Dear Friends and Neighbors,
The budgets have been unveiled and the threat of a special session is looming. First, the House Democrats finally released an operating budget proposal last week. It passed the House but I could not support it due to a number of concerns. It contains some budget gimmicks, including a $240 million one-day payment delay for students which would push that shortfall from the 2009-11 biennium into the 2011-13 budget cycle. The people sent us to Olympia to live within our means and provide a true balanced budget. This education spending gimmick is a poor example of that.
The questionable budgeting in this proposal does not end there. The budget also leases out operation of the state's liquor warehouse for 20 years to a private firm in exchange for $300 million up front in cash. The long-term loss of revenue to the state from this scheme would be enormous – about an 80 percent reduction. They also count the same money twice in two different budgets. The Real Estate Excise Tax (REET) is calculated in both the operating and capital budgets. However, the budget did pass on pretty much a party line vote, 53-43, with one Democrat voting against it with the Republicans.
House Republicans did release our own budget proposal this year. By contrast, I believe our budget team released an alternative budget solution that is sustainable, provides more for education and public safety, and offers true regulatory reform. The two budgets demonstrate the differences between our philosophies. You can find the principles we based our budget proposal on and the differences between the two proposals here.
The Senate released their budget proposal late Tuesday. We will be looking at how it compares to House Democrat and House Republican proposals over the next few days. The Olympian gave a breakdown of the major differences of the budgets. There is concern that the differences may be too great to reach a compromise before the 105-day session is set to expire on April 24. We have been here for over three months. There is no reason for us to be here in an extra session. The tough decisions could have been made in this timeframe.
Workers' compensation update
The workers' compensation debate continues to be a game of chess. I have met with the governor, the Speaker of the House, labor leaders and the business community. We even attempted a procedural motion to bring the bill directly to the House floor for a vote. Labor and House Democratic leaders refuse to give on the issue of “voluntary settlement agreements.” Tuesday was a cutoff date that technically dooms many bills in the Legislature every session, but because the workers' compensation bill we want to pass, Senate Bill 5566, was included in the Senate budget proposal, it now becomes a bill “necessary to implement the budget” or NTIB. That makes it exempt from the cutoff. It was included in the budget because it is projected to save the state about $16 million a year.
Instead of focusing on workers' compensation reform, the majority party decided instead to create an industrial insurance rainy day fund, House Bill 2026. The bill passed off the House floor Tuesday by a vote of 50-47, with a number of Democrats also opposing the bill with all the Republicans. You can listen to my floor speech by clicking here. The majority party is focusing on rainy day accounts for insurance systems rather than fixing our workers' compensation system. As I mentioned, the most interesting thing about this debate is the hang-up on the voluntary settlement agreements. The fact is, it was actually labor who asked for the settlement agreements in Oregon when they reformed their workers' compensation system twenty years ago. As a result, Oregon has not had to raise workers' compensation rates on their business in twenty years, their workers go back to work three times faster than we do, long-term pensions aren't a problem in their system, and they have very few complaints. The Association of Washington Business recently did a column on the issue: “Ore. labor leaders hailed lump-sum option. Why not here?” Gary Weeks, former Washington State Department of Labor & Industries Director and former director of Oregon's Department of Consumer and Business Services (DCBS), which oversaw Oregon's workers compensation system, recently sent a strong letter to House Speaker Chopp and legislators stating his support for settlement agreements. You can read the letter here. The Washington Roundtable published an excellent editorial in today's Tacoma News Tribune on the issue as well: “Workers' comp reforms languish.”
I did support the House transportation budget proposal, House Bill 1175. There are no new projects, but we managed to keep most of the transportation projects and keep them on schedule for construction. Most importantly for our district, we were able to preserve funding for the George Sellar Bridge to complete the improvements, including the bypass, new alignment and intersection.
However, it should be noted that since we adopted the House transportation budget, Democrats have introduced House Bill 2053 that would raise 92 fees on licenses and transportation related items. Let's call them what they are, tax increases. Calling them fees allows them to try and circumvent Initiative-1053 passed by the citizens last year requiring a two-thirds vote of the Legislature or a vote of the people.
As for a capital budget, we are still working out some differences between negotiators in the House and Senate, but hope to have an agreed upon budget soon.
While I am somewhat surprised at the fiscal restraint in the initial budgets (although this seems to be changing with the introduction of a number of tax and fee bills in the last week), I am very disappointed that we have done very little to improve the employment conditions in Washington. It was announced this week the unemployment rate increased in March. Other states are moving quickly to address this issue. We are not. The governor who came out swinging for reforms has retreated once again to the mansion, with very little accomplished. I had hoped for a change! It is obvious that special interest politics are once again taking precedent over good policy. What a shame!
In case you missed it on local access TV, click “here” for my video update this week.
Thank you for allowing me to serve you.