Governor Inslee releases his proposed 2022 budget- what do ports need to know?

Governor Inslee released his proposed supplemental operating, capital, and transportation budgets on December 16th. Inslee announced the budget in a press conference aimed at discussing his priorities-- homelessness and poverty, salmon recovery, climate change, and the ongoing impacts of COVID.

The Governor’s budget is the first step of the supplemental budget process; Inslee outlines his priorities, and the Legislature follows with their proposals in January and February.  Barring any Special Sessions, the Legislature will send their proposals back to the Governor on or before their final day, March 10, 2022.

Looking to details in this budget, the Governor is proposing a supplemental operating budget that uses new revenue to increase spending to about $62B for the biennium (two years), up from the $59B budget adopted last spring.  Inslee proposes to further shore up the “rainy day fund” to the tune of $600M, bringing total state reserves to about $2B.

Inslee’s transportation budget spends $1B more than the previous year’s budget, a large bump fueled by passage of the federal Infrastructure Investment & Jobs Act and a one-time transfer from the state’s operating budget. Under the Governor’s plan, the ferry system receives large investments for recruitment and retention and for the construction of the first hybrid-electric ferry vessel. 

Additionally, Governor has slated $140M to reduce transportation-related greenhouse gas emissions, like providing a state tax incentive for the purchase of electric vehicles. Inslee also dedicates 50 percent of the revenues generated from the Climate Commitment Act to transportation improvements for historically overburdened, under-resourced communities.

Inslee’s capital budget proposal includes a transfer of $600M of state funds and nearly $700M from federal sources.

There are various issue areas in these budget proposals that directly impact ports-- we will spend the coming days combing the budget documents for impacts and will be working with ports to directly engage legislators on key items, including:

Climate initiatives

·      decarbonizing new construction, including calling for the discontinuation of natural gas in new buildings

·      requiring Department of Ecology to advance legislation outlining how emissions-intensive, trade-exposed industries (EITEs) reduce emissions

·      implementation of the newly adopted Climate Commitment Act

·      amending the Energy Facility Site Evaluation Council that will affect port participation.

·      funds over $140 million to reduce greenhouse gas emissions in the transportation arena

·      dedicates at least 50% of funding to transportation improvements aimed at overburdened communities.

Salmon Recovery

·      funding for new culverts

Snake River Dams

·      Appropriated $375,000 to complete an analysis of the options to replace the benefits of the four lower Snake River dams. To be completed by July 30, 2022.

Ongoing and New Program Infrastructure Investments

·      new funds for derelict vessel removal

·      funding for manufacturing shovel-ready site development

·      pilot project and grant funding for the major cargo container ports

Want more details? The Governor’s Office has created a highlights document, plus the breakdown of the budgets here:  https://ofm.wa.gov/budget/state-budgets/gov-inslees-proposed-2022-supplemental-budgets/highlights-gov-inslees-proposed-2022-budget