Mid-session report from our city’s shared lobbiest in Olympia

WEEK 4 REPORT ON THE 2008 SESSION OF THE LEGISLATURE
FOR MAYOR, COUNCIL, DEPARTMENT HEADS, SENIOR STAFF
Doug Levy – 2/10/08

The budget cloud hanging over Olympia: There will be more than rain clouds hovering over Olympia this week. On Thursday, the Governor’s Office of Financial Management (OFM) will forward an updated revenue forecast for the state that is expected to be very gloomy.

Last week I was told by one legislator that it could show revenues down by as much as $400 million from current forecasts. Other legislators tell me that at this point, a $200 million reduction would be considered good news. The new revenue forecast will have a significant impact on legislative action on numerous bills and budget measures. The state’s revenue surplus entering the 2008 Session was about $1.4 billion, and the Governor urged lawmakers to leave the session with a surplus of $1.2 billion (her budget proposed $200 million in additional expenditure, primarily due to caseloads, keeping current programs intact, and a few select policy additions). As the Session has wound along, I have heard on several occasions that the “magic number” for a Session-ending surplus is $1 billion. A $200 million reduction in the revenue forecast leaves that $1 billion goal in sight – but if the number is more on the order of $400 million, count on key lawmakers to begin looking at how to cut existing budgetary programs, some of the Governor’s proposal, etc. And count on 2008 proposals that would add expenditures to the state to be very, very difficult to move.

With cutoffs – a Good Bill/Bad Bill/Dead Bill list is coming: The end of the day Friday was the deadline for policy bills to move out of their “house of origin” (House or Senate chamber) in order to remain alive. Bills that did not survive that cutoff are either dead for the session, or the provisions within them must be attached to some other ‘live’ legislation. By the end of the day Tuesday, bills will have to have passed out of fiscal committees to remain alive. Again, there are exceptions to the rule – for example, most tax bills will be held until after the deadline, with those that move being identified as “Necessary To Implement the Budget” (NTIB). Once the fiscal cutoff has passed, I will endeavor to forward to City Hall the usual “Good Bill/Bad Bill/’Dead’ Bill” list.

Report on the City’s Top 2008 Agenda Priority Issues

Infrastructure Funding: Right now, it looks as if status quo on infrastructure funding might be a good outcome for the 2008 Session. While we made repeated efforts to get SB 6856 scheduled for a hearing in the Ways & Means Committee, that has not yet happened. SB 6856, a top-priority cities’ bill, would inject $100 million in new funding into the base of the Public Works Trust Fund, along with establishing a $40 million competitive grant program to award infrastructure dollars to communities dealing with high-growth and large annexation demands. We knew passage of the legislation was a huge long-shot, but even getting a hearing on the measure has proved to be a challenge. Meanwhile, we are aligning with contractors, Realtors, counties and others to ward off HB 3264/SB 6853, legislation that would do two very problematic things to the Public Works Trust Fund: 1) authorize the Legislature to add categories to the fund through the Capital Budget – meaning a Fund with finite monies in it would have to take care of more categories of need, thereby diluting it; and 2) adding “fiscal health” tests to the application process, meaning the Fund could begin to tilt more toward helping smaller communities and less toward awarding projects based on merit. Making matters worse is some analysis done by a Senate Ways & Means staffer who is attempting to show that PWTF loans to large communities only end up saving a typical water- or sewer-utility customer a few cents on the dollar – so, according to this staffer’s perspective, why make the loans in the first place. We are just now getting a copy of this internal analysis and already believe it may have serious flaws – I will be circulating it over the weekend and could use your feedback! One area of silver lining in the infrastructure funding category is that we are hopeful of House Capital Budget “executive action” this week on either HB 3301 or HB 3302, bills that would expedite State Legislature approval of low-interest Public Works Trust Fund loan projects, thereby saving time and money and summer construction seasons.

