Dear Friends and Neighbors,
After nearly five months in Olympia the Legislature adjourned on May 25 after a 103-day legislative session and an additional 30-day special session. An operating budget, a capital budget and an agreement on workers' compensation reform were approved during the extra session. This e-mail update will provide you an overview of the key issues debated and passed in the final days.
I did not support the operating budget. It passed mainly on a party line vote in the House with two Democrats and all the Republicans voting against it. It failed to make structural reforms in how we govern, it is not sustainable, and its priorities were out of line, as it cut critical areas such as public safety and education either too deeply or inappropriately. I also voted against the measure for the following reasons:
- It cuts K-12 education by $1.7 billion. In fact, 41 percent of the reductions in this budget from come from education.
- It reduces teachers' salaries by 1.9 percent and puts the burden of the reduction on the local school districts.
- It transfers $204 million out of the education construction account.
- It puts public safety at risk by removing 2,119 offenders from active community supervision.
- It cuts 86 community corrections workers in addition to 385 community corrections employees being cut over the past two years.
- It spends almost $5 million on the Commute Trip Reduction program which pays people to carpool.
- A program that pays the rent for recently released felons is expanded.
- 49 new or increased fees are included in the budget costing taxpayers about $248 million.
Given our fiscal situation, I view this as a missed opportunity to implement some real government reforms. We were in a position to pass a fiscally responsible budget and provide some stability. This budget does not get us there. In fact, one day after the governor signed the budget, which had approximately $700 million in reserves, the economic revenue forecast came out and that number is now just over $160 million.
During the sessions, there was much debate on whether or not to pass a capital budget. I, along with many others, am very concerned about the escalating government debt at all levels – local, state and federal governments. However, at the end of the special session an agreement was reached on a package of capital “construction” budget bills that fund projects through cash accounts, bonds and sets a statutory debt limit over time. The agreed upon construction budget is reasonable and conservative. We stayed under our debt ceiling by a significant amount and prioritized projects. The construction package provides infrastructure for K-12 education, higher education, correction facilities and provides maintenance and repair where it is needed most. It protects our investments in the state's infrastructure. Part of the package was Senate Bill 5181, which sets a statutory debt limit reduction from 8.75 percent to 7.75 percent by 2020. The bill also sets up a Commission on State Debt, giving us an opportunity to examine our debt. I would have preferred more comprehensive debt reduction, by sending a constitutional amendment to the voters; but we could not reach a final agreement. This measure though, is still an important step toward lowering our debt limit permanently.
Workers' compensation reform
Possibly, one of the most significant issues this session may have been workers' compensation reform. After lengthy negotiations we are able to pass a bipartisan bill House Bill 2123. The measure will:
- allow negotiated, voluntary structured settlements for workers over age 55, reduced to 50 in 2016;
- offset any permanent partial disability received from the final settlement;
- incentivize return to work sooner by providing subsidies for employers to allow for light duty or transitional work options for employees;
- significantly reduce rate increases in 2012 and beyond for employers;
- provide payments for continued medical treatments and reopening of claims if medical condition gets worse;
- freeze cost of living adjustments for one year; and
- create a rainy day fund to prevent future drastic rate increases.
This legislation is projected to save $1.12 billion over the next four years. There are some unknowns with structured settlement agreements, since no other state uses this type of structured agreement as an option. However, with our workers' compensation system headed toward insolvency, this legislation should be a good start in addressing our faltering system, while protecting injured workers.
In Washington, workers' compensation benefits paid, grew from $1.3 billion in 1998 to $2.2 billion in 2008. An increase of 70 percent, compared to 34 percent growth for all other states. The increases in workers' compensation rates were to the point of being unsustainable for many employers trying to stay in business and retain jobs. The measure passed by a vote of 69-26.
Finally, I just want to say thanks, to all of you for partnering with me to keep Washington State the great state that it is and to help make Washington State even better tomorrow than it is today! Together we can!