WA Governor - Bill Action
(March 29, 2024)

Here are some observations from the Friday March 29th Washington State Office of the Governor (WA Governor) Bill Action.

My top 17 takeaways:

• The State supplemental operating budget had been among the final bills passed and signed into law, reflecting priorities and legislation passed each session.
  • Washington State’s biennium budget is created during 100-day sessions in odd-number years, with a supplemental budget with additions and adjustments created during shorter 60-day sessions in even-numbered years. The most recent operating budget was signed in May 2023, and the last supplemental budget for the preceding biennium became law in March 2022.
  • In December 2023, Governor Jay Inslee’s office released a proposed budget which the legislature used as a starting point for SB 5950 (“Making 2023-2025 fiscal biennium supplemental operating appropriations”) and its House companion bill, HB 2104.
    • In the Senate, the bill was heard by the Washington State Senate Ways and Means Committee (WA Senate WM) on January 9th and February 19th, with members recommending passage on February 21st. The measure was scheduled for floor action the following day, and passed by senators on February 23rd by a vote of 45 to 4.
    • Once in the House, SB 5950 had first, second, and third readings on February 24th, and was passed after being amended with a vote of 58 to 37.
      • Three representatives were excused from the vote.
    • Two sections with previously approved cannabis revenue on compensation and central services adjustments were removed entirely from the budget.
      • In 2023, Section 738 included $20,000 in cannabis revenue “provided solely for the impacts of compensation adjustments on state agencies supporting employees” which was not in SB 5950.
      • Similarly, Section 739 showing previously reduced funding from cannabis taxes for “impacts of central services adjustments” was removed altogether.
  • When the revised version was returned to the Senate, a conference committee to iron out differences was requested on March 4th, which the House granted the next day. A common occurrence with budgets, the resulting conference report represented compromise language which the committee approved on March 6th, and was adopted by both chambers on March 7th, at which time the bill as passed by lawmakers was transmitted to the Governor’s office.

• Inslee offered remarks and recognized the signing of SB 5950 (“Making 2023-2025 fiscal biennium supplemental operating appropriations”) was likely to mark his final executive bill action.
  • Inslee signed the budget at the University of Washington (UW) Medicine Center for Behavioral Health and Learning, which he noted was “the first behavioral health teaching hospital in American history.” He further touted progress being made through the budget on issues like homelessness, public safety, and climate change (audio - 10m, video - TVW).
  • Coming at the end of the bill signing session, Inslee reflected that “nothing can restrain the State of Washington…we are boundless.” He thanked prime sponsor and WA Senate WM Chair June Robinson for her leadership, adding that the measure “represents a lot of work by many legislators.” Absent an unexpected special session of the legislature, Inslee acknowledged SB 5950 “will be the last bill I sign as Governor of this great state,” adding “we all love the Evergreen State, and long may she thrive” (audio - 1m, video - TVW).
    • Other legislators involved in the budget process also offered brief remarks on the importance of the bill.
    • Besides behavioral health, Inslee’s office highlighted increased educational funding under SB 5950.
  • Inslee did make a partial veto of the bill, discussing what he was striking and why in his veto message, though nothing had a direct impact on cannabis policies. The law took immediate effect with his signature.

• $626,000 was appropriated for work by the Washington State Joint Legislative Audit and Review Committee (JLARC) mandated under a 2023 law to modify and expand a cannabis social equity program.
  • Section 103(4) of the session law allotted $626,000 from the performance audits of government account - state for a required audit related to 2023 social equity legislation SB 5080 to determine “whether current levels of cannabis production align with market demand and capacity, including the impact of any additional cannabis producer licenses granted under the legislation.” The report was due by June 30th, 2025.
    • A Washington State Liquor and Cannabis Board (WSLCB) rulemaking project to implement SB 5080 was opened in November 2023, with staff claiming on March 26th they were scheduling focus groups in April and May; and trying to “finalize some stakeholder questions that will be discussed.”
  • JLARC published a final staff report on Appropriations and Expenditures of the Dedicated Cannabis Account on January 4th after providing a preliminary briefing to the committee in November 2023. The report grouped expenditures and appropriations from cannabis revenue into several categories:
    • “The state spent about 54% of funds on health care for children enrolled in Medicaid.
    • State agencies spent 12% for cannabis-related activities including prevention, administration/enforcement, research, and social equity.
    • About 34% of funds were transferred to the general fund or distributed to local governments. There were no restrictions on how these funds were used.”

