Tag Archives: Capital Budget

The Beginning of Week Three

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While many of us on Evergreen’s campus consider today the first day of spring term, for those of us with a foot in the legislative arena it also marks the first day of week three of the first special session of 2010. Is there any end in sight?

Negotiations continue on the 2010 supplemental operating and capital budgets. Though no agreements on either budget have been finalized, the issue  that has kept legislators in Olympia 15 days beyond the end of the regular session is revenue. More specifically, the sales tax and whether to increase the sales tax or not. The Senate is in favor and the House and Governor are not.

On Friday, some suggested that the Senate’s decision to move Senate Bill 6143 (revenue bill) to conference may be a small and optimistic sign towards the passage of a supplemental budget.  Optimism continued to rise, when later that day in a press conference Sen. Brown eluded to looking for $200 million in taxes to replace the Senate’s proposed sales tax increase. The source of these taxes was not made clear.

Both of these moves may lead one to be more optimistic than even 48 hours ago. However, there are still many in the Senate who support a sales tax and have concerns with regard to the business tax increases, proposed by the House, that are still in the mix.

As for now, the bills needed to implement a 2010 supplemental operating budget, 2010 supplemental capital budget, and increase revenue remain where they were at the end of last week. In addition, the bills that Evergreen is tracking this special session also have not moved further in the process.

Day Twelve of Special Session; Nearing End of Week 2

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Yesterday was the first time since Monday that the Senate floor was active. Most Senators returned to Olympia for a brief floor session to concur on a handful of House bills. The House did not take any floor action.

Of most interest was the action the Senate took on Senate Bill 6143 (revenue tax bill). The Senate rejected the House’s amendments to SB 6143 and formally asked for an official Conference Committee.

In the meantime, the leadership of both chambers continue behind-the-scenes negotiations on a tax package to fund the 2010 supplemental operating budget and take action on a 2010 supplemental capital budget.

Lawmakers remain deadlocked over how to raise this revenue, the primary dividing point being the implementation of a sales tax. The Senate still supports a temporary general sales-tax increase and the House does not.

The ongoing divide between the two chambers has opened the door for “what if” conversations about concluding the session without the adoption of  a budget. The state’s budget for 2009-11 is already in place (i.e. the budgets that passed at the end of the 2009 session) and a supplemental budget is not required. 

These conversations, which can be recognized as still too-early conversations at this time, fail to address the state’s remaining $2.8 billion budget problem.  As you may recall, State Treasurer McIntire publicly stated earlier this year that Washington is at risk of running out of “cash” by fall 2010 without new revenues or reductions in budget expenditures. At that point, Governor Gregoire would have the authority and legal obligation to implement across-the-board cuts. An option she has been public about in the last few days but does not desire.

An across-the-board reduction of state funding is not appealing to many policymakers. It is believed that such action could be as high as 20 percent to close the $2.8 billion budget gap.   Some believe that yesterday’s move by the Senate to move Senate Bill 6143 to conference may be a small and optimistic sign towards the passage of a supplemental budget, only time will tell.

As for now, the bills needed to implement a 2010 supplemental operating budget, 2010 supplemental capital budget, and increase revenue remain where they were this weekend, with the execption of SB 6143 which has gone to conference. In addition, the bills that Evergreen is tracking this special session also have not moved further in the process.

Week Two of Special Session Nears End; Adjournment Still Unclear

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As Special Session nears the end of week two, movement has been slow but still forward in nature.  Today, the full Senate is on the floor to move a handful of job-creation related bills, while the House is expected to return to the floor tomorrow.  The leadership of both chambers have been in negotiations for most of the week while the majority of legislators have been away as negotiations continue.

As stated earlier this week, policymakers have reached an agreement that $800 million is the revenue target. In addition, negotiations are taking place with regard to the operating and capital budgets for the 2010 supplemental session, though neither can be finalized until the elephant in the room is resolved – revenue.

Lawmakers remain gridlocked over how to raise this revenue, the primary dividing point being the implementation of a sales tax. The Senate still supports a temporary general sales-taxe increase and the House does not.

Frustration is in abundance. The Democrats are frustrated that they cannot get the votes necessary to pass an agreed upon revenue package. The Republicans are frustrated because the special session continues. The Governor is frustrated regarding all the above.

