Majority is using a "felony budget
gimmick," which the State Treasurer calls a "dangerous
precedent" and has urged the Legislature to reject.
BREAKING NEWS | March 7, 2018
Dear
Friends and Neighbors,
We received
some particularly alarming news late last night, when the Senate majority
unveiled a last-minute, secret plan to do an “end run” around the state constitution
in order to irresponsibly raid the state’s emergency rainy-day fund.
Although
state government expects to take in $2.3 billion in additional tax revenue, the
Senate Democrat majority is still looking to raid budget reserves using what
has been described as a “felony budget gimmick.” The proposed amendment to Senate
Bill 6614 violates the spirit and intent of voter-approved protections that
place extraordinary revenue growth into the budget stabilization account.
Voters in
every county approved a constitutional amendment (Senate Joint Resolution 8206)
in 2011, to protect extraordinary revenue during times of strong economic
growth. Using the money generally requires a 60 percent vote in the Legislature.
The
Democrats’ proposed amendment to the bill would get around this by funneling
$935 million in property tax revenues to the education legacy trust account.
Redirecting the funds lowers general-fund revenues, which circumvents the
spirit of the law by reducing the amount of money going into the rainy-day fund
by more than $700 million.
After the
majority’s plan became public our state treasurer, Duane Davidson, briefed our
caucus about the devastating impact such a move would have on the state’s bond
rating. He was outraged.
Just
moments ago, he released the following formal
comments:
“We’re extremely concerned with today’s proposals to divert $700 million from being deposited in
the Rainy Day Fund. Choosing to not save
today when we’re experiencing extraordinary revenue growth guarantees that our
budget problems will be much greater when the next recession hits.
…“It is very
short-sighted to seize $700 million in a diversionary raid on the Rainy Day
Fund as proposed. This is unacceptable.
…“Here in Washington we rarely think of looking to California as an
example of fiscal prudence. Governor
Jerry Brown and California propose adding over $5 billion to their own Rainy
Day Fund this year. Even California is
doing the right thing! We can too. We need to get serious about saving and we
need to keep building our Rainy Day Fund in this budget.
…“If the Legislature
chooses to ignore the will of the people and instead tap into what should be
Rainy Day Funds – then it should prioritize paying down debt. Our unfunded
pension liabilities are our most expensive debt. Washington State’s total
pension funding is at roughly 84% of its obligations.
…“If the Legislature shifts its rules to avoid filling the
Rainy Day Fund in the year ahead we weaken our financial position and disregard
the spirit of the Constitutional Amendment passed overwhelmingly by voters who
wanted to save extraordinary revenue. We also damage our well-deserved and
hard-won reputation for good fiscal management with bond rating agencies and
investors. Say 'no' to budget gimmicks. Raiding, or diverting, the Rainy Day Fund
for today’s desires is the opposite of good fiscal management. Don’t do
it.”
The
majority delayed a vote on the amendment until today, and indeed, it is being
debated at this very moment.
I will
keep you informed as things progress on this important issue.
Sincerely,
Senator
Mike Padden
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