State 2009-11 budgets pass Legislature

(ESHB 1244, ESHB 1216)

During the last few days of the legislative session, the House and Senate agreed on operating, transportation and capital budgets.  All budgets have been sent to the Governor for her review and action.

 As stated in previous Legislative Bulletins, many of the major operating budget (ESHB 1244) resources important to cities remain intact for the 2009-11 biennium.  However, there will be significant secondary impacts given cities will be forced to deal with the state’s cuts to social and health services. In addition, city infrastructure funds were devastated in the capital budget (ESHB 1216).
 
Some of the key operating budget highlights include:

• An additional $10 million for the City-County Assistance Account – The real estate excise tax that funds this account has fallen significantly. The budget allots an additional $10 million to this account to assist small and low tax-base cities and counties.
• Full mitigation for streamlined sales tax - $65 million is allocated to fully mitigate the unintended revenue redistribution effects of the sourcing law changes as a result of streamlined sales tax.
• Continuation of important state-shared revenues – The Criminal Justice Assistance Account, the Liquor Excise Tax Account and the Liquor Revolving Account continue to be appropriated at levels similar or above previous years. An additional $18.7 million is to be distributed to local governments through the Liquor Revolving Account because of assumed additional liquor profits associated with additional store openings and store hours. 
• Maintenance of funding for local public health jurisdictions – Funding for local public health jurisdictions is provided at $80 million, reflecting a slight deduction from last biennium.
• A reduction in local government audit costs and in audit frequency for some local governments – During the next biennium the State Auditor is directed to reduce charges for audits performed on local governments and to conduct audits no more frequently than once every two years for local governments with annual general fund revenues of $10 million or less as long as there were no findings of impropriety within the last three years.

The state capital budget and the bonds to support it, passed at the 11th hour of the regular session. The capital budget largely reflects the original Senate proposal of partial replacement of the public works trust fund program with a temporary public works grant program. After accepting the grim reality that most capital programs were going to be reduced and most accounts were going to be swept into the operating budget, this was the best we could obtain. 

Key city components of the capital budget include:

• $70 million for the Washington Wildlife and Recreation Program;
• $10 million for Small Community Jobs - A new competitive grant program to be administered by the Public Works Board;
• $10 million for Urban Vitality - A new competitive grant program to be administered by the Public Works Board; and
• $6.2 million for the Community Economic Revitalization Board.

Check AWC’s website, www.awcnet.org/fiscalhealth, for an outline of city budget items.

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