Transportation: The big news in Transportation in Week 4 was on the budget side versus the “bill” side. House Transportation Chair Judy Clibborn, D-41st District, told a few of us that in the development of the 2008 Supplemental Transportation Budget, the Chairs will look to cut projects if they are way off schedule, or have not been taken off the shelf, or there are problems with their design/engineering phase, etc. I have sent e-mails to our technical folks at City Hall and asked them to let me know ASAP if we have any such projects that heretofore had been on the 2003 Nickel Package or 2005 Transportation Partnership Act list. Meanwhile, the Senate Transportation Committee held a lively hearing last week on SB 6772 to create a new “Regional Transportation Authority” elected/appointed body that would succeed Sound Transit in the Central Puget Sound. Sound Transit officials, representatives of the environmental community and others testified with significant concerns regarding the legislation. The concerns included the elimination of any subarea equity protections, and worries that the new Authority would be disproportionately comprised of Seattle and East King County members. Senators who represent Pierce, Snohomish and South King counties have concerns with SB 6772 and we are told that Senator Jim Kastama, D-Puyallup, will come to the Senate armed with amendments to 6772, which will make the Executive Session on the bill quite a firestorm. Even if 6772, or a related bill to repeal the Regional Transportation Investment District, SB 6771, were to clear the Senate Transportation Committee, both face very uncertain prospects on the Senate Floor and even more so in the House.

Supporting the Aerospace Industry: We signed in with support last Tuesday as both the House Finance and Senate Ways & Means Committee held hearings on companion bills HB 3245/SB 6828 promoted by the Aerospace Futures Alliance, of which Renton is a member. The City supports 3245/6828, which extends the 2003 and 2006 excise tax incentives for aerospace to certain aerospace products and functions such as tooling, engineering and design companies, etc. The legislation has a $2 million fiscal impact on the state, so the revenue forecast update clearly may have some bearing on whether it is a viable bill or not (as a tax bill, it likely will be held until after the Feb. 12 cutoff deadline). When I met with Senate Ways & Means Chair Margarita Prentice last Wednesday, she reiterated her support for the legislation but did not have a clear sense of whether it is a ‘go” or not. We are told the House Finance Chair, Rep. Ross Hunter, D-48th District, is a tougher nut to crack on this bill.

2008 Supplemental Operating Budget items — $50,000 for Small Business Development Center in Renton, $50,000 for pilot English Language Learning project at Service Linen: Rep. Eric Pettigrew (D-37th), indicated to me on Friday that he had requested a budget proviso be prepared for our SBDC request, and asked me to follow up with House Appropriations Committee staff. Additionally, Senator Prentice indicated she remains ready to put both provisos into her budget in the Senate. Will the revenue forecast update be so far-reaching and sweeping that it affects even budget requests as small as ours? Only time will tell…..

Protect Home Rule, Prevent Unfunded Mandates/Tax Erosion/Loss of Local Tax Authority: Most bills that undercut local control, have unfunded mandates implications, or erode local authority in some way are heading for the cutting room floor or being revised to address our collective cities’ concerns. However, I, unfortunately, want to report on a handful we need to continue to work on. These include: SSB 5892 is a bad bill that could offer disgruntled builders new avenues to challenge local officials for failure to administer the state building code. It passed out of the Senate Consumer Protections Committee last week, despite local agencies’ opposition testimony…SHB 2938 would require cities to ink an inter-local agreement with fire districts before proceeding on annexations – a virtual ‘veto pen’ for the fire districts that would undercut annexation policy…HB 2618 would repeal all water-sewer assumption statutes…SSB 6385 could subject building officials to new liability exposure for construction defects in residential housing units…SHB 2576 would require cities and counties to zone to all income levels and be potentially subjected to Growth Hearings Board challenges if, for example, a landlord didn’t include an appropriate number of low-income units in a multi-family dwelling…and finally, E2SHB 1873/SSB 6696, opening up new avenues of damage claims for wrongful deaths and injuries, continues to move along. On all the aforementioned measures, either we, or the AWC and/or individual cities, or the AWC/cities in league with other interests, will be looking to slow these bills down.

Quick Snapshot on Other Issues associated with the “Support” and “Track/Monitor sections of our agenda

Affordable Housing: On Tuesday, the House Local Government Committee approved an amended version of HB 2604, which makes it easier for local governments to waive SEPA fees for low-income and affordable housing projects. We have signed in support of this legislation. Several other housing bills are pending.

