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| LEGISLATIVE REPORT #1 |
February 3, 2009 |
J. Pat Thompson
Deputy Director
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2009 Legislative session kicks off amid budget crisis
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THE 2009 LEGISLATURE convened on Monday, January 12 with a billion dollar budget shortfall looming over lawmakers as large as the Capitol Dome. Re-elected Governor Gregoire and the Democratic majorities in the House and Senate have an enormous task in front of them for the next 105 days. The biggest decision for legislators is balancing the budget given the Governor’s “No Tax” pledge. While it may be popular to make such a commitment, it means that even basic services such as health and safety are jeopardized, hardly a popular idea among citizens, much less the Democratic constituencies.
So, how are they going to get out of town? Most likely a combination of the following:
- Massive cuts in spending
- A referendum to the people that raises revenue
- President Obama’s Federal Stimulus Package
The first casualties in the governor’s budget were the state employees and teachers who saw their cost-of-living increases (6.2% for teachers and 2% for the state workers) cut to 0%! Although the affected unions sued, it’s doubtful that these dollars will be restored, at least not in 2009. Knowing what’s at stake, the legislative leaders have given themselves more time to deal with the budget by cutting back the amount of time they deal with other non-budget policy bills. Our union’s biggest budget issues are centered around Local Government Options and Pension Funding. We’ll cover pension issues first.
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Projected Unit Credit (P.U.C.) Method vs. Aggregate Method
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For everyone who isn’t an accountant, this is as confusing as it is boring, but billions of your pension dollars are at stake! The governor’s office has once again sought to go to the P.U.C. method to fund pensions. This isn’t the first time it’s been discussed and goes back to the Locke Administration.
While the P.U.C. method is a legitimately recognized method in actuarial circles, it is riskier and will cost everyone more down the road. One of the reasons that our pension funding has stayed strong is that Washington State uses the more conservative method of Aggregate Funding. Simply put, P.U.C. lowers the amount you pay now and hopes to catch up later while the current Aggregate method costs more upfront and lowers future cost due to the higher investment returns, saving everyone in the long run.
HB 1847 — This bill would increase the amount of work that County and City 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 131 — 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.
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