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Published on Monday, February 29, 2016

State operating budget recap and what’s at risk for cities

Last week was all about supplemental budgets, and the programs and revenue that cities rely on are at risk. Here’s a recap of what happened with the proposed supplemental operating budgets.

By tradition, the House was up first this year. House Democrats released their proposed supplemental operating budget on Monday, February 24, and passed it on a party-line vote a few days later. AWC was pleased that the proposal did not include cuts to revenues shared with cities. More about the proposal is posted here.

On Wednesday, February 26, the Senate Republicans released their proposal and passed it on a party-line vote Friday afternoon. AWC remains very concerned about several items. This includes:

  • Eliminating funding for the Municipal Research & Services Center beginning July 1, 2016. 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. This represents 90% of MRSC’s funding. More
  • Eliminating the Fire Insurance Premium Tax shared with cities. This fund helps 44 cities meet their obligations for the Law Enforcement Officers' and Fire Fighters' Plan 1 (LEOFF 1) retirement and medical benefits. More
  • Substantially raising the direct cost to many cities for sending officers to the Basic Law Enforcement Academy. The proposal would double or triple the direct cost for some cities to send cadets to the Basic Law Enforcement Training Academy. More
  • Merging 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 the redirection of retirement contributions made by cities and is concerned that this merger could destabilize the LEOFF 1 retirement fund, which could result in unfunded liability for cities.

Prior to the vote on the Senate floor, the Senate Ways & Means Committee considered amendments to restore MRSC’s funding and remove the section that merges the LEOFF 1 and TRS 1 retirement systems. Neither amendment was adopted.

AWC’s side by side comparison of the supplemental budget proposals is available here.

Now the House and Senate budget negotiators will need to reach agreement on what to include in the final supplemental budget. AWC will continue to advocate for the programs and revenue our cities rely on, but legislators need to hear from you too. Please take a few minutes to let your legislators know how these cuts would impact our communities.

Categories: Budget & finance