OLYMPIA — Reluctant state lawmakers outlined a plan Wednesday that would provide a $42 million bailout package for a Wenatchee-area agency that’s nearing default on the city’s arena.
Rep. Mike Armstrong, R-Wenatchee, said he hopes the bill will be able to pass before a key bond payment is due next week. Lawmakers are returning to Olympia on Monday, when they are scheduled to give the measure a first committee hearing.
Some state leaders fear that a default will have a ripple effect on the state, making it more difficult for jurisdictions to raise money through bonds. Armstrong said he and other lawmakers do not like the plan but feel that it is necessary.
“It’s an ugly, ugly bill,” Armstrong said. “But we’re just out of options.”
The plan proposed by the state treasurer and sponsored by Armstrong would not use state money and would not affect current budget troubles. It would make the bond payment by using part of a cash buffer in an account that collects local sales and use taxes. Jurisdictions in the Wenatchee area would pay it back over time, and the bill would allow them to increase the sales tax there by .2 percent.
If the area doesn’t pay the state back, the state can begin withholding tax revenue, said Armstrong, a leading sponsor of the bill.
The problem has been developing for months, with the Greater Wenatchee Regional Events Center Public Facilities District unable to pay off short-term debt for the Town Toyota Center arena, a 4,300-seat facility completed in 2008 that hosts hockey games and other events. The city can’t legally issue new bonds without exceeding its debt capacity, according to a judge’s ruling, and local officials have been unable to figure out how to meet their obligations.
Gov. Chris Gregoire said she’s heard a degree of skepticism from lawmakers wondering why this happened, why Wenatchee isn’t bailing itself out and if this is going to set a precedent. She wasn’t sure if lawmakers would address the issue in time.
“It’s a pretty big order,” she said. “On the other hand, I don’t think it’s healthy to default, because I think the implications rest beyond this jurisdiction. I’m just very happy the treasurer has taken it on. I will weigh in when the time is right.”
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
