Municipal Finance

Revenues for Public Safety (ESSB 6573)

Thank you to city officials who called their Representatives last week to support this important AWC legislative priority bill. Thanks also to Rep. Mark Ericks (D–Bothell) and Sen. Derek Kilmer (D–Gig Harbor) for their support of this bill. ESSB 6573 was amended in the House (82-12) on March 7 and then concurred by the Senate on March 11 (45-2).

As noted in previous Legislative Bulletins, this bill will provide funds for cities based on their share of LEOFF 2 employees for criminal justice, public safety and information and assistance to parents and families dealing with at-risk or runaway youth. Appropriations will begin in 2011 with $5 million for the biennium, increasing to a maximum of $50 million by 2017 and for future biennia. The first distribution to cities and counties will be made in January of 2012.

Supplemental Operating Budget (ESHB 2687)

The House and Senate conference committee released their proposed budget on March 12 and the Legislature adopted the budget on March 13, the last day of session.

The budget as it passed the Legislature doesn’t vary significantly from the House or Senate proposals. The supplemental budget approves an additional $230 million in general fund spending and places $835 million in reserve.

Some highlights for cities include:

• $1.18 million for 2SHB 2712, concerning criminal street gangs;
• $40,000 for a study to identify issues related to funding LEOFF Plan 1 retiree medical benefits; and
• $2.46 million for climate change and green collar jobs.

For more information about the Capital and Transportation budgets, see the section on Infrastructure, Transportation & Economic Development. More detail about how the supplemental budgets impact cities can be found on AWC’s website, www.awcnet.org.

Addressing Liquor Laws (SCR 8407)

This resolution was introduced during the 2007 legislative session and hadn’t moved this session until March 10. It will create a joint select committee on beer and wine regulation to review laws dealing with the sale and manufacturing of beer and wine. SCR 8407 passed the Senate (32-17) on March 11 and the House (70-27) on March 12. AWC tracked this resolution and will follow the work of the select committee given the distribution of Liquor Board profits to cities.

Streamlined Sales Tax & Business Licenses (SHB 3126)

AWC worked with the business community on this bill to clarify that registration or compliance with the streamlined sales tax agreement does not by itself subject a business to business license or tax requirements. SHB 3126 passed on March 7 and has been delivered to the Governor.

Additional Business Assistance for SST Implementation (SHB 2380)

SHB 2380, which would have expanded the tax credits provided to assist businesses to adopt destination sourcing accurately and on-time, did not pass the Senate before the Legislature adjourned. AWC supported additional tools to assist with business compliance. We believe the bill died due to its fiscal impact on the State.

City B&O Tax-Related Legislation Does Not Pass (HB 3244, HB 2965)

As previously reported, HB 3244 and HB 2965 did not pass out of their original house fiscal committee, and no further action occurred on these bills. HB 3244 would have imposed a three part definition for customer location. AWC opposed this significant change in tax policy for determining where to apportion service income under RCW 35.102.130, which went into effect in January 2008. Customer location is one of three options to determine the service-income factor required for the two-factor formula for apportionment of service income for B&O purposes.

HB 2965 would have required the Department of Revenue to complete a study on state administration and collection of city B&O taxes by December 2008.

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