Criminal Justice/Courts: Legislation to give communities new tools and access to funding to combat gang activity, SHB 2712, is expected to clear the House Appropriations Committee on Monday. Sex offender bills to enhance the notification process (SSB 6489/HB 2786) and to provide for a broader collection of DNA samples (SHB 2713/SSB 6488) are all out of their policy committees. Meanwhile, a comment on two bills affecting our jail operations – one of which we really like, the other one we don’t: SB 6788, the legislation we like, is up for a hearing Monday at 1:30 p.m. in the Senate Ways & Means Committee. It would take $3 million in existing Public Safety Enforcement Account (PSEA) monies and dedicate it to the establishment of a reimbursement fund to help cities and counties offset medical costs associated with jail offenders. If a single offender’s costs exceed $10,000, we are eligible for a state reimbursement, at the Medicaid rate, to offset those costs. The jails operation bill we don’t like, SB 6463, had a Tuesday night hearing in the Senate Labor & Commerce Committee. AWC and Washington State Association of Counties’ (WSAC) representatives testified with concerns over this bill, which limits the use of mandatory overtime for corrections officers at city and county jails. The AWC made use of some technical concerns that Penny Bartley of our jail identified with 6463. Despite the concerns, our understanding is that 6463 may remain alive, at least for now.

Economic Development/Infrastructure: Of the three infrastructure bills that are progressing and would have implications for economic development-related infrastructure funding, we like one and don’t care too much for the other two. HB 3266 and HB 2338 both call for a repeal of the Jobs Development Fund, but don’t offer any revenue in its place to incentivize infrastructure projects that add value to job recruitment or job retention efforts. SSB 6855, meanwhile, has imported provisions previously in 2SSB 5762, which provides dedicated funding for the Community Economic Revitalization Board (CERB) and also provisions to better “urbanize” its mission and functions. 3266 and 2338 are up for Executive Action Tuesday in the House Capital Budget Committee while 6855 is pending before Ways & Means.

Fire/EMS: Both SSB 6445 and companion bill HB 2726 have passed out of their respective policy committees and are now in Senate/House Rules. These bills allow fire agencies to recover costs incurred in responding to a commercial vessel fire on navigable waters of the state.

GMA/land use/Annexation: Last Thursday, the Senate Government Operations Committee passed a substitute version of SB 6727, a measure including provisions that require counties of 175,000 populations or more to consult and collaborate with their cities on development standards for urban growth areas. We like this bill. We are neutral on SSB 6580/SHB 2797, the Futurewise-promoted legislation on climate change that, among other things, would add a 14th goal to GMA plans to have cities and counties consider how to integrate climate change into their land-use planning activities. Some cities and counties disagree with having a goal added to the GMA, and the outlook for 2797/6580 remains uncertain. Also, some city officials have contacted me regarding SHB 3202/SSB 6784, bills promoted by environmental groups to change the time of “vesting” for land-use applications. While these bills have moved out of Committee, I think it is safe to stay that both face considerable trouble ahead.

LEOFF/PERS/FMLA issues: The Senate Ways & Means Committee held a hearing last Tuesday on SB 6573 (House companion is HB 2962), legislation to expand LEOFF 2 benefits and provide new public safety money to local jurisdictions that employ LEOFF 2 police officers or firefighters. The AWC testified in general support of this bill. The bill would establish a state treasury account, with money shifted into the account whenever state revenues are more than 1 percent in excess of a prior year’s revenue base. The idea is to create a $50 million account with half the funds financing a state-paid-for LEOFF 2 benefit enhancement program and the other half financing a state-paid-for pool of public safety money for local jurisdictions. All that sounds good, but certainly I report to some local elected officials who are nervous about just how much the LEOFF 2 benefit will ultimately cost and whether local jurisdictions will be asked to pony up. The bill is likely to be amended in a way that will have the $50 million threshold being achieved gradually, by 2015.

Local government in general/contracting issues: Both the House Judiciary and Senate Government Operations Committees passed amended versions of HB 3001/SB 6547 this past week. These bills in their underlying form required local parks divisions of local agencies to file a series of extensive and expensive reports on gender equity with respect to community athletic programs and usage of community fields in terms of boys vs. girls. The amended bills turn the reporting requirements into a study process, which is much better. The Washington Recreation and Parks Association continues to have some technical problems with other parts of the bills and they remain a work in progress. SSB 6235, a bill that deals with contracting and procurement, has local governments anxious. SSB 6235 extends the number of contracts we have to take through competitive bidding and passed the Senate Government Operations Committee last week (it now also contains provisions on port district direct elections).

Water-Sewer District “assumption” legislation: As noted in the “Unfunded Mandates/Local Control/Local Authority” part of this report, HB 2618 to repeal all water-sewer ‘assumption’ statutes passed out of the House Local Government Committee. We are hopeful that several legislators are prepared to help us keep it from going any further.