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Published on Wednesday, February 24, 2016

Cuts to city programs and revenue in Senate proposed budget

On Monday, the House released its proposed supplemental operating budget proposal. Today it was the Senate’s turn.

One of AWC’s priorities this year is to support strategies to help address the increase in homelessness and the demands on our mental health system. AWC appreciates the Senate’s commitment to investing in mental health and Consolidated Homeless Grants, which help secure permanent housing.

However, we are very concerned about several items in this budget proposal that would negatively impact cities. Specifically, the Senate’s proposal:

  • Eliminates funding for the Municipal Research & Services Center beginning July 1, 2016. MRSC has been serving local governments in Washington for over 80 years and is a lifeline for medium and small-sized cities and counties that could not afford to contract for this service otherwise. This service is made possible by pooling a small portion of the liquor taxes and revenues that would otherwise be distributed to cities and counties. Under the Senate’s proposal, the $2.6 million in funding for MRSC from the Liquor Revolving Fund would go to the state general fund instead. More
  • Eliminates the Fire Insurance Premium Tax. This fund helps 44 cities meet their obligations for the Law Enforcement Officers' and Fire Fighters' Plan 1 (LEOFF 1) retirement and medical benefits. The state created the LEOFF 1 system in 1969 and mandated cities with paid firefighters participate. Despite the closure of the LEOFF 1 system after a few years, the obligations for those who entered the system remain today. More
  • Substantially raises the direct cost to many cities for sending officers to the Basic Law Enforcement Academy. Cities and counties already pay for the Basic Law Enforcement Academy through traffic ticket revenue sent to the state, and for the past several years, the state has also directly charged jurisdictions 25% of the cost of training cadets. Under the Senate proposal, jurisdictions historically sending ten or more cadets to training would pay 75% of the direct cost, and jurisdictions historically sending six to nine cadets would pay 50%. Jurisdictions sending five or fewer cadets would continue paying 25% of the direct cost.
  • Merges the LEOFF 1 retirement system with the Washington Teachers' Retirement System Plan 1 (TRS 1). The proposal merges the assets and liabilities of the LEOFF 1 retirement system, which has a $1.1 billion surplus, with TRS 1, which has a $2.7 billion unfunded liability. AWC opposes this merger due to the possibility of destabilizing the LEOFF 1 retirement fund, which could result in unfunded liability for cities. In addition, we oppose the redirection of retirement contributions made by cities, especially when cities continue to bear substantial medical costs for LEOFF 1 retirees.

AWC will oppose these items in the proposal. If you share our concerns, we urge you to contact your Senator as soon as possible. The Senate is likely to act quickly on this budget proposal.

Categories: Budget & finance
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