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Legislative Update from WRPA Lobbyist

A lot of landmark action occurred in Week 14 – from the House Transportation Committee passing transportation revenue measures to Senators introducing dueling school “levy reform” bills to help finance K-12 education to a House Finance Committee hearing on legislation related to city and county fiscal needs. Yet, the week will probably be remembered more for one key area of inaction.

During Week 14, Senate and House operating budget negotiators did well on trading accusations, but not so well on making progress.  With a week to go until the April 26 “Sine Die” for the 2015 Regular Session, it is now all but certain the Legislature will go into at least one 30-day Special Session.  Look for Governor Inslee to call a 30-day ‘rolling Session’ where most Senate and House Members are available as needed, and in some cases hold hearings on particular budget ‘trailer’ bills, while a cadre of Members continue their negotiations.

With respect to the 2015-17 Operating Budget and the markedly different Senate and House approaches to crafting it, as one negotiator told me, “We have to get past the flim-flam stage.”  Senators are claiming they cannot negotiate with the House on a budget built on new-revenue/new-tax measures until House Members prove they can actually pass those measures off the Floor.  House Members are accusing Senators of issuing “ridiculous” ultimatums.  And so on.  In terms of getting into the guts of the Operating Budget challenges, and insights on legislators who are central to brokering a deal, I would commend to you these two articles from Crosscut, written by John Stang and with a political cartoon (“the Budget Boys”) you all might enjoy:

http://crosscut.com/2015/04/the-boys-behind-the-budget-doors/

http://crosscut.com/2015/04/having-fun-yet-legislatures-endgame-is-just-beginning/

As for some of the key happenings of Week 14:

  • On 17-8 and 16-9 votes, with three Republicans joining majority Democrats in voting “yes,” the House Transportation Committee approved Striking Amendments to ESSB 5987/ESSB 5988, the transportation revenue and ‘additive funding’ bills that, along with a bond bill, comprise the 2015 transportation investment package.  “Five-corner” negotiations are already underway, but they will be inextricably tied to the Operating Budget;
  • Senators Bruce Dammeier (R-Puyallup/25th Dist.), Jim Hargrove (D-Hoquiam/24th Dist.), and Kevin Ranker (D-San Juan Islands/40th Dist.) are emerging as central figures on legislative initiatives that would, in various forms, either increase the state’s portion of property tax support to school districts while lowering local levies, or increase capital gains taxes on upper-echelon earners while lowering local levies.  The bills in play are SB 6109 by Sen. Dammeier, SB 6103 by Sen. Hargrove, and SB 6102 by Sen. Ranker.  As if that isn’t enough, we have State Schools Superintendent Randy Dorn introducing his own ideas, the State Treasure readying his tax reform proposals, and the House Appropriations Chair, Ross Hunter (D-Medina/48th Dist.) weighing in with a go-slow bill (HB 2239) that sets up a council to study all this and make future recommendations.

While these bills and initiatives don’t directly impact local governments, they are central to how lawmakers will address K-12 funding and budget obligations pursuant to the McCleary case, and they could in the “end game” involve some adjustment to the 1 percent property tax limitation on cities and counties.  Here are a couple of articles of interest on the K-12 and “levy reform” initiatives:

http://www.seattletimes.com/seattle-news/politics/senate-democrats-education-plan-use-capital-gains-tax-to-reduce-local-levies/

http://crosscut.com/2015/04/legislators-focus-on-dealing-with-school-funding-obligations/

Away from the drama of transportation, budget deals (or lack thereof), and school funding debates, we are nearing the end of a Session where we will have seen nearly 2,400 bills introduced in the Senate and House, with only 326 of those measures (170 Senate, 156 House) passing both chambers.  The final days of Session will be focused on continuing negotiations over Operating, Capital, and Transportation budgets, the transportation revenue-and-reforms package, and lawmakers reconciling differences in bills that passed both chambers but with slightly differing versions between the Senate-passed and House-passed bills.

From a WRPA perspective, it was a very solid Week 14.  Our priority bills on both sales tax simplification, and on establishing a new outdoor recreation sector lead in the Governor’s Office, cleared important hurdles.  On other priority fronts, we will be awaiting the outcomes of budget negotiations.

