch corrections center

· State printer

Tax equity and loophole reform

· Funds the Working Families Tax Credit, which provides up to 370,000 Washington residents a 5 percent state match of their federal Earned Income Tax Credit (EITC) ($32 million)

· Funds a B&O tax credit for small businesses that create family wage jobs ($9 million)

· Creates a process to evaluate all existing tax loopholes

 

New revenue

· Closes over a half a billion dollars worth of tax loopholes ($518 million)

· Raises the cigarette tax by $1 per pack ($86 million)

· Increases the general sales tax by three-tenths of a cent until 2013 ($313 million)