In the latest to come out of Olympia, Governor Gregoire has made it clear that she may be forced to make across-the-board cuts of 20 percent if the Legislature does not reach a budget-balancing agreement.  Gregoire has no plans to call a second special session unless a firm deal is in place. In lieu of any firm deal post the first special session, the only other choice would be across-the-board cuts.

As for now, the bills needed to implement a 2010 supplemental operating budget, 2010 supplemental capital budget, and increase revenue remain where they were this weekend. In addition, the bills that Evergreen is tracking this special session also have not moved further in the process.

Special Session Enters Second Week

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Nine days into the first special session of 2010, policymakers have reached an agreement that $800 million is the revenue target.

However, lawmakers remain gridlocked over how to raise this revenue, the primary dividing point being the implementation of a sales tax. The Senate still supports a temporary general sales-taxe increase and the House does not.

It has been reported that policymakers from both chambers agree on more than they disagree, such as closing tax loopholes and raising the cigarette tax. In addition, there is agreement on the expenditure side to make hundreds of millions of dollars in cuts and use one-time fixes, such as federal aid and reserves, to bridge the gap until the 2011-13 biennium.

As for now, the bills needed to implement a 2010 supplemental operating budget, 2010 supplemental capital budget, and increase revenue remain where they were this weekend. In addition, the bills that Evergreen is tracking this special session also have not moved further in the process.

As the Legislature convened on Monday, hopes were that an agreement would be reached by Wednesday, March 24. Now as Wednesday approaches, it looks like perhaps adjournment will have to wait either until the weekend (optimistic) or next week (reality).

What and Where are the Bills of Special Session

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The Governor, the Senate and the House all stated that the focus of the first special session of 2010 would be budgets, revenue, and job creation. While it is clear that the bills that would implement the 2010 supplemental operating and capital budgets and any revenue increases are necessary, several other bills are also required to pass to implement the budget and revenue proposals of the Legislature.

Bills, referred in the political arena as NTIB (Necessary to implement the budget), are widely defined. Many are deemed NTIB because they allow for implementation of budget policies, create cost savings, and/or are take home bills for policymakers.

During this first week of the first special session of 2010 several bills have been reintroduced that did not pass the Legislature prior to adjournment of the regular session.

A summary of the five bills Evergreen is tracking through the course of the special session are below.

House Bill 2561

 House Bill 2561 authorizes the State Finance Committee to issue $861 million in general obligation bonds, to be known as Jobs Act Bonds (Act), for the purpose of creating jobs by constructing capital improvements that lead to energy-related cost savings in public schools, state colleges and universities, and other public facilities. Public schools, colleges and universities and other public facilities would compete for funds in two rounds of competitive grant funding for the dollars according to criteria laid out in the bill. The first round is dedicated solely to education and higher education.

House Bill 2561 has been referred to in the media as one of the vehicles that the Legislature may consider as part of its job creation efforts in the special session.

HB 2561 passed the House 54-39 on the second day of the special session and awaits further action in the Senate Ways & Means Committee.

House Bill 2854

House Bill 2854 determines student eligibility for the Higher Education Loan Program (HELP). To be eligible a student is defined as one that: (1) has an annual family income, adjusted for family size, that is no greater than 130 percent of the Washington median family income; (2) has completed the free application for federal student aid; (3) is a Washington resident; (4) is not enrolled in Theology as a field of study; (5) is enrolled at least half-time in a first-aid-eligible certificate or degree program up to and including graduate and professional degrees; (6) maintains satisfactory academic progress as determined by the attending institution; (7) is not delinquent or in default on a federal or state student loan; and (8) is not past due in child-support obligations.

The bill also establishes a limit on the loan amount granted per academic year is established as the cost of attendance minus any other student financial aid received.

HB 2854 passed the House 58-35 on the second day of the special session. A public hearing on the bill was held in Senate Ways & Means Committee on March 17.

House Bill 3193

House Bill 3193 reduces the bonus for National Board-certified teachers teaching in high poverty schools from $5,000 to $2,500 during the 2010-11 school year.  In addition, persons receiving the National Board bonus are required to be in “instructional assignments” in a Washington public school.

