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Published on Wednesday, May 20, 2015

Prolonged special legislative session puts city revenues at heightened risk

This week, your Legislative Bulletin contains just one article because there’s not much progress to report, and that means trouble. AWC’s efforts to maintain critical shared revenues, preserve a viable Public Works Trust Fund, obtain a long-term commitment to share new marijuana tax revenues, and adopt a comprehensive transportation package all hinge on legislators and the Governor coming to agreement on the state’s operating budget.

On Monday, the Washington State Economic and Revenue Forecast Council released their quarterly revenue forecast, and estimated revenue collections for the next two-year state budget have increased by nearly $309 million. In addition, the Council increased the state’s revenue forecast for the current biennium (2013–15) by about $109 million. This quarterly estimate is a critical piece of information in the 2015–17 budget process and was released one month ahead of schedule to help legislators complete their work.

The Legislature is two-thirds through their first special session, and in spite of ongoing discussions and the new forecast information, reports indicate they are nowhere near close to agreement on a final operating budget, critical transportation package, or capital budget. A second 30-day special session is almost certain. This would press them perilously close to the start of the new fiscal year, July 1, when a budget must be adopted or Washington State risks a government shutdown.

The longer it takes to reach agreement, the greater the chances are last minute deals will be struck that shuffle resources away from some city programs or allocations to fund higher state priorities. This scenario played out in 2013 when a divided legislature (just like this one) and Governor Inslee came within two days of missing the July 1 deadline to adopt budgets. A late night, last minute deal allowing bleary-eyed legislators to go home included finding an additional $1 billion in revenue for K-12 education. $300 million of that came from sweeping projects from the Public Works Trust Fund and cutting local liquor tax distributions in half.

Cities and others don’t want this same scenario to play out in 2015. Take a look at this simple chart describing how existing public budget proposals from the Governor, Senate Republicans, and House Democrats treat cities. Keep in mind, these are proposals dating back as far as December and everything is a moving target. Note that both the Governor’s and House Democrat’s proposals include more significant new revenues than the Senate Republican’s budget does. How cities fare in the end depends on what revenues are available and which priorities are funded. If history is an indicator, critical city priorities such as sharing liquor taxes or providing Public Works Trust Fund loans for infrastructure projects will be overshadowed when it comes to funding court-ordered beds for the mentally ill or adequately funding K-12 education.

So, what’s at risk for your city, what are we doing to avoid this, and how can you help?

  1. Know what shared revenues are at risk for your own city by clicking here.
  2. AWC staff and others advocating for cities continue to meet with those legislators in and around Olympia to talk about the importance of addressing our priorities.
  3. Many legislators are staying home until there are deals to consider and vote on. With the clock ticking towards July 1, grabbing their attention over coffee or inviting them to City Hall to discuss your priorities is time well spent. For other tips, go here.
  4. If your legislators are ones who think there’s enough revenue coming in, ask them if your priorities will be funded without new revenues.
  5. If your legislators are ones who think new revenues are needed, ask them if your priorities will be funded with and without new revenues.

With your help, we’ve kept city priorities alive and under serious consideration up until this point. Keeping them front and center and off of the cutting room floor as session concludes requires our concerted efforts and attention.