Following is an overview of where we stand on 2015 WRPA “Top Priority” and “Support” items.

Top Priorities

Enhance WWRP funding in 2015-17 Capital Budget (Capital Budget):  Last Tuesday, on a 39-10 Floor vote, the Senate passed its version of the 2015-17 Capital Budget (Striking Amendment to EHB 1115).  The Senate action set the stage for Senate-House negotiations and solidified the Senate’s stance on items such as the Washington Wildlife and Recreation Program (WWRP).  As I’ve reported, there is a positive side to the Senate’s WWRP approach:  It provides over $68 million in funding for the WWRP and makes an unprecedented commitment to funding several-dozen “over-subscribed” local parks, trails, and water access projects.  Of concern, however, is that the Senate budget changes the rules for a series of WWRP projects which already went through a very thorough ranking and prioritizing process.  Many state natural resource agency acquisition projects that had qualified for WWRP funding were zeroed out, while some others were funded in different parts of the Capital Budget.  The House Capital Budget, incidentally, provides $75 million in WWRP funding and uses the prioritized and ranked lists of state and local projects across all categories.

At the direction of the WRPA Executive Board and Legislative Committee, we prepared a WRPA letter to Capital Budget negotiators on both the WWRP and the Youth Athletic Facilities (YAF) funding level (see below).  The WWRP portion of the letter, which I have attached with this report, expresses our concern with mid-stream changes to the WWRP program.  Yet the letter also acknowledges the strong signal sent by the Senate that the nearly-25-year-old WRPA program needs re-evaluation and revision.  We recommended a formal task force and offered our organization’s services to help lead and/or facilitate such a process.

HB 1550 - DOR request legislation on “Amusement and Recreation Services” sales taxes (Policy Bill):  Last Wednesday, the Senate passed an amended version of this bill by a 43-4 vote. It now heads to the House for a concurrence vote. There is a worry that the House may choose not to concur on 1550, since House Finance Committee Chair and prime sponsor Reuven Carlyle (D-Seattle/36th Dist.) does not support provisions of the Senate amendment exempting skydiving and ballooning from the sales tax.  At this point, efforts are being made to get a House concurrence; if that fails, the next option would be for the House to refuse to concur and for the Senate to “recede” from its earlier amendment.   We shall see.

1550 simplifies sales taxation of “amusement and recreation services” and reduces the administrative tax collection burden associated with these services.  The DOR legislation would statutorily exempt swim lessons as well as basketball, soccer, softball, and volleyball leagues.

Re-establish competitive grant funding for the Youth Athletic Facilities (YAF) program (Capital Budget):  The Senate’s Capital Budget Floor vote reaffirms a YAF funding level of $10 million, with $7 million set aside for competitive grant funding and $3 million earmarked for two specific projects.  We again extend our thanks to Senate Ways & Means Capital Chair Jim Honeyford (R-Sunnyside/15th Dist.) for his efforts.  As an added note, we in WRPA have decided we can live with the Sec. 3170 portion of the Senate Capital Budget conditioning YAF grants as follows:

The appropriation is provided solely for grants for acquisition, development or renovation of youth athletic fields. The recreation conservation office must require grant recipients of youth recreation field grants to have a fee waiver policy for youth athletic clubs who use the fields acquired, developed or renovation with funds from this appropriation. The fee waiver policy must discount or waive fees based on the youth athletic club's rates charged and scholarships provided to low-income athletes compared to other clubs using the fields.

Support Key Recommendations of the Blue Ribbon Task Force on Outdoor Recreation – ESSB 5843 (Capital and Operating Budgets; Policy Bills):  Last Monday on a vote of 65-32, the House approved an amended version of ESSB 5843 regarding outdoor recreation.  The House amendments to 5843 attach performance metrics to the new outdoor recreation sector position, and remove a Senate provision that the person taking on this role be confirmed by the Senate.  A House Floor Amendment also reversed an earlier Committee amendment that had moved the position into the Department of Commerce – it is back in the Governor’s Office to stay.  As our folks may recall, the establishment of an outdoor recreation ‘czar’ or sector lead was one of the top recommendations of the Blue Ribbon Task Force.