HB 3193 awaits further action on the House floor.

SB 6409

Senate Bill 6409 creates the Washington Opportunity Pathways Account. Beginning in state fiscal year 2011, all net revenues from in-state lottery games that are not otherwise dedicated to debt service on the Safeco Stadium and Qwest Field and Exhibition Center are dedicated to the new account. All net income from the multi-state lottery games, other than those dedicated to the Problem Gambling Account, are deposited into the Washington Opportunity Pathways Account rather than into the General Fund.

The Washington Opportunity Pathways Account is subject to appropriation by the Legislature, and may only be used for the following programs: recruitment of entrepreneurial researchers, innovation partnership zones, and research teams; the early childhood education and assistance program (ECEAP); the State Need Grant; the State Work Study program; College Bound Scholarships; Washington Promise Scholarships; Washington Scholars; the Washington Award for Vocational Excellence (WAVE); the Passport to College Promise; the Educational Opportunity Grant; and GET Ready for Math & Science Scholarships.

SB 6409 passed the Senate  32-10 on the second day of the special session and awaits further action on the House floor.

SB 6503

Senate Bill 6503 as passed by the Senate on March 16 expresses the intention of the Legislature that state agenices and institutions of higher education reduce government operating costs. In doing so agencies and institutions of higher education are required to preserve family wage jobs. The bill further requires the following:

  • The Office of Financial Management (OFM) certify to each state agency the compensation reduction amount to be achieved by the executive branch agency or institution as provided in the omnibus appropriations act.
  • Executive branch general government state agencies and higher education institutions may submit plans that achieve compensation cost savings to OFM. The State Board for Community and Technical Colleges shall submit a single plan on behalf of all community colleges.
  • Compensation reduction plans submitted by higher education institutions may include leave without pay, temporary layoffs, reductions in force, reduced work hours, and voluntary retirement, separation, and other incentive programs authorized by law.
  • OFM shall review, approve, and submit the higher education institution plans that achieve the required cost reductions to the legislative fiscal committees. Those institutions that do not have approved plans will close on the ten dates specified in the amendment.
  • Legislative branch agency plans for mandatory and voluntary leave will achieve savings as provided in the omnibus appropriations act and are subject to the approval of the Chief Clerk of the House of Representatives and the Secretary of the Senate.
  • Judicial branch agencies will similarly submit plans for review and approval by the Supreme Court. Agency closure days will not prevent actions from being considered timely on the next business day.
  • Specified activities of agencies and institutions are exempt from closure or reductions. Minimal use of state employees by any agency or institution is permitted as necessary to protect public assets, protect information technology systems, and maintain public safety. For higher education classroom instruction, operations not funded from state funds or tuition, campus police and security, emergency management and response, and student health care are exempt.
  • The agency employing an employee not scheduled to work on an agency closure day must designate an alternative day during the same month for the employee to take temporary leave without pay.
  • Employees earning less than $30,000 per year may use annual leave or shared leave in lieu of a temporary layoff.
  • Implementation subject to bargaining will be performed consistent with applicable laws.
  • For state agencies, temporary layoff impacts will be negotiated between each agency and one coalition of all exclusive bargaining representatives.
  • For higher education institutions that have negotiations conducted by the Governor or Governor’s designee, and that have submitted a reduction plan, negotiations regarding impacts shall be conducted between coalitions of representatives at each college, college district, or university of all the exclusive representatives.
  • For institutions that do not submit aplan, negotiations regarding impacts shall be conducted between the Governor or Governor’s designee and one coalition of all the exclusive bargaining representatives. Institutions that do not have negotiations conducted by the Governor or Governor’s designee shall each negotiate institutional impacts.
  • An exception to the requirement that agencies remain open 40 hours per week is provided.
  • In addition to the Public Employees Retirement System provisions in current law eliminating the effect of temporary salary reductions on pension calculations (chapter 430, Laws of 2009), members of the Teachers’ Retirement System, the Public Safety Employees’ Retirement System, the Law Enforcement Officers’ and Firefighters’ Retirement System and the Washington State Patrol Retirement System will not have pension calculations reduced for salary not earned as a result of compensation reductions integral to expenditure reduction efforts.
  • The act contains an emergency clause and takes effect immediately. 

