Zarelli revenue-saving proposal a 'gift to future legislators'
Measure to increase budget stability wins Senate committee approval

March 2, 2009

OLYMPIA… The Senate Ways and Means Committee late today endorsed legislation that captures one of the important lessons of state government’s budget situation, approving Sen. Joseph Zarelli’s proposed constitutional amendment to automatically deposit “exceptional revenue” into the state’s rainy-day fund. 

To Zarelli, R-Ridgefield, Senate Joint Resolution 8209 is the latest in a line of lessons-learned fiscal legislation that created the Economic and Revenue Forecast Council following the state’s 1981-83 budget crisis and most recently produced the state rainy-day fund in 2007.  

“This won’t help us come up with a budget for the next biennium. But it would be a gift to future legislators, just like the forecast council and, more recently, the rainy-day fund have proven to be,” said Zarelli, who last week answered Olympia’s $8 billion question with a strategy for erasing the massive state budget gap without tax increases. 

“There is no down side to this measure,” Zarelli said. “It represents one less decision for the Legislature to make and one more protection for the taxpayers, who need and deserve every protection they can get.” 

Today is the cutoff for Senate fiscal committees to act on Senate bills. Because Zarelli’s measure would amend the state constitution, it would go on the November general election ballot if legislators approve it during this session.  

“I believe the people would recognize the merit of this just as they did in creating the rainy-day fund in 2007. I appreciate the committee’s endorsement and hope the Senate and House of Representatives will follow suit,” Zarelli said. 

Sen. Lisa Brown, Senate Democrat leader, is at the top of the list of SJR 8209’s co-sponsors. She worked with Zarelli to put the rainy-day fund amendment before voters, who approved it overwhelmingly. 

Under SJR 8209 revenue collected in excess of 133 percent of the state’s 10-year revenue growth average would be defined as “exceptional” and go into the state’s rainy-day fund. Had the change represented by his proposal been made prior to 2005, Zarelli estimates the gap lawmakers must close in adopting an operating budget for 2009-11 would be nearly $5 billion smaller. 

The state’s budget gap has reached $8.3 billion, based on a $1.3 billion deficit in the current biennium, which ends June 30; a $6.5 billion shortfall next biennium if lawmakers do not address the current biennium deficit, continue government operations at today’s levels and allow costly new policy changes to go forward; and on leaving $500 million as an ending balance. 

“I expect our state’s economy will rebound – although that will take longer if families and job creators are saddled with higher taxes – and maybe somewhere down the road we’ll experience another period of exceptional revenue growth like the state had in 2005-07,” Zarelli said. “If so, let’s treat that revenue like the one-time money it is and put some aside. 

“There was nothing to compel the Legislature to set aside any of the extraordinary amount of revenue two or three years ago, and no safe place to put it,” Zarelli added. “Now that we have a rainy-day fund and have seen how quickly the huge revenue surplus disappeared, we need to adjust our budgeting practices accordingly.” 

Zarelli’s budget-transparency measure, Senate Bill 5073, remains alive beyond today’s cutoff, being necessary to implement the budget. It would fold into the state’s general fund what are known as “near general fund” accounts, allowing lawmakers and taxpayers to better see and understand how much the Legislature is spending, and on what.  

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For more information contact Eric Campbell
at (360) 786-7503 or campbell.eric@leg.wa.gov