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Dear Friends,

2012 LEGISLATIVE REVIEW
BUDGET AND JOBS

It is good to be back home in the Spokane Valley after the Legislature adjourned early Wednesday morning, April 11, following an all-day and overnight marathon session to finalize and pass a supplemental operating budget that closes a $1 billion shortfall.

Six special sessions in two years under Democrat control

In two years, the Legislature has had six special sessions under Democrat control, which are in addition to two regular sessions — and all dealing with the same subject: the operating budget. It's unfortunate, expensive, and demonstrates a lack of leadership under one-party control.

A repeated cycle of overspending and unsustainable operating budgets

We knew last year in May when Democrats originally passed a two-year operating budget (also during a special session) that it spent too much, ignored meaningful reforms, and was not sustainable. By the time we reached September, the budget was in the red. That's when Gov. Gregoire said she would be calling a special session beginning Nov. 28 to close the shortfall. So essentially, the Legislature has had eight months to come up with a revised supplemental operating budget.

Republicans set spending priorities in the budget

Early in the process, my House Republican colleagues and I decided to work on writing a budget proposal that was based on the Priorities of Government model originally used by Gov. Gary Locke and Sen. Dino Rossi in 2003. Under this system, we identified three basic and essential core services of government for priority funding in the budget: education, public safety and protection of the state's most vulnerable citizens. We also agreed with the state Supreme Court's ruling in January that the Legislature was not doing its part to make ample provision for the education of all children in the state. So in our House Republican budget, we proposed to fund education first before any other state programs. Unfortunately, Democrat leaders refused to allow our budget proposal to advance.

Democrats' priority: Pass gay marriage bill

It was very disappointing that Democrats set aside the budget and spent 36 days of the 60-day regular session this year working toward passage of same-sex marriage legislation. They also spent time unsuccessfully pushing for mandatory insurance coverage of abortions. House Democrats waited until 17 days from the end of the regular session before releasing their budget proposal. And Senate Democrats waited even longer, leaving only 10 days in the regular session to negotiate a final plan.

Democrats' original budget plan would have put the state in the red in 2013

Both House and Senate Democrat budget plans proposed to delay a payment of millions of dollars to K-12 public schools across the state until the next budget cycle in July 2013. This would not only have shortchanged schools, but it would have started the 2013-15 budget cycle in an immediate deficit — which would continue the practice of irresponsible and unsustainable budgeting.

Republicans insist on reforms in the budget

Most lawmakers returned home during the special session, leaving only those involved in writing the budget in Olympia. With a seat at the budget table, Republicans negotiated for reforms that would ensure long-term sustainability of the operating budget. Democrats were very reluctant, which dragged negotiations into the final days of the 30-day special session.

Lawmakers returned to the Legislature on April 4, and for a week, negotiations continued until the final hours of the last day of special session, April 10, when agreements were finally reached. We were able to secure three important reforms, including a statutory requirement for future operating budgets to balance across four years (similar to my proposed balanced budget amendment to the state constitution – House Joint Resolution 4225), changing early retirement eligibility for new public employees hired after May 2013, and providing more efficient health care insurance options for public school employees.

Supplemental operating budget still spends too much

While I supported the reforms, I still have many concerns over the final supplement operating budget that passed the Legislature. Although Republicans were able to convince Democrats to drop cuts to education, fully fund levy equalization for our schools, and do it without a sales tax increase (as the governor proposed), I voted against the operating budget for the following reasons:

  • It counts on a one-time accounting change to the state's cash flow, but uses this one-time money for ongoing expenses.
  • It fails to make difficult choices by continuing to fund large social entitlement programs we can no longer afford, such as Disability Lifeline. It also spends tax dollars on Obamacare when we don't even know the future of this socialized medicine plan.
  • It spends too much and leaves a dangerously low reserve – only $319 million. Of that amount, $238 million is a change in how local sales tax monies are accounted for. So in reality, the true ending-fund balance is $81 million, which is less than TWO DAYS worth of reserves based on state expenses. We still have five revenue forecasts remaining before the new budget cycle begins in July 2013. Even one slightly down forecast could immediately wipe away this paltry ending-fund balance. This is inviting another crisis.

Job creation – a huge opportunity missed!

