Dear Friends and Neighbors,
The Legislature adjourned April 11, 2012 after a marathon 24-hour finish and agreement on operating and capital budgets as well as a series of government reform bills. It has been many years and sessions since bipartisanship played a role in the budgets and key pieces of legislation.
Many positive things that came out of both sides working in a bipartisan manner. It serves the taxpayers of Washington much better when we work that way.
This e-mail update provides you a brief review of the budgets and reforms we passed in the final days of the special sessions. I hope you find it informative. It is an honor to serve you in the Legislature.
Town Hall meetings
Rep. Larry Haler and I are hosting town hall meetings this Saturday, April 28, at three locations.
I hope you will join us so we can give you a wrap-up of the 2012 sessions. It is also important to me to hear your comments and concerns as we head into the interim. The town meetings will be held at the following locations and times:
10 a.m. – 11:30 a.m.
City Council Chambers
210 W. 6th Avenue
1:00 p.m. – 2:30 p.m.
City Hall Council Chambers
505 Swift Blvd.
3:00 p.m. – 4:30 p.m.
W. Richland Library
3803 W. Van Giesen Street
There were many things to like about the supplemental operating budget and some things not to like. On the positive side:
- it does not cut K-12 or higher education funding;
- it doesn't push school district payments into the next biennium, or skip a pension payment;
- it contains tax incentives for food processors, ports, wineries and craft distilleries to help spur economic expansion and job growth; and
- it is more sustainable than we have seen in quite some time.
However, I did not vote for the budget because:
- I am concerned it leaves the ending fund reserves dangerously low and could lead to another budget shortfall;
- the reforms associated with the budget need to be stronger and achieve more short-term savings; and
- the four-year balanced budget reform is only in statute and not a constitutional amendment.
If we see even the slightest downturn in our economy again we could be called back to Olympia for another special session. The final reserves are only $319 million. When you consider $238 million of this amount is a result of a new accounting maneuver for local sales tax payments, our state's ending-fund balance is more like $81 million. Given how unpredictable our tax collections have been, this ending fund balance is not responsible.
The capital budget was probably the most difficult piece of legislation negotiated this session. Debt is a concern at all levels of government right now. However, I supported a strong, bipartisan capital budget. It is a reasonable and responsible plan that provides infrastructure for our correction facilities, education and higher education systems, hospitals, sewer and water projects. The economy is still languishing, so this was not only an important piece of legislation to invest in our state's infrastructure but it is about putting people back to work.
Four-year budget outlook
The frustrating part of the budget process has been the failure to look ahead and take into consideration spending policies and how they impact future budget cycles.
This reform will require:
- the Legislature to balance operating budgets over four years before one is adopted;
- lawmakers to balance a spending plan in the current two-year budget cycle – and also in the following two-year cycle; and
- legislators to consider the long-term effects of their spending decisions.
Washington is the first state in the nation to adopt this budgeting practice.
State pension reform
Washington state's pension system is in much better shape than most, but investment returns in the system have been down with the economy, and it is likely contribution rates will increase in the future. This reform only affects new hires and reduces some of the early retirement benefits for state employees hired after 2013. The rich benefit package for early retirees is something the state can no longer afford. This reform measure is expected to save the state about $1.3 billion over the next 25 years. It will also help bring sustainability to the pension system.
Health insurance for educators and public-school employees
Health insurance costs have skyrocketed for almost everyone, particularly employees in our K-12 school systems. They have seen their take home pay suffer and many feel they are being priced out of coverage.
We passed legislation that will:
- require school districts to disclose expenses, reserves, fees and premium costs, and use open, transparent contracting for health insurance;
- ask all employees to contribute something to their coverage, the cost of which will be collectively bargained;
- give school employees access to a plan similar in premium cost to one offered for state employees, and to high-deductible health plans and health savings accounts;
- move us toward more equitable costs between individual and family coverage plans;
- create competition and choice; and
- hold the state more accountable for the $1 billion it spends on these benefits.
Cost savings for local governm
House Bill 2834 was a measure we were able to include in the package of reforms passed on the last day of session. It may not appear to be a significant piece of legislation, but it is to local governments. It reduces reporting requirements and provides savings for our cities and counties.
The bill creates some fiscal breathing room for county and local governments as they deal with tight budgets. It ensures local tax dollars are spent on the needs in the communities rather than unnecessary reports required by the state.
Improving revenue and budget sustainability
As you know, the manufacturing and processing of foods is vital to our region. The construction of data centers in our state has also provided hundreds of jobs and benefitted our economy. We passed Senate Bill 6635 that included the extension of tax incentives for fruit, vegetable, dairy and seafood businesses through 2015, as well as the tax incentive for data center equipment through the same year. There are other pieces to the bill. But the main issue is that it will bring jobs and revenue into Washington.
Over the next few weeks I will no longer be able to send out e-mail updates due to legislative ethics rules. However, please do not hesitate to contact me if you have any comments or concerns about a state issue or need assistance with a state agency. During the interim, I am also happy to meet with you and your neighbors, community group, or work colleagues to discuss issues of importance to you.
Thank you for allowing me the great honor to serve you. God bless you one and all!