Overview
This legislation establishes and reinforces comprehensive budget and financial management policies for Washington State, governing how the Governor prepares and submits budget documents to the legislature. The bill's central purpose is to impose fiscal discipline on state budgeting by requiring that proposed expenditures remain within available fiscal resources and that the general fund maintain a positive ending fund balance. Beyond fiscal constraint, the bill advances transparency and accountability by mandating that budget documents reflect statewide priorities, identify activities that fail to address those priorities, and include performance indicators demonstrating measurable progress toward priority results. The scope of the legislation covers both operating and capital budgets, establishing distinct requirements for each and creating a framework that links appropriations decisions to long-range planning and strategic facility management.
Key Points
- Imposes a positive ending fund balance requirement on the Governor's operating budget submissions beginning in the 2021-2023 biennium
- Requires projected maintenance levels of omnibus appropriations bills to not exceed available fiscal resources beginning in the 2013-2015 biennium
- Mandates alignment of budget documents with statewide priorities and identification of non-conforming activities
- Establishes separate capital budget requirements including long-range facility planning and maintenance backlog reduction strategies
- Defines key fiscal terms including 'available fiscal resources' and 'projected maintenance level' to standardize budget analysis
Core Provisions
The legislation amends RCW 43.88.030 to impose substantive requirements on the content and fiscal posture of the Governor's budget submissions. The Governor's budget message must explain proposed financial policies and include performance indicators tied to measurable progress on priority results, directly linking budget proposals to outcome-based governance. The budget document itself must present estimated revenues and expenditures, beginning undesignated fund balances, expenditures classified by fund, function, and agency, common school expenditures on a fiscal-year basis, and amounts required to amortize unfunded actuarial accrued liabilities of the state retirement system. The operating budget must reflect statewide priorities as required by RCW 43.88.090 and must explicitly identify activities not addressing those priorities, creating a transparency mechanism for legislative scrutiny. Beginning with the 2013-2015 fiscal biennium, the projected maintenance level of the omnibus appropriations bill enacted by the legislature must not exceed available fiscal resources for the next ensuing biennium, establishing a forward-looking fiscal constraint. Beginning with the 2021-2023 fiscal biennium, the Governor's operating budget submissions must leave a positive ending fund balance in the general fund and related funds in total, codifying a structural balance requirement. The capital budget provisions require a separate document or schedule containing a long-range facilities plan, a prioritized capital program, a strategic plan for reducing maintenance and repair backlogs, and a prioritized list of specific facility deficiencies with corresponding capital projects. The Governor retains authority to submit proposals for expenditures funded from revenue sources derived from proposed changes in existing statutes, preserving executive flexibility to propose new revenue measures alongside spending plans.
Legal References
- RCW 43.88.030
- RCW 43.88.055
- RCW 43.88.090
- RCW 43.88.160
Implementation
The Office of Financial Management (OFM) and its Director bear primary responsibility for implementing this legislation. The Director must provide state agencies with instructions for submitting biennial budget requests at least three months before agency budget documents are due, ensuring agencies have adequate time to prepare compliant submissions. The OFM coordinates the consolidation of agency requests into the Governor's unified budget document and is responsible for ensuring that the submitted budget satisfies the positive ending fund balance requirement and the available fiscal resources constraint. The Legislative Evaluation and Accountability Program Committee, the House Capital Appropriations Committee, and the Senate Ways and Means Committee serve as the primary legislative recipients and reviewers of the submitted budget documents, providing institutional oversight of compliance with the statutory requirements. Budget documents must be submitted to the legislature by February 15th, establishing a firm deadline for executive budget transmission. The July 1st date marks the beginning of the fiscal year and serves as the reference point for biennium calculations. Compliance is enforced through the legislative appropriations process itself — a budget submission that fails to meet the positive fund balance or available fiscal resources requirements is facially non-compliant with the statute, providing grounds for legislative rejection or amendment.
