WA Governor - Bill Action
(May 18, 2021) - SB 5092

Governor Inslee signed the biennium operating budget which appropriated cannabis excise tax revenue and other general fund tax dollars among more than a dozen agencies.

Here are some observations from the Tuesday May 18th Washington State Office of the Governor (WA Governor) bill action.

My 16 takeaways:

• Governor Jay Inslee signed the biennium operating budget which allocated tax money to dozens of state agencies, emphasizing the tremendous impact the spending would have on social equity among other issues.
  • Inslee announced a proposed biennium budget for fiscal years (FY) 2021-23 in December 2020 (highlights, policy brief). The following month, SB 5092 ("Making 2021-2023 fiscal biennium operating appropriations") was heard by the Washington State Senate Ways and Means Committee (WA Senate WM) on January 12th and March 26th before recommending passage of the bill on March 29th. On April 1st, the Washington State Senate (WA Senate) passed an engrossed substitute version of the bill.
    • Learn about the supplemental operating budget signed by Inslee in April 2020.
  • On April 3rd, the Washington State House of Representatives (WA House) amended and passed the legislation. Differences in the versions passed necessitated the creation of a conference committee with members of both chambers appointed to negotiate a compromise that was agreed to on April 24th, the day before the end of the 2021 legislative session. A final conference committee striking amendment was adopted by WA House and WA Senate on April 25th before being sent to the Inslee for signing (bill text as passed by legislature, final bill report).
  • Inslee talked about the budget as focused on “relief, recovery, and resilience” during an unprecedented virtual legislative session. Despite forecasts of a "steep decline" in state revenue, he said the “most recent forecast was back to pre-pandemic levels.” The governor said SB 5092 “funds most of the relief, recovery, and resilience priorities I put forward in December” while also having “corresponding money for these topics in the capital budget” (audio - 8m, video).
    • Inslee reviewed several issues the budget provided money for, including ensuring “that our public health systems are better prepared to address future health care crises.” He deemed 2021 “a historic session for equity and the climate,” pointing to funding for environmental legislation in addition to “digital equity” through a “statewide broadband effort.” Inslee declared Washington state on “the right path to becoming more equitable,” as the budget would fund the Washington State Office of Equity (WA Equity)---for which Inslee appointed the first director on February 18th---and “establishes June 19th as a state holiday to recognize the country’s brutal history of slavery and honor the resiliency of Black Americans.”
      • Learn more from the Office of Equity Task Force.
    • Before signing the bill, Inslee shared his view that the supplemental operating budget he’d signed in April 2020 “kept Washington strong” while “today’s budget continues bolstering our public safety nets and invests in the people.”
    • Read the session law inclusive of Inslee’s vetoes, the governor’s summary of the 2021 session, and some of the difficulties Washington lawmakers encountered in legislating remotely.
    • Learn more about state fiscal predictions from the Washington State Economic and Revenue Forecast Council (WA ERFC), including the June 1st Preliminary Forecast wherein staff predicted state gross domestic product (GDP) would “increase 6.6% in 2021 and 4.4% in 2022 which is much stronger than the 5.7% and 4.1% growth rates assumed in the March forecast.” Check out other available data summaries released by WA ERFC officials.
  • Spending in SB 5092 from the cannabis excise taxes, license renewal fees, and monetary sanctions collected in the Dedicated Marijuana Account (DMA) or otherwise related to cannabis for FY 2021-23 has been identified below.
    • Washington state revenue from cannabis taxes and fees totaled $473,931,000 in FY 2020 according to an annual report by the Washington State Liquor and Cannabis Board (WSLCB), an increase from the $395,500,000 collected in FY 2019. The report also identified FY 2020 cannabis distributions and appropriations spent by other agencies.
    • Washington State University (WSU) Assistant Research Professor Timothy Nadreau provided lawmakers a presentation on recent federal cannabis legislation along with a report on the 2020 Contributions of the Washington Cannabis Sector that featured projections for 2021 excise taxes between $520.04 million to a high of $585.63 million.
    • The Washington State Office of Financial Management (OFM) has been Monitoring Impacts of Recreational Marijuana Legalization since 2015, with the last report in 2019. 

