Washington State Legislature Proposes Budgets Amid $15 Billion Deficit

Washington State Legislature Proposes Budgets Amid $15 Billion Deficit

The Washington State House and Senate have released their proposed budgets as of Monday, March 24, amidst a staggering projected budget deficit of $15 billion over the next four years. The state is required to enact a balanced budget every two years, making these budgetary decisions critical.

According to WSHA, there is relief that many of the major cuts proposed by Governor Inslee and Governor Ferguson, which directly affect hospitals, were not included in either legislative budget. However, both chambers have included a bill (SB 5083) that aims to cut and cap payments for hospital services under PEBB/SEBB, raising concerns regarding the sustainability of hospitals amidst these cuts.

Despite a single-party control over the executive branch and both chambers of the Legislature, significant differences remain in the proposed budget and revenue packages. Each chamber has suggested varying combinations of cuts and taxes, highlighting the complexity of the budget negotiations.

Impending Steps in the Legislative Process

Subsequent to the release of the proposed budgets, hearings are scheduled for Tuesday, March 25, where each chamber will evaluate their budget proposals. The committees are expected to pass the proposals on Thursday, March 27, leading to a floor vote on Saturday, March 29. A conference committee will then be formed to reconcile differences between the House and Senate budgets, ultimately leading to a final budget that must be ratified before April 27, which marks the conclusion of the legislative session.

Key Highlights from the House and Senate Budgets

The House budget includes a substantial cut to hospital payments tied to the PEBB/SEBB bill, along with a proposed additional 1% business and occupation tax on revenue exceeding $250 million. In contrast, the Senate’s budget highlights a 5% payroll tax on income above the Social Security maximum, which could significantly affect hospital funding.

Concerns for Healthcare Services

With the proposed budget cuts, hospitals may experience a drastic decrease in funding. The House suggests cutting reimbursement to hospitals within public and school employee benefit plans which could escalate financial stress on healthcare providers, potentially impacting service delivery and access to care.

WSHA has emphasized that proposed cuts, including a $75 million biennial reduction in the Hospital Safety Net Assessment and cuts to professional fees, may further strain hospital operations, especially in a financially challenging environment.

Conclusion

As the budget negotiations unfold, stakeholders remain apprehensive about the implications of the proposed fiscal adjustments on the healthcare landscape. The Senate and House will need to navigate these budgetary discussions carefully to ensure that vital healthcare services can be maintained for Washington residents while also addressing the state’s budget deficit.