December 18, 2017
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Gov. Inslee releases budget with call for carbon tax and billion-dollar dip into reserves

Gov. Jay Inslee unveiled his supplemental budget proposal last Thursday, setting up the debate on how lawmakers will make mid-course adjustments to the $43.7 billion two-year state budget approved this summer.

Inslee proposed tapping the state's rainy-day reserves for nearly $1 billion to fully implement the state's salary allocation for teachers and staff, starting with the 2018 school year, something the state Supreme Court had called for in its latest McCleary ruling.

“Let’s fund the final step of McCleary this year,” Inslee said. “The Legislature has invested billions of dollars in our schools over the past five years, including in a bipartisan effort to tackle the heaviest and most complicated part of the plan this past session related to local levies and compensation for educators. Our students and their teachers are counting on us to deliver the full funding they need — and we can deliver that full funding now.”

To pay back the $950 million withdrawal from the rainy-day fund, Inslee repeated his call for a carbon tax, something even Democratic leaders in the House failed to act on the past few years. He didn't release a specific proposal, but said a bill would be introduced next month that would raise $1.5 billion by taxing carbon emissions from energy use, manufacturing and other parts of the state's economy. The Associated Press has more on the governor's budget proposal, and Inslee's office offered this interactive look at the governor's proposed budget. The Washington Research Council drills down into the details.

His budget will be one of several debated by lawmakers, who return next month for what is scheduled to be a 60-day "short" session.

Sen. John Braun, R-Centralia, the ranking Republican budget-writer in the Senate, said he appreciated that Inslee's budget adheres to the four-year balanced budget law, but said he is concerned about tapping the rainy-day fund and adding new costs for Washington citizens and employers through a carbon tax.

“It’s important that we show discipline by keeping a sizable balance in the ‘Rainy Day Fund’ and budget reserve so we can weather an unexpected economic downturn or state revenue drop. A strong ‘Rainy Day Fund’ goes hand-in-hand with a balanced budget to help ensure Washington’s economic security," Braun said.

AWB President Kris Johnson said that over the past four years, lawmakers have been moving in the right direction, adding billions in additional K-12 education funding while still respecting the four-year balanced budget requirement that brings needed discipline to the budget process. The bipartisan budget approved in July adds $7.3 billion to education funding, on top of the $4.5 billion added over the previous four years, making education spending more than half of the total state budget.

“The governor proposes to replenish the reserve fund by imposing a new tax on carbon, which would drive up the cost of electricity, natural gas and fuel for Washington families. It would also be another blow to the state’s manufacturers. These are employers that support good-paying, family wage jobs but are already facing numerous challenges, particularly in rural Washington which has not experienced the same economic growth as the urban areas," Johnson said.

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International Growth Zone

Northwest Startup Supporters Grow U.S.-Canada Economic Ties

By Benjamin Romano, editor, Xconomy Seattle

There's a new network organizing the incubators, accelerators, and investors fostering innovation in the Pacific Northwest on both sides of the U.S. - Canada border.

Business collaboration across the 49th parallel is having a moment, thanks in no small part to a dramatic divergence in immigration policies between the two countries this year that have prompted U.S. tech companies to establish or grow their presence in Canada to access talent from around the world.

The Cascadia Venture Acceleration Network (CVAN) is focused on collaboration at the grass-roots level of the innovation economy -- specifically the cleantech, life sciences, and IT industries -- in the broad area known as Cascadia, encompassing Washington, Oregon, and British Columbia, Canada.

Read the full column in Xconomy Seattle
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