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June 22, 2011

Dear Friends and Neighbors,

After a 103-day regular legislative session and an additional 30-day special session the Legislature finally adjourned on May 25. A special session should not have been needed, especially at the expense of the taxpayers. We did finally pass an operating budget and made a good first step toward workers' compensation reform in the final days of the special session.

Operating budget, still unsustainable

I voted against the operating budget. It passed mainly on a party line vote in the House, 54-42, with two Democrats voting with Republicans against the measure. While some of our Republican budgeting principles were used initially, the final budget is still unsustainable and lacks regulatory reforms necessary for long-term fiscal responsibility.

Here are some reasons for my vote against the measure:

• It cuts K-12 education by $1.7 billion. In fact, 41 percent of the reductions in this budget come from education.
• It reduces teachers' salaries by 1.9 percent and puts the burden of the reduction on the local school districts.
• It puts public safety at risk by removing 2,119 offenders from active community supervision.
• It makes substantial reductions in programs for our developmentally disabled and long-term care facilities.
• It spends almost $5 million on the Commute Trip Reduction program which pays people to carpool.
• The sale of the governor's airplanes is canceled. It costs approximately $500,000 a year to maintain and operate each one.
• A program that pays the rent for recently released felons is expanded.
• 49 new or increased fees are included in the budget costing taxpayers about $248 million.

As I mentioned, some of our principles were implemented in the early budget negotiations as we worked with our counterparts across the aisle. However, we did draft our own budget proposal when it was apparent we were too far apart philosophically and our priorities didn't align. The House Republican budget did not cut education and public safety nearly as deep as the final budget agreement.

Capital budget

We passed a package of capital “construction” budget bills that fund projects through cash accounts, bonds and sets a statutory debt limit over time. This is the smallest capital budget in 11 years. Many of us continue to be very concerned with the escalating government debt at all levels of government – local, state and federal. We stayed under our debt ceiling by a significant amount and prioritized projects. The construction package provides infrastructure for K-12 education, higher education, correction facilities and provides maintenance and repair where it is needed most. With a stagnant economy and unemployment rates not dropping, it will provide some additional employment. Projects in the 12th District we were able to fund include:

• $1.69 million for the new Music and Arts Center at Wenatchee Valley College.
• $342,620 for the City of Wenatchee to purchase Saddle Rock.
• Don Morse Park. $500,000 for water-access improvements at Don Morse Park in Chelan.
• $5 million to the city of Bridgeport for upgrades to their wastewater treatment plant.
• $10 million to the city of Chelan for wastewater treatment plant improvements.
• $2.45 million for improvements to the Wenatchee water system through the Chelan County PUD.
• $1.87 million to the city of Wenatchee for improvements at their wastewater treatment plant.
• $765,000 for replacement of the Squilchuck lift station.
• $1.96 million for expansion of the sewer system to serve the Chatham Hill area near the Wenatchee River.

An important piece of the capital package that will allow us to work toward permanently lowering our debt limit is the passage of Senate Bill 5181. It sets a statutory debt limit reduction from 8.75 percent to 7.75 percent by 2020. The bill will also allow us to examine our debt by setting up a Commission on State Debt. I would have preferred more comprehensive debt reduction by sending a constitutional amendment to the voters, but we could not reach a final agreement. This law is a positive step.

Workers' compensation reform

The most contentious issue this session may have been workers' compensation reform, but we are able to pass a bipartisan bill House Bill 2123. I was heavily involved in the negotiations with the four caucuses and the governor. In fact, Rep. Matt Shea and I came up with the idea for the structured settlement agreements that helped break the logjam on the reform legislation negotiations. There are some unknowns with structured settlement agreements since no other state uses this type of structured agreement as an option. However, it is a good start in addressing our faltering workers' compensation system while also protecting injured workers. The measure will:

• allow negotiated, voluntary structured settlements for workers over age 55, reduced to 50 in 2016;
• offset any permanent partial disability received from the final settlement;
• incentivize return to work sooner by providing subsidies for employers to allow for light duty or transitional work options for employees;
• significantly reduce rate increases in 2012 and beyond for employers;
• provide payments for continued medical treatments and reopening of claims if medical condition gets worse;
• freeze cost of living adjustments for one year; and
• create a rainy day fund to prevent future drastic rate increases.

The rising costs of workers' compensation have become unsustainable for many employers struggling to keep their doors open and retain jobs. We have one of the highest workers' compensation pension rates in the country and our system is facing insolvency. Total workers' compensation benefits paid in Washington increased 70 percent from 1998 to 2008, compared to 34 percent growth for all other states over the same time period. This legislation is projected to save $1.12 billion in four years. (Photo: Governor signs workers' compensation bill.)

Unemployment insurance reform

Another success for our employers this session was bipartisan unemployment insurance reform. Senate Bill 5135, which provided employers a much-needed reduction of unemployment insur
ance rates this year, and House Bill 1091, which provides a more stable and long-term fix by recalculating the unemployment insurance tax rates for employers, were passed and signed into law early in the legislative session. Negotiations were difficult but not nearly as intense. The cost of unemployment insurance has been an obstacle for our employers to be successful, especially small businesses. Our employers pay into this system and benefits go to those who have lost their jobs. Unfortunately, employers have been overpaying into this system for many years. Last year unemployment insurance taxes increased $364 million on employers or an average of 42 percent.

District office, meetings, speaking engagements

Now that the session is over, I am working out of my district office. We are located in the Wenatchee Motorsports building north of Wenatchee located at 3031 G.S. Center Road. Please do not hesitate to contact my district office if you need assistance with a state issue, would like to schedule a meeting or inquire about me speaking or attending community events. You can call the district office at (509) 664-1274 or send me an e-mail at cary.condotta@leg.wa.gov.

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Thank you for allowing me to serve you.

Sincerely,

Cary Condotta