Senate Bill was further amended on the Senate floor to:

  • Direct that state agencies and institutions reduce expenditures on salaries and benefits for Washington Management Service and exempt management positions by amounts provided in the omnibus appropriations act. The reductions shall be sufficient to save $10 million General Fund-State in Fiscal Year 2011
  • In higher education institutions, the amendment exempts student employees from the compensation reduction plans and the agency closure dates.

Budget and Revenue Bills Emerge as the One Week Anniversary of Special Session Nears

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The somewhat slow pace by which legislators hit the ground last Monday has been replaced by at least a jog as the one week timeline for the first special session of 2010 nears. 

Over the last few days the major pieces needed for the Legislature to adjourn and go home have emerged in the process. With that said, doubts remain whether the emergence of key revenue and budget bills in the last couple of days is enough to reach adjournment by Monday, the one week deadline many legislators set out to meet when the special session was convened.

The Senate passed their proposed 2010 supplemental operating budget on the first day of the special session. Since then proposals on the $30.6 billion operating budget have been exchanged between the House and Senate in search of a compromise.  For the moment, however, the bill (ESSB 6444) awaits further consideration on the House floor. 

Yesterday, the House passed their proposed 2010 supplemental capital budget. Not much negotiation has taken place with regard to the capital budget. Leaders on the capital buget continue to wait for decisions on revenue and operating dollars to determine how much money is available for capital. The bill (ESHB 2836) awaits further consideration in the Senate Ways & Means Committee.

Also yesterday, the Senate passed, 25-18, a revenue generating bill (SESSB 6143) which is half of a two bill revenue package that would raise $809 million through June 30, 2011.  The bill is the same as the revenue bill passed by the Senate in the regular session except for two changes. The first is a reduction in a sales tax increase from a three-tenths proposed increased to two-tenths. In addition, under the revised version, realtors, research and development businesses, and nonprofit and public hospitals would not be affected by the surcharge.

Other than these changes, the bill remains the same as the original bill.  The revised bill : (1) closes dozens of tax loopholes, (2) extends the sales tax to bottled water for three years, and (3) increases the occupation tax on service businesses by one-quarter of 1 percent for three years each. Finally, the bill doubles the small business tax credit permanently for service businesses and funds the implementation of the Working Families Tax Rebate. Low-income families would start receiving checks in 2012.

The Senate’s two-bill revenue package also includes Senate Bill 6874 to increase state cigarette taxes by $1 per pack. SB 6874  still needs to be approved by the full Senate.

Today, the House passed a revised version of SESSB 6143 with a vote of 53-42. 

The revised bill passed by the House is a plan that was offerd by Governor Gregorie as a compromise between the differing House and Senate proposals. The plan would generate nearly $800 million in new revenue without a sales tax increase. Instead the plan, which includes elements from the Senate and the House proposals,  is a temporary business-and-occupations tax surcharge of 0.25 percent on some service businesses.  Finally, the plan would close tax loopholes, extend the sales tax to bottled water, and overhaul the way taxes are charged to out-of-state businesses.  The Senate and House continue to remain divided on the implementation of a sales tax, with the Senate favoring a sales taxes increase and the House opposing an increase.

Like the Senate, the House’s proposal consists of a two-bill revenue package. House Bill 2493 , like SB 6874, raises state cigarette taxes by $1 per pack and increases taxes on other tobacco products. Yesterday, the House passed HB 2493 witha  vote of 54-42. The bill now awaits further consideration on the Senate floor.

 

Special Session: Day 2

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The second day of the first 2010 special session was much more alive, actually feeling a bit like a regular session. A handful of committees held work sessions on various topics of interest and both the House and the Senate spent serious time on the floor considering legislation.

The Senate took action on eight bills today before they adjourned until 10:00 a.m. tomorrow. Of the eight bills, two are of particular interest to Evergreen.

The Senate reintroduced and passed with a vote of 30-11 Engrossed Substitute Senate Bill 6503. ESSB 6503 is the compension reduction savings bill that failed to pass the House in the regular session. The bill, which passed with a vote of 32-10 directs state agencies, including higher education institutions to achieve a $69.2 million reduction in employee compensation costs from the near General Fund through mandatory and voluntary compensation reduction activities (i.e. furloughs, leave without pay, reduced work hours, voluntary retirements and separations, layoffs, and other methods).