• Washington State Health Care Authority (WA HCA) - Community Behavioral Health Program: $56.986 million out of a total appropriation of $4.144 billion
  • Section 215 allotted $28,493,000 from the DMA in FY 2022 as well as FY 2023.
  • In (22)(a), $12,878,000 of the money in each year was budgeted for:
    • (i) A memorandum of understanding with the department of children, youth, and families to provide substance abuse treatment programs;
    • (ii) A contract with the Washington state institute for public policy to conduct a cost-benefit evaluation of the implementations of chapter 3, Laws of 2013 (Initiative Measure No. 502);
    • (iii) Designing and administering the Washington state healthy youth survey and the Washington state young adult behavioral health survey;
    • (iv) Maintaining increased services to pregnant and parenting women provided through the parent child assistance program;
    • (v) Grants to the office of the superintendent of public instruction for life skills training to children and youth;
    • (vi) Maintaining increased prevention and treatment service provided by tribes and federally recognized American Indian organization to children and youth;
    • (vii) Maintaining increased residential treatment services for children and youth;
    • (viii) Training and technical assistance for the implementation of evidence-based, research based, and promising programs which prevent or reduce substance use disorder;
    • (ix) Expenditures into the home visiting services account; and
    • (x) Grants to community-based programs that provide prevention services or activities to youth.
    • (b) The authority must allocate the amounts provided in (a) of this subsection amongst the specific activities proportionate to the fiscal year 2021 allocation.
  • (55) allotted $500,000 from the general fund“solely for the authority to contract on a one-time basis with the University of Washington alcohol and drug abuse institute to develop policy solutions in response to the public health challenges of high tetrahydrocannabinol potency cannabis. The institute must use this funding to: Conduct individual interviews with stakeholders and experts representing different perspectives, facilitate joint meetings with stakeholders to identify areas of common ground and consensus, and develop recommendations for state policies related to cannabis potency and mitigating detrimental health impacts. The authority must submit the following reports to the office of financial management and the appropriate committees of the legislature:
    • (a) An initial report must be submitted by December 31, 2021, and shall summarize progress made to date, preliminary policy recommendations, and next steps; and
    • (b) A final report must be submitted by December 31, 2022, and shall summarize the analysis conducted by the institute, the process and stakeholders involved, an inventory of relevant cannabis policies in other states, and recommendations for policy changes to reduce the negative impacts of high potency cannabis in Washington state.”
    • Legislation aiming to limit cannabis concentrates was heard by lawmakers on February 12th.
  • Section 1214 amended previously approved DMA spending in FY 2021, narrowly reducing allotted money from $28.493 million to $28.490 million.

• WA HCA - Medical Assistance: $49.693 million out of a total appropriation of $19.342 billion
  • Section 211(27) allotted $24,511,000 in FY 2022 and $25,182,000 in FY 2023 from the DMA for “contracts with community health centers under RCW 69.50.540 in lieu of general fund—state payments to community health centers for services provided to medical assistance clients, and it is the intent of the legislature that this policy will be continued in subsequent fiscal biennia.”
  • Section 1210 amended previously approved DMA spending in FY 2021, raising allocated money from $20.953 million to $26.906 million.

• Washington State Office of the Treasurer: $40 million out of a total appropriation of $652.015 million
  • Section 801 on revenue for distribution appropriated $40 million from the general fund for “Marijuana Excise Tax distributions” to city and county governments.
    • See a spreadsheet of distributions to local governments for FY 2016 through 2020.
  • The standing appropriation for spending from the DMA required under RCW 69.50.540 in Section 986(2)(g)(iv) which established that the “total share of marijuana excise tax revenues distributed to counties and cities in (g)(i) of this subsection (2) may not exceed [$15,000,000] in fiscal years 2018, 2019, 2020, and 2021, and [$20,000,000] per fiscal year thereafter” was modified to remove the following language: “It is the intent of the legislature that the policy for the maximum distributions in the subsequent fiscal biennia will be no more than [$15,000,000] per fiscal year.”

• Washington State Liquor and Cannabis Board (WSLCB) $23.183 million out of a total appropriation of $109.423 million
  • Section 142 allotted $11,575,000 in FY 2022 and $11,608,000 in FY 2023 from the DMA.
  • In (5), the budget sets aside $38,000 of the money in FY 2022 “solely to implement Engrossed Substitute House Bill No. 1443 (cannabis industry/equity).”
    • Learn how HB 1443 built upon a 2020 law that established the Washington State Legislative Task Force on Social Equity in Cannabis (WA SECTF), a social equity retail application process, and technical assistance grant program.
  • Section 1133 amended previously approved DMA spending, reducing money allocated in FY 2021 from $12.148 million to $10.846 million.
  • Section 1133 also tweaked the mysterious Washington State Task Force on Marijuana Odor (WA Task Force on Marijuana Odor) created through a 2020 budget proviso. The task force had been expected to issue final recommendations to the governor and legislature by the end of December 2020, but by September of that year agency staff reported task force members had not been appointed and no responsive bids had been received for a consulting contract. At publication time, the task force had not been mentioned publicly by WSLCB staff since that discussion - and SB 5092 modified the due date for the task force recommendations to June 30th, 2021.

