Southwest Washington lawmakers discuss new state budget

By Stevie Mathieu, Columbian assistant metro editor

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Southwest Washington lawmakers’ emotions ranged from pleased to concerned with the passage of a supplemental operating budget deal that had them working well into Wednesday morning.

The legislative session ended shortly after the Senate passed a budget measure on a 44-2 bipartisan vote and sent the bill to the governor for her signature. The House had passed the negotiated agreement on a 64-34 vote.

Lawmakers also approved fiscal reforms, and they agreed upon a capital investment budget that doles out money for several Clark County projects.

State representatives Jim Moeller, D-Vancouver, and Tim Probst, D-Vancouver, said Wednesday that they were happy to see the operating budget avoid major cuts to social service programs, K-12 schools and higher education.

“The bipartisan compromise budget brought forth the best ideas from both parties,” Probst said in a statement, which pointed out that no taxes were increased for Washington residents, that a constitutional debt limit was established and that the state now has a four-year balanced budget requirement.

The budget plan relies heavily on an accounting maneuver, valued at $238 million, in which the state would temporarily claim control of local sales taxes before they are redistributed back to jurisdictions at their usual time — roughly a month after they are collected.

The budget does increase one tax, raising $14.5 million by eliminating a tax deduction for some large banks. It also brings in some $12 million by changing rules on roll-your-own cigarettes.

Lawmakers plan to leave some $320 million in reserves.

“I think overall, we have a budget that maintains our basic values,” Moeller said. “It preserves the safety net, which is huge for me and my constituents.”

Moeller, who also has the duty of presiding over House debates, said another highlight of this year’s session was guiding the same-sex marriage debate.

Moeller said that, 20 years ago, “I just would have never imagined myself there.”

State Rep. Paul Harris, R-Vancouver, voted against the budget compromise. He said that the compromise was a success, but he said he ultimately could not vote in favor of it because it leaves a relatively small amount of money in reserves.

“It wasn’t a hard no,” Harris said of his vote. “It was a much better budget than what we started off with.”

Harris said he had hoped to see more than $700 million left in the state’s reserves. Gov. Chris Gregoire’s suggested supplemental operating budget called for a more than $600 million ending balance.

State representatives Ed Orcutt, R-Kalama, and Ann Rivers, R-La Center, also voted against the budget deal.

“I’m just worried that number is way too low,” Rivers said of the state’s reserves. She also said the Disability Lifeline program could have received cuts, and the Department of Ecology should have been cut deeper.

Orcutt, who serves on the House’s fiscal committee, said the $238 million accounting maneuver weakens the state’s reserves. The Department of Revenue sends money to local governments on a daily basis, but the maneuver will change that by allowing that local government money to accumulate in the state’s general fund. The state will have to pay that money back to local government at the end of each month, Orcutt said.

If the state needs to rely on reserves soon after it makes a payment to local government, it would have less to rely on, he said. He also said he doesn’t expect the next revenue forecast to be very sunny, given rising gas prices.

“It just doesn’t seem to be enough of an ending fund balance,” Orcutt said. “You’ll end up negative at some point.”

Capital projects

The capital budget project list includes $1.45 million toward the development stage of two new Clark County Skills Center buildings, $1.5 million to remodel the Clark County Family YMCA, and about $1 million toward Vancouver’s Waterfront Park.

Supporters of the capital budget say the projects will create roughly 18,000 jobs statewide.

The capital budget includes money to address stormwater issues in Vancouver and elsewhere in Clark County, $5.7 million for the Port of Vancouver’s Centennial Industrial Park project, and $610,000 in Washington Heritage grants for the city of Vancouver.

Budget reforms

Even though any special session can run up to 30 days, Gregoire said early Wednesday that lawmakers agreed to a one-day session, after they missed Tuesday’s 30-day deadline. Lawmakers had been passing bills tied to the budget right up until the deadline, but weren’t able to move everything before time ran out.

Part of the budget agreement was tied to a bill addressing early retirement benefits for future state employees. That measure had been a key sticking point between Democrats and Republicans. Senators approved the pension bill Tuesday by a margin of 27-22. It later passed the House, finalizing a deal that eluded lawmakers for months and delayed final action on the state budget.

State workers who retire before the age of 62 already have scaled-back pension benefits. Under the new bill, pension benefits for workers retiring at age 55 would be reduced by as much as 50 percent. The changes apply only to workers hired starting in May 2013. The plan would save the state an estimated $1.3 billion over 25 years.

The pension reform legislation was the brain child of Sen. Joseph Zarelli, R-Ridgefield. It went through some changes during the regular and special sessions. Initially, the bill would have limited some incoming state employees’ access to the state’s Plan 2 retirement benefits, enrolling them instead in Plan 3, which partly resembles a 401(k) retirement plan.

Also Tuesday, the House passed a measure that would require the state’s two-year budget to be in line with anticipated revenue over a four-year period or 4.5 percent growth per year, whichever is greater. The measure, another bill that was part of the budget negotiations, was passed by the Senate and headed to Gregoire’s desk.

“It’s safe to figure none of these reforms would have made it through the Legislature if our bipartisan coalition had not taken the lead on the budget process in the Senate,” Zarelli said in a statement released Wednesday morning.

On the afternoon of March 2, minority Senate Republicans gained support from three philosophically conservative Senate Democrats and used an uncommon procedural move to pass their own budget. This newer budget stalled in the House, which has a stronger Democratic majority.

Democrats blamed that unexpected shift in power for causing the special session, while Republicans pointed a finger at Democrats for spending time on a bill allowing same-sex couples to marry.

“The budget discussion ended with respectful bipartisanship, but from now on, they need to start with respectful bipartisanship,” Probst said Wednesday afternoon. “Much of the session was a staring contest between two adversaries rather than a respectful dialogue about how to fix problems. That’s the main thing that needs to change.”

The Associated Press contributed to this report.

Stevie Mathieu: 360-735-4523 or stevie.mathieu@columbian.com or www.facebook.com/reportermathieu or www.twitter.com/col_politics