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Published on Friday, February 26, 2016

House and Senate capital budgets address MTCA shortfall differently

House Democrats and Senate Republicans both released their proposed supplemental capital budgets on February 24. As we have previously written, with many cities’ projects potentially on the chopping block, we were waiting to see how these proposals would address a $100 million revenue shortfall in the Model Toxics Control Account (MTCA).

Somewhat surprisingly, the House proposal is entirely silent on how to address the MTCA revenue shortfall. We believe this means that Ecology would manage this downfall in revenues, first by delaying cleanup projects, and then by delaying other capital projects.

The Senate proposes specific cuts to various appropriations and programs including:

  • $39.1 million in stormwater project grants;
  • $2.9 million in stormwater capacity grants;
  • $17.5 million for toxic cleanups (primarily Puget Sound and Eastern WA Clean Sites programs); and
  • $0.9 million in Shoreline Management grants.

Given these specific cuts it’s still difficult to determine exactly which projects would be affected. We were concerned that the Senate would take even more funding out of the stormwater assistance for local governments, so we’re somewhat encouraged that they took a more balanced approach.

In order to pass a supplemental capital budget, the two houses will need to find an approach that works for both chambers. We expect them to reach an agreement, but the ultimate outcome is unclear.

The collapse in MTCA revenues, due almost entirely to the decline in oil prices, has greatly reduced the state’s ability to fund a number of important programs that provide grants and direct assistance to cities. Without a significant rebound in oil prices or a willingness by the Legislature to find new revenues, (always a tough battle) the outlook for returning to previous MTCA funding levels is not encouraging.