• Washington State Department of Health (DOH): $21.836 million out of a total appropriation of $1.226 billion
  • Section 222 allotted $10,538,000 in FY 2022 and $10,562,000 in FY 2023 from the DMA.
  • In (28), $374,000 in FY 2022 and $362,000 in FY 2023 from the general fund were allocated “solely for implementation of Engrossed Substitute House Bill No. 1443.”
    • At publication time, WA SECTF was staffed by the Washington State Board of Health (SBOH) with funding through DOH, but that responsibility would likely be eventually transferred to WA Equity.
  • The standing appropriation for spending from the DMA required under RCW 69.50.540 in Section 986(1)(g) added $800,000 in FY 2022 and 2023 “for the administration of the marijuana authorization database.”
  • Section 1220 amended previously approved DMA spending in FY 2021, marginally reducing allotted money from $10.616 million to $10.615 million.

• Washington State Patrol (WSP): $4.846 million out of a total appropriation of $194.515 million
  • Section 402 allotted $2,423,000 in FY 2022 as well as FY 2023 from the DMA.
  • (2) establishes that the money is “solely for the Washington state patrol to partner with multi-jurisdictional drug and gang task forces to detect, deter, and dismantle criminal organizations involved in criminal activity including diversion of marijuana from the legalized market and the illicit production and distribution of marijuana and marijuana related products in Washington state.”
    • HB 1443 had included a required recommendation that WA SECTF members look at the potential of redirecting this spending from WSP “to a cannabis social equity program.” However, an amendment from Senator Curtis King removed this recommendation on March 11th. King represents Senate Republicans on WA SECTF.
  • Section 1402(3) amended previously approved DMA spending in FY 2021 ”for the Washington state patrol's drug enforcement task force” reducing the budgeted amount to $2.423 million from $2.793 million and modifying spending in (b) to remove $370,000 for “a case management system to serve as a repository for all information regarding criminal cases. This system must allow state patrol investigators to enter information and to search to provide patterns, trends, and links which will allow the state patrol to identify connections on criminal investigations including efforts to dismantle marijuana and other drug trafficking organizations by identifying their established networks, and is subject to the conditions, limitations, and review provided in section 701 of this act.”
  • The standing appropriation for spending from the DMA required under RCW 69.50.540 was also modified in Section 986(1)(d)(iii) to change the amount WSP received “for a drug enforcement task force” to $2.423 million from $2.793 million in FY 2022 and 2023.

• Washington State Department of Commerce: $3.944 million out of a total appropriation of $2.716 billion
  • Section 129 allotted $1,813,000 in FY 2022 and $1,809,000 in FY 2023 from the DMA.
  • In Section 129(78), the bill established that $163,000 in FY 2022 and $159,000 in FY 2023 must be spent “for implementation of Engrossed Substitute House Bill No. 1443.”
    • The standing appropriation for spending from the DMA required under RCW 69.50.540 was modified in Section 986(1)(j) to add $163,000 in FY 2022 and $159,000 in FY 2023 for the department “to establish a roster of mentors as part of the cannabis social equity technical assistance grant program under Engrossed Substitute House Bill No. 1443.”
    • Check out the discussion of the mentorship program from the WA SECTF Technical Assistance and Mentorship Work Group meeting on May 11th.
  • Section 1121(13) amended previously approved DMA spending for the 2020 law establishing WA SECTF by removing $1.1 million of DMA money in FY 2021.
    • The decrease was discussed at the January 25th meeting of WA SECTF and reflected the fact that the appropriated sum for FY 2021 was not distributed within that fiscal year.
  • The funds were instead carried over into the next biennium. The standing appropriation for spending from the DMA required under RCW 69.50.540 was modified in Section 986(1)(i) “to fund the marijuana social equity technical assistance competitive grant program under RCW 43.330.540” in FY 2022 and 2023, an increase from $1.1 million to $1.65 million.