On Thursday, the Senate “refused to concur” with the House amendments to 5843.  The rift is over the Senate confirmation language.  House Members had earlier considered – but rejected – what I would characterize as “in-between” language that did not subject the new outdoor recreation sector lead to confirmation, but did require a consultation process for the Governor with affected outdoor recreation, business, hunting, and fishing organizations.  Late last week, the bill’s prime sponsor, Sen. Kevin Ranker (D-San Juan Islands/40th Dist.) expressed a high degree of confidence that Senators and House Members will work this one out.

We thank both Sen. Ranker and co-sponsor Linda Parlette (R-Wenatchee/12th Dist.) for 5843, which both establishes the first-ever outdoor recreation sector lead and amends the “No Child Left Inside” program to ensure it includes grants to programs that utilize veterans.  Alongside the policy bill, 5843 is funded in the Senate’s Operating Budget, which sets aside $331,000 for the sector lead and $1 million for the No Child Left Inside program. 

On other Task Force recommendations in the Governor’s Budget or introduced as bills or budget items:

  • Sustainable State Parks Funding:  Last Monday, former Blue Ribbon Task Force Co-Chair Doug Walker submitted a letter, complete with logos and names of 33 different outdoor recreation, labor, business, and environmental organizations, urging the Senate and House to sustainably fund the State Parks system.  The letter expresses concern that the $15 million level of state support in the Senate budget (compared to $39 million in the budgets put forth by the Governor and the House) could lead to layoffs and deterioration of the Parks system. Washington State Parks Commissioners and staff were overjoyed and overwhelmed (in a good way) by the letter, which we in WRPA helped initiate and draft

While the Doug Walker letter focuses on the Operating Budget, I will quickly note that the Senate’s Capital Budget includes slightly more funding for State Parks than the $57 million in the House version.  Both budgets provide new capital allocations for State Parks, but fall far below the $91 million in the Governor’s budget.

  • Real Estate Excise Tax Flexibility:  See below.  
  • “Marine Tourism Bill” – SB 5878:  Nothing new to report – this legislation is referenced in the Senate Operating Budget but not the House version.  5878, chiefly promoted by the Northwest Marine Trade Association and supported by recreational boaters, extend to six months the amount of time large, LLC-designated boats could spend in state waters before being subject to use tax. 
  • “Lid removal” for non-highway purpose fuel tax accounts:  As reported last week, SHB 1738 is “dead” for the 2015 Session, but it is worth noting that a good foundation has been laid for taking the bill up again in 2016.  1738, prime sponsored by Rep. Ed Orcutt (R-Kalama/20th Dist.), included a future-year removal – the year 2031 -- of a 23-cent ‘lid’ that has resulted in the percentage allocations of 14 ½ cents worth of gas tax going into the Motor Vehicle Fund rather than into the dedicated accounts for boating facilities, off-road vehicles (“NOVA” account), and snowmobiling. 

Support Items

Making permanent the optional authority for cities and counties to use “REET” proceeds for Parks M&O, and ‘harmonizing’ the first and second quarter percent REET – HB 2122; SSB 5585:  These bills are “dead” for Session.  However, with a Special Session now a near-certainty, there is the possibility for bills – including these – to be resuscitated.  2122 would have continued to provide some flexibility for cities and counties in the use of their REET proceeds – though not the amount cities and counties ideally preferred.  

