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Published on Monday, March 14, 2016

Latest budget proposal sweeps more city revenue

On the first day of the special legislative session, Friday, March 11, the Senate released a revised supplemental operating budget proposal. The proposal does not require cities and counties to increase the amount they directly pay to send cadets to basic law enforcement training, nor does it rely on funding from a merger of the LEOFF 1 and TRS 1 retirement systems. However, the proposal continues to rely on cuts to several key city programs and revenue, including:

  • Diversion of $4.4 million in Fire Insurance Premium Taxes. This revenue currently is distributed to 44 cities and two fire districts to help fund their ongoing LEOFF 1 medical obligations. Under this proposal, the funds would divert to the state’s Disaster Response Account in FY 2017. The proposed budget also specifies an intent to continue diverting this revenue in the 2017-19 biennium as it “investigates whether this distribution should continue or be modified or terminated.”
  • Sweeping $2.8 million of MRSC’s funding and backfilling it with local liquor revenue. Cities and counties already fund MRSC through their liquor revenue. Under current law, MRSC is funded at $5.6 million per biennium through city liquor profits and county liquor taxes. The Senate's current budget proposal sweeps MRSC funding for FY 2017 ($2.8 million) into the state general fund and decreases city and county liquor revenue by the same amount to fund MRSC. In addition, if the Senate budget proposal is adopted, the Legislature would cease funding MRSC in the 2017-2019 biennium "as it investigates whether contracts for such services should continue or be modified or terminated.”
  • Effectively eliminates the Public Works Trust Fund. The proposal takes an additional $154 million in local repayments due in the next biennium and diverts it to the state general fund. Coupled with the diversion of tax revenues since 2013, this proposal would sweep resources now and into the next biennium. More information and what you can do is posted here.

House and Senate negotiators continue to seek an agreement on how to fund the state for the second year of the biennium. That agreement could come in a few days, or it could take much longer. As they negotiate, please contact your legislators and help us maintain these critical programs and revenues.

The original version of this article misprinted that the Fire Insurance Premium Tax diversion was $44.4 million, it has been corrected to the amount of $4.4 million.

Categories: Budget & finance