Senate Democrats’ spending plan receives praise, criticism
OLYMPIA — Democratic leaders throughout the Legislature are pushing the delay of hundreds of million dollars in payments as a solution to the state’s budget deficit, lawmakers said Tuesday.
Senate budget writers unveiled their spending plan Tuesday morning, relying on that $330 million accounting maneuver to help fix a $1 billion problem. The Senate proposes to make the delayed payments permanent, meaning school districts that typically get a major disbursement at the end of June will instead get it in early July.
The Senate plan is similar to a House proposal unveiled last week, which had about $400 million in delayed expenditures. Democratic Sen. Ed Murray said that shift in the calendar allowed lawmakers to avoid further cuts in education at a time when other legislators are looking at deeper reductions.
“This is a game-changer,” Murray said. “We think part of the way of getting us out of this crisis is by funding, not cutting, education.”
The spending proposal in the Senate would keep $370 million in reserves, less than the House plan that would leave a half billion dollars remaining.
Senate Majority Leader Lisa Brown said lawmakers hope to soon deal with structural problems within the budget.
“The underlying structural issue is not addressed in this budget,” Brown said. “We feel the economic recovery is fairly tentative at this point, but we know we have to get to that eventually.”
Brown said the state needs to have a larger discussion about tax revenue, noting that revenue as a percentage of personal income in the state has been on a long-term slide. She said that revenue discussion will be critical to ensure the state has quality services such as education and a social safety net.
“If we want that kind of state, we are going to have to step up,” Brown said.
The current budget plan would raise $31 million by restricting a business tax deduction for first mortgages and a tax exemption for renewable energy equipment. It also seizes some $71 million from the new liquor privatization system that would otherwise go to local governments.
The fiscal conservatives in the Democratic caucus along with Republican Sen. Steve Litzow have indicated that they do not like the idea of delaying payments, though they have not closed the door to supporting a budget that includes them. Their priority is the approval of policy changes, including evaluations for teachers and a constitutional amendment that would require balanced budgets over a four-year period.
Mary Fertakis, president of the Washington State School Directors’ Association, said school districts had trouble handling a payment delay when it occurred last year — and that it forced some districts to take out short-term loans to handle the gap. With time to plan for the budget shift, she said districts should be able to handle the new proposal by temporarily dipping into their reserves.
Fertakis said the delay was far preferable to actual cuts.
Republican leaders in the Senate said they will not support a plan that delays payments. Sen. Joe Zarelli, R-Ridgefield, said the proposal will leave lawmakers with another budget hole to deal with when they return next year and that the gimmicks counter efforts in the Legislature to keep the budget consistently balanced.
“My approach was to live in the reality that we’re in,” Zarelli said.
