Lawmakers explore state bonds as stimulus

OLYMPIA -- As federal dollars roll into Washington, the governor and key legislators may try to put a bond measure before voters that would pay for a state stimulus package.

Gov. Chris Gregoire said Monday she's "interested" and had conversations with lawmakers on the idea, stressing her motivation is to create jobs without undermining the state's tender fiscal condition and strong credit rating.

"I desperately want to put people back to work. I want to put an infusion of dollars into the system," she said.

She said she'd like to see projects like building schools and installing new technology. There's been no serious discussion of what projects and how to pay off the bonds.

"It's so premature," she answered in response to several questions from reporters trying to extract specifics at a news conference Monday.

This was the first time Gregoire spoke of asking voters for help in stimulating the economy during this recession.

She's veered clear of joining those Democrats who want to ask voters to consider a tax hike sometime this year in hopes of preserving programs that might be cut because of the projected $8.5 billion deficit in the next state budget.

"You can't get out of here without a balanced budget, period. And that means you don't assume new revenue," Gregoire said.

A bond is another story. No proceeds of a bond sale would go toward filling the budget shortfall. That may make it an easier sell to voters who want to create jobs rather than protect government programs.

By speaking Monday, it seemed Gregoire wanted to not only flush the idea into the public eye but also amplify a conversation going on quietly among a very small number of lawmakers.

One of those, Rep. Hans Dunshee, D-Snohomish, smiled firmly when told of the governor's comments.

"I've been working on some ideas," said Dunshee, who is chairman of the House Capital Budget Committee. "I wasn't intending to do anything until all the budgets come out later."

Dunshee said he's looking at projects like constructing and upgrading elementary and secondary schools. Also on his mind are installing equipment to reduce water polution and making state buildings fully energy efficient. He's not settled on a means to pay off the bonds.

As far as the electorate's willingness to open up their wallets, he said, "I think the voters are smart and they can make the judgment. I trust them."

The subject of a bond measure came up when Gregoire met last with the Legislature's chief budget writers, Sen. Margarita Prentice, D-Renton, and Rep. Kelli Linville, D-Bellingham.

"We had a small conversation with her. I haven't brought it back to my caucus," Prentice said.

She, too, said no specifics were discussed. It was tossed out as a possible idea for giving the state's economy a little jolt and the jobless a little joy.

Prentice emphasized any chance of passage required a proposal be "well-crafted" so voters could see the bond would produce "real results."

A simple majority of voters is needed to pass a bond measure.

The state sells bonds to pay for transportation and capital projects and pays them off with gas tax and general-fund revenues, respectively. There is a limit, or capacity, to how much bonding the state can do within its existing budgets.

However, voter-approved bonds are not counted against those limits. Legislators can raise as much money as they want and choose any means of paying them off. The risk is whether they design a measure that will attract bond buyers.

Gregoire did talk with state Treasurer Jim McIntire about the idea. More conversations are expected.

McIntire does think the idea is "worth vetting," department spokesman Chris McGann said.

It's not about how much money is raised but ensuring those dollars are useful and not simply make-work projects, he said.

"They need to figure out what they're going to spend it on and if it is a good long-term investment for the state," he said.



Jerry Cornfield: 360-352-8623, jcornfield@heraldnet.com.