Nearly 290,000 people in Washington are unemployed and looking for jobs. I believe getting government off the backs of small businesses and opening the doors to the entrepreneurial spirit of job creators through lower taxes and reduced regulation is the long-term answer to our state's budget problems.

After the governor announced in September she was calling a special session on Nov. 28, House Republicans again re-stated the need to get Washington working again. In an opinion editorial to The Seattle Times on Oct. 17, House Republican Leader Richard DeBolt said: “The state needs to get the weight of big government off the backs of employers and working families. We need to unleash the power of the private sector to create jobs and get Washington working again. A healthy economy will enhance the prosperity of working people and generate more revenue for state and local government. This is a vastly better approach than trying to raise taxes on people when they can least afford it.”

In 2011, my House Republican colleagues and I created a jobs package of legislation we called “Let's get Washington working again.” This year, we worked to refine that package to meet the needs of employers and our state's economy. Our jobs plan included, but was not limited to, the following bills:

  • House Bill 2290 would have simplified and reduced the number of tax rates for small businesses;
  • House Bill 1961 would have required agencies to make a permit decision within 90 days or it is granted;
  • House Bill 1125 would have recognized hydropower as renewable energy, helping to provide for lower electricity rates;
  • House Bill 1872 would have reformed workers' compensation by addressing final settlement options and other reforms to contain costs to the system, minimize time loss, and protect earnings for those who suffer work-related injuries and illness;
  • House Bill 2276 would have enacted major regulatory reforms;
  • House Bill 1779 would have modified joint and several liability to alleviate the high risk of tort claims on government and employers, irrespective of degree of fault;
  • House Bill 1341 would have delayed implementation of rules until they have weathered the scrutiny of a legislative session;
  • House Bill 1156 would have extended the governor's moratorium to suspend unnecessary rulemaking for three years or until state revenue growth shows evidence of economy recovery;
  • House Bill 1671 would have required state agencies to determine whether compliance of a proposed rule would have a specified economic impact on jobs and taxpayers before adopting the rule; and
  • House Bill 1592 would have suspended the Growth Management Act in counties and cities where the unemployment rate exceeds 7 percent for three consecutive months.

Despite our best efforts to advance jobs legislation during the 2012 sessions, House Democratic majority leaders refused public hearings on nearly all of the bills, effectively killing them.

Republicans versus Democrats – a difference in job-creation philosophy

Democrats' answer to job creation in Washington is to borrow money to create short-term government-financed jobs to build infrastructure – i.e. fix up parks, public buildings, etc. Taxpayers must foot the bill over 25 years with interest, long after the jobs are gone.

Increasing public debt and growing government are not the answers to job creation. Instead, it will be the small businesses of our state that create jobs – if only we give them the opportunity to grow and prosper. Remember, it is private sector businesses that CREATE wealth. It is government that CONSUMES wealth.

I believe in smaller government that fosters economic growth in the private sector. Many of my colleagues on the other side of the aisle, however, have worked to grow government under their one-party control. How has that worked out? It's resulted in higher taxes and fees, deeper public debt, and recurring budget deficits in the billions of dollars. As Ronald Reagan so famously said, “Government is not the solution to our problem; Government IS the problem.”

As your state representative, I will continue fighting to open the doors of opportunity for small businesses in our state so that we not only retain jobs, but make Washington attractive as a place to live, work, and do business.

It is my honor to serve you!

IMPORTANT NOTE ON ELECTION-YEAR MAILING RESTRICTIONS

Because this is an election year, my legislative communications to you are restricted by law. After May 11, I am no longer allowed to send e-mail updates, such as this one. And after June 30, I am unable to communicate with constituents via mail or e-mail unless specifically asked to respond to a letter or issue. These restrictions stay in effect until Nov. 30.

I encourage you to continue communicating with me, as I work for you throughout the year. Please call, write or e-mail my office any time you have questions, comments or suggestions about state government. I am here to serve you! My district office is conveniently located in Spokane Valley. You'll find the address above.

Sincerely,

Matt Shea

State Representative Matt Shea, 4th Legislative District
RepresentativeMattShea.com
427A Legislative Building | P.O. Box 40600 | Olympia, WA 98504-0600
matt.shea@leg.wa.gov
360-786-7984 | Toll-free: (800) 562-6000