• $106,972,000 in funding went to the Washington State Health Care Authority (WA HCA) with the vast majority of the money going to medical assistance, community health centers, and behavioral health programs.
  • Section 211 directed $47,317,000 from the DCA toward WA HCA medical assistance, including $24,105,000 in FY 2024 and $23,212,000 in FY 2025. Subsection (27) indicated the sum was a recommended appropriation under RCW 69.50.540(2)(e) for “contracts with community health centers…in lieu of general fund—state payments to community health centers for services provided to medical assistance clients.”
  • Section 215 budgeted $56,999,000 from the DCA to the Community Behavioral Health Program at WA HCA, and the funds for each year were closely split with FY 2025 only $3K higher.
    • $25,756,000, or just over 45% of that money, was identified in Subsection (22)(a) as a suggested appropriation in RCW 69.50.540(1)(a) instructing that it be spent on the behavioral health program, divided evenly with $12,878,000 for both FY 2024 and 2025.
    • Subsection(113)(c) appropriated $2,000,000 from the opioid abatement settlement account for prevention services “that address underage drinking, cannabis and tobacco prevention, and opioid, prescription, and other drug misuse among individuals between the ages of 12 and 25.”
  • Subsection (137) set aside $328,000 in federal general funds and $328,000 in state general funds for a total of $656,000 “provided solely for the authority to contract with the University of Washington addictions, drug, and alcohol institute for implementing Second Substitute House Bill No. 2320.”
    • In HB 2320 as passed by the legislature, the WA HCA was required to issue a request for proposals (RFP) which could be considered to have been weighted in UW ADAI’s favor as funding was “solely” allocated to award the contract to the Institute.

• $24,231,000 was allocated from the DCA to the Washington State Department of Health (DOH) and another $5,666,000 from the general fund related to the patient authorization database, the Washington State Poison Center (WAPC), and implementing high tetrahydrocannabinol (THC) legislation.
  • In a slight increase over 2023, Section 222 included $24,231,000 from the DCA, $11,863,000 in FY 2024 and another $12,368,000 in FY 2025.
  • Subsection (11) invested $725,000 in FY 2024 and 2025 from the general fund for the WAPC as a standing appropriation in RCW 69.50.540(1)(b)(ii).
    • The companion bill in the House had an additional $500K for UW ADAI for FY 2025.
  • Subsection (51) maintained 2023 spending of $2,062,000 for FY 2024 and $1,454,000 for FY 2025 through the general fund “solely for the department to complete upgrades to the medical cannabis authorization database to improve reporting functions and accessibility, and is subject to the conditions, limitations, and review requirements of section 701 of this act.”
  • Subsection (168) added $200,000 for implementation of HB 2320.

• $65,101,000 was allocated through several accounts to the Washington State Liquor and Cannabis Board (WSLCB) for cannabis programs and agency modernization and administration.
  • Section 144 disbursed $27,536,000 from the DCA, $13,481,000 in FY 2024 and $14,055,000 in FY 2025 and 2025 for agency administration and operation.
  • Subsection (2) distributed $35,278,000 from the liquor revolving account for the ongoing systems modernization project (SMP)“subject to the conditions, limitations, and review requirements of section 701 of this act,” which pertained to technology investment by State agencies.
    • The 2024 budget maintained spending established in 2023 for the project, which was started in 2015. The Washington State Office of the Chief Information Officer (OCIO) project dashboard for SMP indicated the project experienced delays and the loss of a vendor in 2017 leading to a need for more funding, including almost $18 million in a budget request from November 2021.
    • At publication time, the public-facing outcomes from the multi-year, multi-million dollar SMP consisted of a web portal to file public records requests, banquet permits, and individual alcohol import permits.
  • Subsection (5) kept in place $409,000 for implementation of SB 5367, a 2023 law on tetrahydrocannabinol (THC) regulation. The funds were set at $250,000 in FY 2024 and $159,000 in FY 2025.
    • WSLCB staff planned 12 workshops—in addition to three held near the end of 2023—to review draft language for the rulemaking project. At time of publication, the second of the Workshop #1 groups met on March 28th, and the first Workshop #2 was held on Tuesday April 9th, with another set for Friday April 12th.
  • Subsection (6) provided both DCA and general funds to implement SB 5080:
    • $1,622,000 in FY 2024 and $357,000 in FY 2025 from the general fund, an increase of more than $400K over the appropriation in 2023.
    • $2,255,000 in FY 2024 and $1,463,000 in FY 2025 from the DCA.
  • Subsection (11) set aside $245,000 in general funds for implementing SB 5376 (“Allowing the sale of cannabis waste”) which was signed by Inslee on March 25th.
  • Subsection (12) allotted $63,000 from the general fund for implementing HB 2320 ("Concerning high THC cannabis products").

