House budget plan would maintain some Larch funding

Other proposals good, bad for region

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State leaders split on sales tax hike

There’s good news and bad news for Southwest Washington in the House and Senate supplemental budgets released Tuesday in Olympia.

Good news: Larch Corrections Center, slated for closure by Gov. Chris Gregoire, may get a reprieve. The House budget includes money to keep half the 480-bed minimum-security facility open.

“A lot of people in our community came together to argue for this,” said Rep. Jim Jacks, D-Vancouver. “I was able to pick up quite a bit of traction when I talked about preserving capacity within the corrections system. If you start looking at trends over the next few years, we might shut down some of these facilities now, but in a few years we might need them again.”

State leaders split on sales tax hike

The House budget estimates that closing half the Larch facility would save about $3.8 million between now and June 30, 2011. Downsizing of Larch already is under way.

The Senate bill eliminates funding for the prison, but Sen. Joe Zarelli, R-Ridgefield, said Senate Majority Leader Lisa Brown, D-Spokane, has promised to restore funding for Larch before the budget reaches the Senate floor.

“I don’t think ultimately we’ll know whether Larch is open or closed until the gavel on the last day of the session,” Jacks said.

Not-so-good news: The House budget calls for eliminating funding for the Columbia River Gorge Commission; the Senate budget would slash funding for the bistate panel by nearly 40 percent, from $886,000 to $587,000.

Defunding the commission that enforces development rules in the scenic area would effectively abolish it, because Oregon and Washington are required to contribute equal amounts to its budget.

Good news: Somehow, Sen. Craig Pridemore, D-Vancouver, managed to double funding for rehabilitation of the Chelatchie Prairie Railroad tracks between Vancouver and Battle Ground. The Senate transportation budget increases funding for the project from $1 million to $2 million.

The county’s short-line railroad, which is suitable for carrying freight from Battle Ground to the BNSF Railway line along Vancouver Lake, carried 46 cars in the month of January from 11 shippers along the line.

The railroad’s biggest customer is Omega Industries, which builds railroad track and concrete panels for railroad crossings.

Zarelli was unhappy with Senate Democrats’ plan to close a long list of tax loopholes, on everything from livestock nutrients to community solar projects.

“Every one of those you can trace back to a small business or entity that will simply pass it on to consumers,” he said.

However, environmentalists praised the Senate budget proposal to eliminate the $5 million annual tax break enjoyed by the state’s only coal-fired power plant. The Centralia plant, owned by Canadian corporation TransAlta, is the state’s largest stationary source of greenhouse gas emissions yet enjoys an exemption from the sales and use tax on coal.

Doug Howell of the Sierra Club called eliminating the tax break a matter of economic justice.

“As Washington faces the biggest financial crisis in state history, it is unconscionable to think that our state’s most harmful polluter should be allowed to continue receiving tax breaks,” he said.

House and Senate Democrats released separate operating budgets with different strategies for closing a $2.8 billion budget deficit. Both budgets propose a combination of program cuts, new revenue, expected infusions of federal dollars, fund transfers and use of reserves.

The Senate budget details specific proposals to narrow or eliminate tax loopholes, hike the cigarette tax by $1 a pack, and impose a temporary 0.3 percent sales and use tax. The House has not yet released its revenue proposal.

The Senate also proposes to revive a “Working Families Tax Rebate,” passed in 2008 but never funded. The rebate, sponsored by Pridemore, would refund a portion of the state retail sales tax to as many as 370,000 Washington households.

Sen. Margarita Prentice, D-Renton, chairwoman of the budget-writing Ways and Means Committee, praised the Senate plan as “a balanced budget that will get our communities through and beyond this recession.”

But Zarelli, ranking Republican on Ways and Means, said the budget is short-sighted and fails to show how the state will weather another shortfall in 2011.

“I think we have to do more to cut spending through reductions and reforms,” he said. “We still have next year to look forward to. Even with the new revenue we still have a $2 billion deficit in the next tax cycle.”

Columbian staff writer Michael Andersen contributed to this story.