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May 3, 2012

Dear Friends and Neighbors,

On Tuesday, the governor signed into law a new supplemental operating budget bill which closed a $1 billion shortfall, as well as several budget reform bills. It culminated a process that began back on Sept. 22, 2011 when the governor said she was calling a special session beginning Nov. 28 to close the budget shortfall. Since that time, we have had three special sessions and a 60-day regular session to address the state's budget crisis.

In my e-newsletters over the past several months, I've tried to keep you current on the budget, the obstacles and delay tactics by the majority party, and the “behind the scenes” stories that have led this Legislature to six special sessions under single-party control in the past two years. To save some time, I won't recap that information in this newsletter, and you're welcome to go back and read through my past e-newsletters here. Instead, I would like to bring you up to date with the final actions of the Legislature which led to adjournment in the early morning of April 11.

Early in the regular session, House Republicans drafted our own budget proposal based on the Priorities of Government model used back in 2002 by Gov. Gary Locke. We identified three core areas of government for funding in the budget: education, public safety and protection of the state's most vulnerable citizens. Those were the priorities we fought for in the final budget.

With hours remaining on April 10 as the special session was coming to a close, negotiators reached agreement on the following budget reforms:

• Four-year balanced budget requirement – Washington is the first state in the nation to adopt a requirement that no budget can be adopted unless it balances for the current two-year budget cycle as well as the following one. I voted for Senate Bill 6636 because it will ensure that state lawmakers consider the long-term costs of their policy decisions.
• State pension system reform – Under Senate Bill 6378, public employees who are hired as of May 2013 and enroll in the Public Employees' Retirement System (PERS), Teachers' Retirement System (TERS) or School Employees' Retirement System (SERS) may retire before age 65, after 30 years of service, with a pension reduced by 5 percent for each year of retirement before age 65. This measure is expected to save taxpayers approximately $1.3 billion over the next 25 years.
• Health insurance for public-school teachers and classified staff – Senate Bill 5940 will improve transparency and insurance options for teachers and school district staff. Currently, these public servants are forced to purchase their health insurance from a single carrier, their school districts. This leads to unfair premiums for families and lack of choice. Senate Bill 5940 will ensure equity between single employees and employees with families and report data on costs of health care and administration.

I supported these reforms. I was also pleased the final operating budget agreement maintained important school levy equalization dollars and avoided a sales tax increase (such as the governor proposed). However, I was unable to support the final budget for several reasons:

• It counts on a one-time accounting change to the state's cash flow, but uses one-time monies 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 $311 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 $73 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.

I'm very concerned the Legislature could be back in another special session to address the budget if we have a negative revenue forecast. Earlier this week, the Washington Policy Center, an independent think tank, said it believes the “final budget stands only $46 million away from deficit.” Read the Washington Policy Center article. This is why I primarily voted against the final budget bill.

I am also very concerned the Legislature spent so much time on divisive social issues, such as passing same-sex marriage, and the final few weeks on the budget, that one of the most important issues to Washington citizens – private-sector job creation – was lost in the mix. Nearly 290,000 people in Washington are still without jobs. Despite House Republicans' efforts to move this issue to the forefront, job creation became a missed opportunity of the 2012 legislative sessions.

I recently sent an opinion editorial to our local newspapers on this issue. You can read more about it below, following my contact information.

As always, I appreciate the opportunity to serve and represent you. Please feel free to contact my office any time you have questions, comments or suggestions.

In your service,

Dan Kristiansen