- Associated Press - Wednesday, December 14, 2016

OLYMPIA, Wash. (AP) - While a bulk of Democratic Gov. Jay Inslee’s budget proposal focuses on education funding, he said Wednesday the state’s mental health system must also be on the forefront as lawmakers start work next month on passing a new two-year state budget.

On the second day of his multi-day budget rollout, Inslee called for spending an additional $300 million in the next two years to improve capacity and add staffing. The plan also seeks to move people hospitalized on civil commitments out of the state’s two psychiatric hospitals and into beds at facilities in the community. Western State Hospital - an 800-bed facility in Lakewood - has been plagued with problems, including staffing and bed shortages and is currently under scrutiny by the federal Centers for Medicare and Medicaid Services over concerns involving patient safety.

Inslee said his plan would “modernize and fundamentally transform how we provide mental health services to Washingtonians.”

“It’s not just about adding funding to the current structure of our system,” Inslee said. “It is about structural changes that will allow us to build a patient-centered system where we’re better able to provide people the right treatment in the right setting.”

The budget also moves to implement recommendations from outside consultants, including adding three mobile crisis teams and two new community crisis walk-in centers where people suffering a mental health crisis can stay for up to 23 hours.

The $47 billion budget plan assumes more than $4 billion in new revenue, with a majority of it - about $3.9 billion - dedicated to education-related costs. The budget also includes $732 million dollar for state employee raises - $500 million of which are under collective bargaining agreements, and it seeks to freeze resident undergraduate tuition at the state’s universities and community and technical colleges.

The new revenue Inslee seeks to pay for his plan includes:

-An increase in the business and occupation tax on services provided by accountants, attorneys, real estate agents and others from 1.5 percent to 2.5 percent.

-A carbon tax that would charge the state’s emitters $25 per metric ton starting in 2018.

-A 7.9 percent capital gains tax on earnings from the sale of stocks, bonds and other assets above $25,000 for individuals and $50,000 for those who file jointly.

The governor’s plan also seeks to close or modify a handful of tax exemptions. Inslee’s proposal is the first of three to be released in the coming months. After the next legislative session begins Jan. 9, the Senate and House will also release proposals in hopes of negotiating a compromise during the 105-day session.

Republican Senate Majority Leader Mark Schoesler said that the governor’s plan “threatens the stability of Washington’s economy and would undermine families.”

“The governor’s proposal ignores the constitutional requirement of a dependable funding source for public education by relying on a new and unproven tax on carbon and a highly volatile capital-gains income tax,” Schoesler said in a written statement. “It also ignores the requirement for a four-year balanced budget and adds nothing to our reserves, which we’ll need when the next recession hits.”

Inslee said that his budget was the “start of a conversation” and that he looked forwarded to seeing ideas from the House and Senate. But he said that it is “not possible to fulfill the constitutional or moral obligations of the state of Washington without new revenue.”

“That’s just a fiscal fact,” he said.

Lawmakers next session must comply with a 2012 state Supreme Court ruling requiring them to fully fund the state’s basic education system. Lawmakers have already put more than $2 billion toward the issue since the ruling, but the biggest piece remaining of the court order is figuring out how much the state must provide for teacher salaries. School districts currently pay a substantial chunk of those salaries with local property-tax levies. Under the governor’s proposal, the state pays its part of that salary obligation.

The court has said that the state has until Sept. 1, 2018 to fully fund education, but that the details of how to do that - as well as how lawmakers will pay for it - must be in place before the Legislature adjourns next year.

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