Legal References
- RCW 43.88.030
- RCW 43.88.090
- RCW 43.88.160
Impact
The primary beneficiaries of this legislation are Washington State taxpayers and future generations, who gain structural protection against deficit spending and the accumulation of unfunded obligations through the positive ending fund balance and available fiscal resources requirements. State agencies bear increased administrative burden, as they must align budget requests with statewide priorities and provide documentation sufficient to demonstrate that alignment. The legislature benefits from enhanced transparency, receiving budget documents that explicitly flag activities not tied to statewide priorities and that include performance indicators enabling outcome-based appropriations decisions. The retirement system beneficiaries gain visibility into the amortization of unfunded actuarial accrued liabilities, as the budget must explicitly account for these obligations. The capital budget requirements benefit state facility users and the public by mandating strategic planning for maintenance backlogs, which historically have grown when deferred, ultimately costing more to address. The fiscal constraints imposed — particularly the positive ending fund balance requirement effective for the 2021-2023 biennium and beyond, including the 2027-2029 and 2029-2031 biennia — limit executive and legislative flexibility during economic downturns, potentially requiring spending reductions or revenue increases to maintain compliance. There are no explicit sunset provisions, making these requirements permanent features of Washington's budget law.
Legal References
- RCW 43.88.030
Legal Framework
The legislation operates within the framework established by Article VII, Section 12 of the Washington State Constitution, which governs state financial matters and provides the constitutional foundation for legislative control over appropriations and fiscal policy. The bill amends RCW 43.88.030, which is the central statute governing the Governor's budget submission obligations within Washington's Budget and Accounting Act (Chapter 43.88 RCW). The cross-references to RCW 43.88.055, RCW 43.88.090, and RCW 43.88.160 integrate this section into a broader statutory scheme governing financial management, statewide priorities, and budget document formatting. The definitions of 'available fiscal resources' and 'projected maintenance level' embedded in the statute carry legal significance because they establish the precise metrics against which compliance is measured, reducing interpretive ambiguity in enforcement. The legislation does not preempt local government financial management law, as it operates exclusively within the state executive and legislative budget process. There are no explicit judicial review provisions, meaning that disputes over compliance would be resolved through the ordinary legislative process or, in extreme cases, through declaratory judgment actions in state court under Washington's Administrative Procedure Act or general equity jurisdiction.
Legal References
- Washington State Constitution, Article VII, Section 12
- RCW 43.88.030
- RCW 43.88.055
- RCW 43.88.090
- RCW 43.88.160
- Chapter 43.88 RCW (Budget and Accounting Act)
Critical Issues
The most significant implementation challenge is the accuracy of revenue and expenditure forecasting required to demonstrate compliance with the positive ending fund balance and available fiscal resources requirements. Washington's revenue forecasts are subject to substantial uncertainty, particularly during economic contractions, and a budget that appears compliant at submission may become non-compliant as economic conditions change. The definitions of 'available fiscal resources' and 'projected maintenance level' are likely to generate interpretive disputes, particularly regarding which funds qualify as 'related funds' to the general fund and how to calculate the projected maintenance level of a complex omnibus appropriations bill. The requirement that the Governor's budget leave a positive ending fund balance in total across the general fund and related funds creates a structural constraint that may force difficult tradeoffs between program maintenance and fiscal compliance, particularly in years following economic downturns when revenues are depressed and social service demands are elevated. Critics may argue that the positive fund balance requirement inappropriately constrains the executive's ability to propose counter-cyclical spending during recessions, potentially exacerbating economic downturns. The requirement to identify activities not addressing statewide priorities, while transparency-enhancing, may create political pressure to defund programs that serve important but narrowly defined constituencies, even when those programs represent sound policy. The capital budget requirements, while valuable for long-range planning, impose significant analytical burdens on agencies that may lack the capacity to produce rigorous facility condition assessments and prioritized deficiency lists within the statutory timeframes.
Legal References
- RCW 43.88.030
- RCW 43.88.090
- Washington State Constitution, Article VII, Section 12