Advocate for key “Safe and Healthy Communities” needs, local funding, and “lid removal” in any Transportation Investment Package worked on in 2015 (New Revenue):  Last Tuesday night, as noted in the introduction to this report, the House Transportation Committee approved “Striking Amendments” to the revenue (ESSB 5987) and “additive funding” (ESSB 5988) bills from the Senate-passed transportation revenue package.   While both 16-year packages are financed with a combination of an 11.7-cent gas tax (phased in over three years), bonding, and fee increases, there are marked differences in how the packages deal with the Governor’s desire to implement a “Low Carbon Fuel Standard” (Senate would remove multi-modal funding from the package if that happens), whether they re-direct sales tax (Senate yes, House no), and whether they incorporate a 20-percent cost savings estimate based on “practical design” of projects (House yes, Senate no).  Here’s a very quick look at how the 16-year revenue packages treat our priority items: 

1) Bicycle and pedestrian funding and Safe Routes to Schools – House $131 million, Senate $106 million;

2) Direct funding distributions for cities and counties – House $433 million based off of gas-tax distributions, Senate $375 million based off of multi-modal distributions;

3) Local financing options for cities and counties – House allows City Councils and County Councils with adopted Transportation Benefit Districts (TBDs) to impose up to a $50 Vehicle License Fee as one of the TBD financing mechanisms – provided they have used the current $20 for at least two years.  Senate uses a $20 to $40 local option;

4) “Complete Streets” – Both packages provide $160 million in grants over 16 years.  House package directs the Transportation Improvement Board (TIB) to administer the program; and

5) Both packages deposit the proper percentage of the 11.7 cents in new gas tax into dedicated accounts for the Boating Facilities Program, “NOVA,” and snowmobiling ($3.584 million in Boating Facilities Program added funds in 2015-17).  The House, in Sections 101-103 of its 5988 spending bill, front-loads the appropriations for these three accounts so the money can be applied right away to construction projects.

Support general-obligation bonds to restore a prior-year diversion of funds from the Recreation Resource Account (RRA) (Capital Budget): Neither the House Capital Budget nor the one rolled out by the Senate allocates a one-time, $3.3 million addition of general obligation bonds to restore funding previously diverted from the Recreation Resource Account (RRA).  However, as noted above, the House’s gas-tax package has the effect of creating $3.584 million in additional revenue that can be applied to projects this year.  Our thanks to House Transportation Chair Judy Clibborn (D-Mercer Island/41st Dist.) for integrating this into her package.  We believe the Senate is positively pre-disposed to doing the same thing.

Support legislation to remove the 23-cent “lid” on the amount of fuel tax deposited into non-highway-purpose accounts for boating, off-road-vehicle, and snowmobiling infrastructure (Policy Bill; Transportation Budget):  See above regarding SHB 1738.

Protect funding for dedicated accounts within the Capital Budget (Capital Budget):  We were delighted to see the House Capital Budget fund the Aquatic Lands Enhancement Account (ALEA) at $9.5 million.  The Senate Capital Budget funds ALEA at $5.27 million.  While we of course prefer the House approach, it is worth noting that both budgets for ALEA exceed the mark from the Governor’s proposal.  The Governor’s capital budget proposal diverted $7 million worth of ALEA funds into the Operating Budget, and then backfilled only about half of the diversion.

Easing property tax ‘suppression’ pressures on MPDs/Parks Districts: (Policy bill):  We’re not aware of any bill on this front.  We are told that Park District funding is not adversely impacted by a related bill – SHB 1940 – which, as amended in the Senate, now provides protection until Jan. 1, 2023 against property tax levy “suppression” for the King County Flood Control Zone District and the Chehalis River Basin.  SHB 1940 passed off the Senate Floor last Tuesday on a 43-4 vote.

Amend the Public Records Act to protect the identities of immediate family members and guardians of children who enroll in parks and recreation programs (Policy bill):  Last Thursday, HB 1554 was formally delivered to the Governor.  Rep. Melanie Stambaugh (R-Puyallup/25th Dist.) prime-sponsored this legislation for her City of Fife folks. It will be the first bill signed into law for the 24-year-old freshman Member.

 “Big Tent” Outdoor Recreation Coalition (Budget & Policy Items):  As we await a May 13 Board Meeting of the Big Tent Coalition (both John Keates and myself serve on the Board), it’s worth giving a shout-out to the value of this Coalition:  The distribution list we keep for the Big Tent was used effectively to help generate the names and logos of 28 organizations for a “Please Pass ESSB 5843” letter to Speaker Chopp, and 33 names and logos of organizations for a letter to Operating Budget negotiators on State Parks funding!

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