OLYMPIA — Voters in Washington have been asked to approve a constitutional amendment that would require the Legislature to store extra cash in years when there is extraordinary revenue growth.
The resolution on the ballot in November is designed to provide more budget stability, so that spending doesn’t increase too much during economic growth or face steep cuts when revenues decline. Lawmakers passed the measure by a wide margin with support from Democratic and Republican leadership along with State Treasurer James McIntire.
Sen. Joe Zarelli, R-Ridgefield, said the measure represents a lesson learned of this decade. He said the state would be in far better shape if the rules had been in place in years past, when revenues were on the rise before the recession triggered a decline.
“By putting some of that away, we would have kept our spending more in control and we would have been able to handle the downturn,” Zarelli said.
Extraordinary revenue growth is defined under the initiative as growth that is one-third greater than the average over the past decade. The Legislature would have to set aside three-quarters of the extraordinary revenue, unless employment growth grew by less than one percent per year over the previous budget cycle.
The Legislature can withdraw the money in a year in which employment growth is projected to be less than 1 percent, or if the account has grown to exceed 10 percent of revenues for the year, or during a state of emergency in response to a catastrophic event. Otherwise, lawmakers need a three-fifths majority to withdraw money.
This year, lawmakers have already cut teacher salaries and made other spending reductions in order to bring spending in line with now-weak revenues. Gov. Chris Gregoire has asked agencies to prepare for even deeper cuts, with departments suggesting that it could lead to early release of many prisoners, the end of most substance abuse treatment and more teacher salary reductions.
A small group of Democratic lawmakers have opposed the budget resolution on the ballot, saying it will leave people paying for taxes and getting nothing but a bigger savings account. They also point out that the state already saves money in a rainy day fund.
Jeff Johnson, president of the Washington State Labor Council, said the initiative would unnecessarily tie the hands of lawmakers when they may want to spend more on teachers or public safety. He said lawmakers also need to be able to tap every available resource when it comes to helping spur the economy.
“It seems to be irresponsible,” Johnson said.
In another resolution before voters, lawmakers seek to fix conflicting voter residency requirements in the state Constitution. The measure passed the Legislature unanimously and has drawn no formal opposition.
The state would continue to abide by current rules, which allow eligible citizens to vote if they’ve lived in the state for 30 days before the election.
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