Special session comes to a close

The Legislature adjourned the special session at 1:10 am on April 13, approving a supplemental operating and capital budget along with a revenue package that includes increased taxes on bottled water, soda, candy, cigarettes and mass-produced beer in order to fill a $2.8 B budget deficit.

Their solution includes:

• Increased revenue – $757 M
• Spending reductions – $840 M
• Increased federal funds – $633 M
• Use of other funds – $328 M
• Use of reserves – $256

A draft fiscal note from the Department of Revenue for E2SSB 6143 indicates that local governments will gain over $28.2 M in FY 2011 from the revenue package. The revenue comes from:

• Tax avoidance transactions (Part II) – $2.8 M
• Livestock nutrients (Part VI) – $395,000
• Repealing the sales & use tax exemptions for bottled water and candy (Part IX) – $23.7 M
• PUD privilege tax clarification (Part X) – $1.3 M

Total revenue impacts to local governments through FY 2015 are estimated as follows:

• FY 2010 –- $220,000
• FY 2011 – $28.2 M
• FY 2012 – $30.3 M
• FY 2013 – $33.0 M
• FY 2014 – $9.4 M
• FY 2015 – 9.8 M

The operating budget (ESSB 6444), approved by the Legislature on April 12 and delivered to the Governor for her signature, is very good to cities with direct allocations including current state-shared revenues. However, even with new revenue noted above, cities face significant indirect negative impacts given the cuts to many human services programs. Law enforcement officials and many others noted these cuts will produce a greater burden on the local public safety systems and that many individuals will seek additional assistance from their city.

Highlights from the capital budget (ESSB 2836) include over $50 M in grants to local governments for stormwater retrofits and low impact developments (see below for more details on stormwater funding).

Our budget comparison matrix highlights more specifics—we’ll update this matrix frequently as more information becomes available.

For a complete review of the 2010 legislative session, watch for AWC’s Final Legislative Bulletin coming to your email box in May.

Stormwater funding bills fail to pass - Instead, over $50 M for grants placed in the capital budget.

In the final days, as the special session was winding down, proponents of bills to establish a dedicated stormwater funding source felt that time had run out. All session long, we sought support for a dedicated fund. An increase in the existing Hazardous Substances Tax was viewed as the most appropriate source. Opposition from refineries was constant and by mid-March, proponents were still a few votes short of insuring passage in both the House and Senate.

While we failed to pass a stable and dedicated funding source, our message got through. One hundred cities and 15 counties required to address stormwater requirements need help meeting the challenge, and local residents and businesses should not shoulder all of the costs. On the final day of the special session, in the final hours, the capital budget negotiators unveiled their agreed upon budget. It contains, among other provisions:

• $8 million in grants to support local stormwater staffing needs (approximately $70,000 per applicable jurisdiction)
• $40 million (approximately) in additional grants to help meet permit obligations and for additional stormwater projects or programs
• $1.3 million for a low-impact development demonstration grant to Bremerton

It also appears to contain more funds to support local toxic site clean-ups. Reduced last session, these clean-up funds are partially restored this year.

All of this is good news. Although the funding is only for one year, it provides AWC and other bill proponents a unique opportunity to demonstrate the ongoing need for these funds. We are already working with the appropriate staff at the Department of Ecology to help craft a grant program that is timely, responsive and responsible.

We thank the numerous city officials who worked hard to help communicate their needs to legislators. Special thanks to legislators who stuck with us and secured funds at least through June 2011 to help meet local challenges. We are still not quite sure who all of these legislators are, so rather than thank an incomplete list, we will wait until we know more.

In the weeks ahead we will update you about the grant programs.

Jobs act bill (EHB 2561)

Funding is provided to create jobs through energy efficiency improvements in public facilities. The bill authorizes the State Finance Committee to issue $505 M in general obligation bonds. Initially the bill included grants for public K-12 schools, public higher education institutions, state and locally-owned public facilities, and facilities owned by subdivisions of the state. Grant awards to local governments would not have been made available until subsequent rounds. However, when the bonds were reduced from $861 to $505 local governments were stripped out of the striking amendment. The striking amendment was passed on the final day.

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