Republicans and Democrats in the Legislature are discussing different approaches for financing capital projects that would help the hard-hit construction sector.
OLYMPIA — State lawmakers say talks continue on a more than $1 billion public-works package that could potentially put 25,000 people to work, many starting in the summer construction season just months away.
A top Republican met Thursday with Senate Majority Leader Lisa Brown, D-Spokane, and said later the GOP is interested in the concept, though still not committed to any specifics.
“We are still at the table to see what is going to come forward,” Senate Republican Leader Mike Hewitt, of Walla Walla, said Friday. “I liked the approach we talked about … more than any other approach so far.”
Senate Democrats led by Sen. Derek Kilmer, of Gig Harbor, are putting together the package, working with counterparts in the House. In a nutshell, they would sell revenue bonds for school, community, stormwater, sewer, water and other projects — paying for them using a portion of the revenues Washington expects to receive from taxes on hazardous materials such as oil and pesticide products and from public-works funds.
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“This isn’t a discussion about a new tax. This is looking at an existing revenue stream and not raising taxes,” Kilmer said recently.
He said projects have not been agreed upon but that sponsors are asking: “Are there investments the state is going to make anyhow that you can make now because it’s cheap?”
“It’s in the interest of taxpayers,” Kilmer said. “Interest rates are low. And it’s a time when our general trades and construction contractors are really hurting.”
Rep. Hans Dunshee, D-Snohomish, says he could release his own version of a draft plan as soon as Tuesday, “just to start the conversation” with a broader audience. So far, talks have mainly been among the capital-budget leaders of both parties in the House and Senate.
Dunshee said bond counsel for the state Treasurer’s Office have taken some funding off the table, including some of the oil taxes subject to a lawsuit. But he is looking for other options that could get the total package value above $1 billion.
The Washington State Labor Council, Associated General Contractors and Washington State Building and Trades Council are all on board for a package as large as $2 billion.
For Republicans who have complained that Democrats keep spending capital funds to plug gaps in the operating budget, the plan might have the added benefit of nailing down some of that money.
Sen. Linda Parlette, R-Wenatchee, is leading the Senate Republicans’ discussion, and she said recently that leadership would need to step in and give the proposal a go.
She also has said she thinks the plan could address recommendations from the Legislature’s debt commission, which is trying to lower the debt available for projects during good times and make more available in bad times.
Dunshee has said he thinks the Senate’s interest in lowering the state debt limit could enter into the final package. But he would balk if the limit is set so low the state could not continue to pay for school-construction projects.
The four capital-budget leaders are focused on how to pay for projects in a way that meets the standards of bond companies and does not hurt the state credit ratings, said Rep. Judy Warnick, R-Moses Lake, who is leading her caucus’ discussion on the jobs package.
“We want to keep our credit rating up,” she said.
Like Hewitt, Warnick said she liked the idea of locking up cash in the capital-budget accounts to protect against raids. She estimated “there’s been at least $1 billion cash transferred from the capital budget to cover operating costs. It’s gradually impacted the ability to address capital projects across the state.”
Parlette, Warnick and the Democrats say they are looking at a way to build a plan that would not have to go to the ballot for voters’ approval.
The Washington Environmental Council has been open to the approach as long as money in the Model Toxics Control Act isn’t used to pay interest on bonds for projects unrelated to stormwater and other environmental cleanups.