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Published on Monday, April 21, 2014

2014 session was short and disappointing for cities, 2015 challenges loom large

Legislators accomplished their goal of finishing on time with only slight modifications needed to the $33.5 billion biennial operating budget adopted last year. Beyond that, some were proud of the fact that no new revenues or tax loophole closings were needed, while others bemoaned the fact that “holding the line” also meant agreement couldn’t be reached on a transportation funding package, a supplemental capital project list, or other issues of interest to one or another block of legislators or the Governor.

Little was accomplished that helps, or hurts, cities and towns.

AWC members and staff advocated for:

  • An incremental return of the city share of liquor profits that were capped in 2012;
  • Restoration of critical Public Works Assistance Account funding that was redirected to state general fund expenditures;
  • Passage of a transportation package that would provide needed state and local resources; and
  • Reconciling differences between access to medical and recreational marijuana, and a sharing of these new tax proceeds with cities and counties.

All but our liquor revenue priorities were considered, but none were addressed. Reasons vary, and ultimately, legislative leaders concluded that any available non-transportation revenue needed to pay for state, not city, programs and services – at least until they figure out in 2015 how to pay for the State Supreme Court ordered K-12 funding responsibilities (McCleary). On the issue of transportation funding, most legislators understand state needs and several acknowledge local needs. What they couldn’t agree upon was the appropriate balance of new revenues and reforms on how project dollars are spent.

We were more successful in convincing legislators that several bills harmful to cities shouldn’t move forward, and in some cases we were able to help modify bad ideas to ones less harmful.

When legislators return in January 2015, they will have to confront a number of fiscal and political challenges that will directly impact city revenues and responsibilities. It would be prudent to consider these when developing city budgets that rely on state funding, or when deciding which of your local legislators deserve your attention or support. Here are some keys things to remember as we look ahead to what happens next:

  • All 98 House members, and half of the 49 Senators are up for election in November, and the Governor will be halfway through his term.
  • Conventional wisdom assumes that the House Democrats will maintain their majority and the Senate is likely to remain under the control of the Majority Coalition (which currently consists of 24 Republicans and 2 Democrats). This assumption was shaken up with the recent surprise announcement by Coalition Leader Sen. Rodney Tom (D-Medina) that he will not seek re-election.
  • Whoever is in charge, they have to write and pass a two-year operating budget and the Governor must agree. He gets to release his ideas first in December, and AWC along with most other Olympia interests, will be working to have influence on what’s in it as he and his staff prepare their budget.
  • Among the known issues needing to be addressed, none looms larger than responding to the Court’s order in what’s known as the McCleary case. It requires the legislature to address the state’s fundamental responsibility to fully fund K-12 education to meet legislatively approved standards for among other things, class size. It will take multiple billions more than is currently allocated to do this on an ongoing basis. To agree on what’s needed and find the funding to do it will be a major challenge.

State revenues are slowing growing, but not enough to meet the State Supreme Court’s order and maintain other state-funded programs at current levels. We’ve witnessed the inability or unwillingness of legislators to expand their revenue base either by enacting new sources or closing tax breaks to increase revenues. Program cuts and efficiencies have been achieved, but not enough in the eyes of some. Instead, state budget gaps have been filled by unprecedented raids or swipes on revenues that have been historically used by cities to help build infrastructure and support critical general fund services in communities of all sizes and shapes across the state.

Even as the state continues to grow (mostly in cities), what cities need may fall on deaf ears unless we all work over the next months to educate the Governor, community leaders and local legislators/candidates on the critical needs for infrastructure, public safety and other fundamental needs in our communities. We will be competing for attention and funding, and must reach out to business, education and civic leaders to find ways to address their needs as well as ours.

In the coming weeks and months, be on the lookout for AWC initiatives on how you can help meet these challenges.