Budget is legislators' biggest challenge

THE BIGGEST CHALLENGE for Washington State legislators during the 2009 session is to balance the budget. Doing so will be an enormous task.

Not only does the legislature face a $6-billion (and growing) budget shortfall, but Gov. Chris Gregoire also has pledged not to raise taxes. “Although it may be popular to make such a commitment, it means that even basic services, such as health and safety, are jeopardized,” says Council 2 Deputy Director Pat Thompson.

“So, how are they going to get out of town?”

The most likely recipe, Thompson says, will be a combination of massive cuts in spending, a referendum to the people that raises revenue, and drawing on President Obama’s federal stimulus package.

Council 2’s biggest budget issues are centered on pension funding and local government options.

• Pension funding involves a choice of the projected unit credit (puc) method as against the aggregate method.

Even though this is boring and confusing for anyone who is not an accountant, it involves billions of members’ pension dollars.

“The governor’s office has once again sought to use the puc method to fund pensions,” says Thompson. “This isn’t the first time it has been discussed; it goes back to the Locke Administration.

“Although the puc method is a legitimately recognized method in actuarial circles, it is riskier and will cost everyone more down the road,” Thompson explains.

“A reason that our pension funding has stayed strong is that Washington State uses the more conservative method of aggregate funding.

“Simply put, puc lowers the amount you pay now and hopes to catch up later, whereas the current aggregate method costs more upfront and lowers future cost due to the higher investment returns, saving everyone in the long run.”

• Among the bills that involve local government options:

HB 1847:

This bill would increase the amount of work that counties and cities would be able to perform in-house.

SB 5228:

This is another bill dealing with bid limits for counties and would provide clarity for counties who want to use in-house labor for construction projects.

HB 1722 / SB 5307:

These bills would change the default option for newly hired employees who don’t choose a retirement plan from Plan 3 to Plan 2.

HB 1317:

This bill would protect the personal information of public safety employees by making it exempt from public disclosure.

HB 1862/SB 5782:

These bills would assist in the operation of the Municipal Courts.

HB 1947:

This bill allows cities to create a street utility option to raise revenue for local improvements.