By Susanna Ray
Herald Writer
OLYMPIA — Washington led a group of states to victory in the 1998 national tobacco lawsuit settlement.
Now Senate Democrats want to follow other states in borrowing against that money to alleviate the ailing economy.
Ways and Means Chairwoman Sen. Lisa Brown, D-Spokane, gave reporters a preview Monday of the "highlights, or lowlights," of the state budget she wrote, with plans to release the full version today.
To fill a $1.6 billion budget hole, the state will need to take a number of drastic measures, she said.
Those include:
"There is no way to address a $1.6 billion problem without making decisions that are going to affect the lives of the people of Washington state, in some cases dramatically," Brown said.
It’s called "securitizing," and it’s quickly gaining popularity among cash-strapped states. Brown said six others have already done it, and 11 are considering it.
The plan would be to sell private investors about a quarter of the $4.5 billion Washington state is expected to get in annual installments from tobacco companies over the next 20 years, converting part of the funding stream into a lump-sum payment that could be used now.
Rep. Barry Sehlin, R-Oak Harbor, the House Republicans’ chief budget writer, said the move would sacrifice the future to get a short-term benefit.
"I’ve heard it referred to as ‘Enron budgeting,’ and I wouldn’t disagree with that," Sehlin said.
Other states "securitizing" their tobacco money are being penalized by at least 70 percent, he said, and most are only getting about a quarter for every dollar sold.
Brown acknowledged that her budget is a short-term solution to the crisis the state is facing. But it’s a solid plan in comparison to the alternatives, she said, which include cutting another half a billion dollars from state programs.
"This is a budget everybody hates," said Majority Leader Sen. Sid Snyder, D-Long Beach. "But there’s no other way out."
You can call Herald Writer Susanna Ray at 1-360-586-3803 or send e-mail to ray@heraldnet.com.
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