• $7,049,000 from the dedicated cannabis account (DCA) was allocated to the Washington State Department of Commerce (WA Commerce) for economic development related to social equity and some program support.
  • Section 129 disbursed $3,446,000 for FY 2024 and $3,591,000 for FY 2025 for the Office of Economic Development, a minor increase of $4,000 for FY 2025 over the previous budget.
    • While not identified in SB 5950, the department has been responsible for a cannabis social equity technical assistance grant program and mentor roster established by HB 2870 in 2020. The increase may relate to changes and expansion of the program under SB 5080.
    • In 2024, department staff faced criticism from several applicants over the slow development of a social equity technical assistance grant program.
  • Section 131 budgeted $5,000 for FY 2024 and $7,000 for FY 2025 as general program support.

• $4,336,000 was disbursed to the Washington State Office of the Attorney General (WA OAG) related to an organized retail theft task force and implementing previously-passed cannabis social equity legislation.
  • Similar to the 2023 budget, Section 125(15) included $2,265,000 from the state general fund for a dedicated organized retail crime office, and a portion to support the Washington State Organized Retail Crime Task Force to “coordinate, investigate, and prosecute multijurisdictional retail crime,” specifically $755K for fiscal year (FY) 2024, and $1,515,000 for FY 2025.
    • Not much task force work has been cannabis-specific, though they hosted a panel of sector representatives in March 2023 as thefts had impacted cannabis stores for several years.
      • Although senate committees did hear about SB 6133 (“Deterring robberies from cannabis retail establishments”) in the 2024 session, no legislation specific to the situation was passed. Robberies continued following the end of the session.
  • Subsection (19) appropriated $2,071,000 of the legal services revolving fund for implementation of SB 5080, which in particular anticipated legal counsel provided by WA OAG in defense of WSLCB.

• $3,154,000 was budgeted from the general fund to the Washington State Department of Agriculture (WSDA) to fund cannabis laboratory standards, maintain pesticide testing of cannabis samples, and fund hemp market research.
  • Continuing budgeting from 2023, Section 311(8) appropriated $842,000 for FY 2024 and $822,000 for FY 2025 from the general fund related to implementation of a 2022 law on lab quality standards that established the WSDA-led Cannabis Lab Analysis Standards Program (CLASP) to coordinate redistribution of cannabis regulatory responsibilities across several agencies.
  • Subsection (26) was a standing proviso from RCW 69.50.540(1)(k) which set aside $635,000 a year for FY 2024 and 2025 for WSDA laboratory pesticide testing of cannabis samples.
  • Subsection (27) dedicated $220,000 for FY 2025 “solely for the agency to partner with the department of commerce to conduct a study to better understand the opportunities and challenges, as well as identify solutions to existing barriers, to create a healthy marketplace for hemp.”

• $388,000 was allocated to the Washington State Patrol (WSP) for implementation of a THC regulation law.
  • As in 2023, Section 402(7) provided $320,000 for FY 2024 and $68,000 for FY 2025 from the general fund “solely for implementation of Engrossed Second Substitute Senate Bill No. 5367 (products containing THC).”
  • Funding for WSP staff “to partner with multi-jurisdictional drug and gang task forces to detect, deter, and dismantle criminal organizations involved in criminal activity” related to cannabis was removed from the budget, a difference noted in the 2023 operating budget.