• Washington State Office of the Superintendent for Public Instruction (WA OSPI): $1.333 million out of a total appropriation of $185.957 million
  • Section 501 allotted $520,000 in FY 2022 and $533,000 in FY 2023 from the DMA.
  • Subsection (4)(g)(i) allotted $280,000 in FY 2022 as well as FY 2023 from the general fund “solely 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.” The money from DMA had been “provided solely for the building bridges statewide program.”

• Washington State Department of Agriculture (WSDA): $1.248 million out of a total appropriation of $182.124 million
  • Section 311 allotted $621,000 in FY 2022 and $627,000 in FY 2023 from the DMA.
  • The standing appropriation for spending from the DMA required under RCW 69.50.540 was also modified in Section 986(1)(h) to specify $621,000 for FY 2022 and $627,000 for FY 2023 to WSDA “for compliance-based laboratory analysis of pesticides in marijuana.”
    • Find out more about the WSDA pesticide rules for cannabis.

• University of Washington (UW): $626,000 out of a total appropriation of $906.718 million
  • Section 606 allotted $263,000 in FY 2022 as well as FY 2023 from the DMA.
  • In (42)(a), $100,000 in FY 2022 from the general fund was “provided solely for the center for cannabis research at the university to collaborate with the Washington State University collaboration on cannabis policy, research, and outreach [CCPRO] to create frameworks for future studies. Each framework will include the length of time to complete, research licenses necessary, cost, literature review of national and international research, and a scope of work to be completed. The following frameworks shall be compiled in a report:
    • (i) Measuring and assessing impairment due to marijuana use; and
    • (ii) Correlation between age of use, dosage of use, and appearance of occurrence of cannabis induced psychosis.
    • (b) The report on the frameworks must be submitted to the appropriate committees of the legislature by December 1, 2021.”
  • The standing appropriation for spending from the DMA required under RCW 69.50.540 in Section 986(2)(c)(ii) extended the exception to fiscal years the legislature “must appropriate a minimum of [$1.021 million] to” UW to include FY 2021, 2022, and 2023. It revised the legislative intent that “this policy will be continued” into the 2023-2025 fiscal biennium.
  • Section 1602 amended previously approved DMA spending in FY 2021, reducing allotted money from $272,000 to $266,000.

• Washington State Department of Ecology (DOE): $546,000 out of a total appropriation of $652.245 million
  • Section 302 allotted $270,000 in FY 2022 and $276,000 in FY 2023 from the DMA.
  • The standing appropriation for spending from the DMA required under RCW 69.50.540 was modified in Section 986(1)(e) to specify $270,000 in FY 2022 and $276,000 in FY 2023 for “implementation of accreditation of marijuana product testing laboratories.”
    • The department was responsible for organizing the Cannabis Science Task Force, whose members last met on May 24th and were scheduled to convene---potentially for the last time---on June 11th.

• Washington State University (WSU): $276,000 out of a total appropriation of $565.152 million
  • Section 607 allotted $138,000 in FY 2022 as well as FY 2023 from the DMA.

• Washington State Board for Community and Technical Colleges (WA BCTC): $100,000 out of a total appropriation of $1.912 billion
  • Section 605(42)(a) allotted $100,000 from the general fund in FY 2022 “solely for the center for cannabis research at the university to collaborate with the Washington State University collaboration on cannabis policy, research, and outreach to create frameworks for future studies.” The appropriation established the same parameters for research as the funding for UW.

• The Evergreen State College (TESC): $75,000 out of a total appropriation of $73.954 million
  • Section 610(4)(g) allotted $75,000 in FY 2022 from the general fund “solely for the institute to review available research literature to investigate and describe any relationship between early substance abuse of cannabis, opioids, or cocaine and mental health disorders in young adults; and any relationship between nutrition and mental health disorders in young adults. The institute shall report its findings to the legislature no later than June 30, 2022.”

• Finally, SB 5092 described transfers from the DMA into the basic health plan trust account and general fund of amounts not otherwise appropriated.
  • Section 805 authorized two transfers:
    • One to the basic health plan trust account for “the lesser of the amount determined pursuant to RCW 69.50.540 or” $255 million in FY 2022 and $265 million in FY 2023.
    • Another to the general fund for “the lesser of the amount determined pursuant to RCW 69.50.540 or” $195 million in FY 2022 and $200 million in FY 2023.
  • Section 1802 increased FY 2021 DMA transfers:
    • Into the basic health plan trust account from $213 million to $272 million.
    • Into the general fund from $152 million to $212 million.

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