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Published on Friday, July 12, 2013

Public Works Assistance Account funds swept up in budget deal

The big infrastructure story of the 2013 legislative session came to an unhappy ending when legislators finally reached a deal on the operating budget that included the transfer of significant revenues from the capital budget. Most notably, they transferred all available funds from the Public Works Assistance Account (PWAA, also commonly referred to as the Public Works Trust Fund) and directed most of the future tax revenues for the PWAA into K-12 education for the next six years. As a result, the 66 cities that had been expecting loans from the 2014 loan list were left high and dry, and going forward the funds available for loans through the Public Works Board will be much reduced.

Even before the 2013 legislative session started, AWC knew that PWAA revenues could be used to help the legislature solve their operating budget and K-12 education funding problems, and we began communicating with legislators and our members about protecting this important infrastructure funding tool. As the initial budget proposals from the Governor and both chambers rolled out, our concerns were heightened, but we remained optimistic as each proposed to transfer some, but not all, of the PWAA revenues. In the end, as legislators were staring down an unprecedented government shutdown if they failed to reach agreement, the PWAA revenues became a big piece of the revenues used to close the deal on a budget, even after strong opposition from AWC and a coalition of other interests, as well as reluctance from a number of legislators.

AWC was extremely disappointed in this outcome, but we have already begun to look forward. We have started work on developing a strategy on future infrastructure funding. We’ll report on those efforts and seek your input over the coming months.

Other capital budget highlights

For a quick overview of the Capital Budget refer to our budget matrix. Note that not all of the infrastructure news was bad as the budget includes $100 million in assistance to local governments for managing stormwater (more details here).

Even though the revenues for the Public Works Assistance Account were swept and no loans will be made in the 2013 – 15 biennium, the Capital Budget includes policy language affecting how the Public Works Board shall qualify and rank projects for funding in the future, including the following:

To qualify for financial assistance under this chapter the board must determine that a local government meets all of the following conditions:

  • The city or county must be imposing a tax under chapter 82.46 RCW at a rate of at least one-quarter of one percent (Real Estate Excise Tax);
  • The local government must have developed a capital facility plan; and
  • The local government must be using all local revenue sources which are reasonably available for funding public works, taking into consideration local employment and economic factors.

For all of the factors the Board is to consider, see section 7032 of the Capital Budget (ESSB 5035).

On a more positive note, the Capital Budget also establishes a new loan program under the Community Economic Revitalization Board (CERB). Based on the language in E2SHB 1648, section 1070 of the Capital Budget spells out the provisions of the new program which is aimed at “revitalizing existing retail, industrial, or commercial properties located within incorporated areas. These properties must have either been abandoned, or have more than seventy- five percent of their square footage vacant.”

Below is a summary of other infrastructure related bills we were following this session:

BillTracker AWC priority Bill # Descriptive title Final status
    SHB 1141 Establishing a water pollution control revolving loan administration charge Law; Effective date 7/28/2013
Other significant issue SHB 1466 Reauthorizing alternative public works contracting procedures Law; Effective date 6/30/2013
    HB 1025/SB 5395 Extending the application of prevailing wage requirements to all publicly subsidized work Failed
    SHB 1484 Modernizing the enabling statute of the Public Works Board Failed
Major E2SHB 1648 Establishing a loan program to revitalize existing retail, industrial, or commercial properties located within incorporated areas Failed, but included in final capital budget
    SB 5313 Requiring Public Works Board to consider low cost construction alternatives such as pipe bursting when ranking projects for funding Failed
    SB 5621 Requiring submittal of certified payroll records on public works projects Failed