The second bill, which passed 32-10, Engrossed Second Substitute Senate Bill 6409 creates the Opportunity Pathways Account. Beginning in state fiscal year 2011, all net revenues from in-state lotterygames that are not otherwise dedicated to debt service on the Safeco Stadium and QwestField and Exhibition Center are dedicated to the Opportunity Pathways Account. All net income from the multi-state lottery games, other than those dedicated to the Problem Gambling Account, are deposited into the Washington Opportunity Pathways Account rather than into the General Fund.

The Washington Opportunity Pathways Account is subject to appropriation by the Legislature, and may only be used for the following programs: recruitment of entrepreneurial researchers, innovation partnership zones, and research teams; the early childhood education and assistance program (ECEAP); the State Need Grant; the State Work Study program; College Bound Scholarships; Washington Promise Scholarships; Washington Scholars; the Washington Award for Vocational Excellence (WAVE); the Passport to

College Promise; the Educational Opportunity Grant; and GET Ready for Math & Science Scholarships.

The House took action on 14 bills prior to adjourning until 10:00 a.m. tomorrow. Of the 14 bills passed two were of interest to Evergreen.

Engrossed House Bill 2561 authorizes the State Finance Committee to issue $861 million in general obligation bonds, to be known as Jobs Act Bonds (Act), for the purpose of creating jobs by constructing capital improvements that lead to energy-related cost savings in public schools, state colleges and universities, and other public facilities. As reported earlier through this blog, EHB 2561 passed with a close vote of 54-39.

Second Substitute House Bill 2854, which passed 58-35, creates the Higher Education Loan Program (HELP).

Finally, today, the Senate’s proposed 2010 supplemental operating budget was placed on the second reading calendar on the House floor.

Representative Dunshee’s Jobs Bill Passes House After Contentious Debate

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A bill that proposed the creation of jobs by issuing bonds for energy savings and repairs to educational institutions’ buildings endured an intense debate on the House floor before being passed with a vote of 54 yeas, 39 nays and 5 excused.

The bill would create an estimated 30,000 jobs and increase the state’s debt limit by 1.7%. $861 million will be appropriated, around $200 million of which withiin the House Capital Budget for K-12 schools. Opponents of the bill pointed to the speculative nature of the increase in debt and the theoretical, not concrete, jobs that are forecast to be created. They also cited the short-term nature of potential jobs, given the relatively small amount of money appropriated per forecast position.

Supporters countered these arguments by calling the bill a gesture of responsible leadership and claiming that the debt limit increase was not substantial enough to justify alarm. They also expressed their concern for the condition of school buildings, many of which have leaking roofs, missing ceiling tiles, poor insulation and old windows. By invoking the paramount duty of the legislature to provide access to all of Washington’s children to education, several of those speaking in support sought to tie the jobs bill directly to issues regarding funding for K-12 education.

Governor Convenes Special Session Beginning Monday

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This evening the Washington State Legislature adjourned the regular 2010 supplemental session. Shortly thereafter, Governor Gregoire signed a proclamation to convene a special session of the Legislature beginning Monday, March 15th.

The Governor asked Senate and House leadership to focus on reaching a compromise budget and revenue package to close the state’s $2.8 billion gap, as well as legislation to create jobs.

Gregoire is urging the House and Senate to complete their work in a seven day session. The overtime period can run up to 30 days.

Legislature Adjourns 2010 Session; Special Session Announcement Expected

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At 8:40 p.m. the Washinton State Legislature adjourned the regular 2010 supplemental legislative session. The Legislature worked tireslessly through the evening to pass several major policy bills prior to adjournment, including major K-12 reform legislation. 

Despite the difficult and hard work by the Legislature to take action on several critical policy bills, the Legislature did not pass a supplemental operating budget or revenue legislation prior to adjournment this evening.  The Legislature also did not pass a supplemental capital budget. In fact neither the House nor the Senate passed their proposed supplemental capital bugets off their respective floors by sine die.

An annoucement regarding the timing and focus of a special session is expected.