OLYMPIA, Wash. — In proposing solutions to the state’s 2013-15 budget shortfall, outgoing Gov. Chris Gregoire also outlined a plan to increase funding for education, which includes a component to fully fund the state’s new pupil transportation funding formula.

Gregoire will step down on Jan. 16 after serving eight years as governor. The state’s 2013-15 budget cycle begins July 1.

“My goal with this budget was to give our incoming governor and the Legislature a balanced and sustainable plan that addresses our fiscal problem and preserves services that are pivotal to our future prosperity,” Gregoire said. “Nothing will do more to ensure a bright future for our state than the many enhancements we are proposing throughout our education system.”

The governor’s proposal for increasing education funding addresses the McCleary decision, in which the state Supreme Court found that the state for years has failed to meet its constitutional obligation to provide adequate funding for basic education. In response, the Legislature has committed to increase state support for basic education by $3.4 billion by the 2017-19 biennium.

Gregoire is proposing a $1 billion down payment on that commitment in 2013-15 — a 12.3% increase over the current K-12 budget to accomplish the following:

• Reduce class sizes in grades K-2.
• Step up the phase-in of full-day kindergarten programs across the state.
• Improve professional development for teachers and principals.
• Increase funding for maintenance, supplies and operating costs.
• Fully fund the state’s new pupil transportation funding formula.

The governor is proposing a wholesale excise tax on gasoline and diesel fuel that would increase gradually over the next three biennia to eventually fund the entire pupil transportation budget. By using transportation taxes to fund pupil transportation, officials said state general fund dollars will be freed up to cover the other K-12 enhancements.

To pay for those enhancements for the next two biennia, the governor is proposing to extend for three and a half years two temporary taxes that the Legislature enacted in 2010 — a business and occupation surcharge on certain services, and a beer tax surcharge.

For the 2013-15 budget, the wholesale fuel tax would raise an estimated $367 million and the temporary tax extensions would raise $636 million.

“My proposed budget offers both a solution to the current budget shortfall and a solid start on meeting our obligations under McCleary,” Gregoire said. “This plan is a sensible, sustainable budget for Gov.-elect [Jay] Inslee and the Legislature to consider next month.”

As previously reported, the Joint Task Force on Education Funding was evaluating ways to boost funding for education in the state, and proposals included paying for school bus services out of the transportation budget rather than the general fund.

The Seattle Times reports that the Joint Task Force on Education Funding recently voted to include Gregoire’s fuel excise tax proposal among its recommendations.

Meantime, Inslee released a brief statement about Gregoire’s budget proposals through his spokesman, Sterling Clifford, The Bellingham Herald reports.  

“Gov. Gregoire’s budget reflects the seriousness of the challenges ahead, and Gov.-elect Inslee appreciates her thoughtful effort and determination to address Washington’s fiscal reality,” Clifford said. “In the upcoming legislative session, Gov.-elect Inslee will lay out his own budget priorities that reflect his vision for state government and his commitment to create a lasting economic recovery with secure jobs for Washington's middle class.”