• $49.5 million was designated for the Washington State Administrative Office of the Courts (WA AOC) to manage implementation of the State v. Blake decision related to knowing substance possession, including vacating past convictions.
  • Section 113(12) appropriated $38 million from the Blake-specific judicial stabilization trust account “solely to assist counties with costs of complying with the State v. Blake decision that arise from the county's role in operating the state's criminal justice system, including resentencing, vacating prior convictions for simple drug possession, and certifying refunds of legal financial obligations and collections costs. The office shall contract with counties for judicial, clerk, defense, and prosecution expenses for these purposes if requested by a county, and/or a county may designate the office to use available funding to administer a vacate process, or a portion of the vacate process, on behalf of the county,” and  “must collaborate with counties to adopt standard coding for application to Blake convictions and to develop a standardized practice regarding vacated convictions.”
  • Subsection (13) pertained to the remaining $11.5 million from the account to “assist cities with costs of complying with the State v. Blake decision that arise from the city's role in operating the city's criminal justice system, including vacating prior convictions for simple drug possession, to include cannabis and possession of paraphernalia, and certifying refunds of legal financial obligations and collections costs,” and similar requirements to collaborate with local governments on coding and standardization in handling vacated convictions.
  • Find out more from the special session in May 2023 where lawmakers passed SB 5536 (“Concerning controlled substances, counterfeit substances, and legend drug possession and treatment”) in response to the court case.

• $597,000 was budgeted for the Washington State Office of Administrative Hearings to handle licensing appeals from the cannabis social equity program.
  • Section 134(1) appropriated money from the administrative hearings revolving account to implement SB 5080, as licensees may appeal their application scoring under the program.
    • WSLCB staff reviewed the status of equity applicants with board members on January 31st.

• $580,000 of general fund dollars went to the Washington State Criminal Justice Training Commission for improved training of limited authority Washington peace officers, which covered some WSLCB Enforcement and Education staff.
  • Identical to 2023, Section 218(11) invested $290,000 a year for FY 2024 and 2025 “for academy training for limited authority Washington peace officers employed by” WSLCB and other agencies.

• $1,829,000 was directed to the Washington State Office of the Superintendent of Public Instruction for the Building Bridges dropout prevention program.
  • In Section 501, $1,211,000 from the DCA was allotted to the office, $593,000 in FY 2024 and $618,000 in FY 2025.
  • With higher spending than in 2023, Section 501(4)(g)(i) provided the Building Bridges statewide program with $873,000 in FY 2024 and $1,148,000 in FY 2025. The money goes to assist with programs for “dropout prevention, intervention, and reengagement programs, including the jobs for America's graduates (JAG) program, dropout prevention programs that provide student mentoring, and the building bridges statewide program. Students in the foster care system or who are homeless shall be given priority by districts offering the jobs for America's graduates program.” As well as DCA money, the program was allocated $280,000 a year from the general fund.

• $1,217,000 was disbursed to the University of Washington which conducted cannabis research, and maintained funds for Addictions, Drug, and Alcohol Institute (UW ADAI) staff to make materials related to first episode psychosis.
  • Section 602 appropriated $717,000 from the DCA for UW, $351,000 in FY 2024, and $366,000 in FY 2025. RCW 59.50.540(1)(e) and (f) recommended the university receive $325,000 annually for maintaining online cannabis educational resources and studying “the short-term and long-term effects of cannabis use to include, but not be limited to, formal and informal methods for estimating and measuring intoxication and impairments, and for the dissemination of such research.”
  • Continuing previous spending, Subsection (61) was a proviso for $500,000 from the workforce education investment account to be used by UW ADAI staff “to develop resources regarding the connection between first episode psychosis and cannabis use.”

• $386,000 was allocated to the Washington State University (WSU) to support standing appropriations for cannabis research.
  • As in 2023, Section 603 incorporated $189,000 for FY 2024 and $197,000 for FY 2025 to support RCW 69.50.540(2)(c)(i) work in “research on the short and long-term effects of cannabis use, to include but not be limited to formal and informal methods for estimating and measuring intoxication and impairment, and for the dissemination of such research.”

• $857,216,000 was allocated from the DCA to the Washington State Treasurer for deposit into the Basic Health Plan Trust Account and general fund, along with funding related to previous legislation on cannabis revenue.
  • Section 801 disbursed $47,216,000 for “Cannabis Excise Tax distributions pursuant to” city and county governments under SB 5796 which became law in 2022 and changed various standing appropriation amounts. The budget “include[d] an increase of $1,178,000 which is an adjustment for distributions made in fiscal year 2022.”
    • SB 5796 separately mandated the JLARC report on cannabis appropriations released at the beginning of 2024.
  • Section 804 transferred $250,000,000 for FY 2024 and 2025 from the DCA to the Basic Health Plan Trust Account in accordance with RCW 69.50.540(3)(a).
    • Learn more from the Washington Marijuana Revenues and Health page.
  • Section 804 also moved $155,000,000 for FY 2024 and 2025 from the DCA to the State general fund to align with the suggested appropriations in RCW 69.50.540(3)(d).