Final budget solution includes reforms worth waiting for

After a 60-day regular session, a 30-day special session and a last minute one-day special session extension, the 2012 Legislature finally arrived at a bipartisan compromise budget solution to our state’s projected billion-dollar budget shortfall for the 2011-13 biennium.

While many of us in the Legislature – and much of the public as well – were frustrated at the slow pace of action, the meaningful reforms tied to the budget compromise will place Washington state on much firmer fiscal ground in the future and help the state get off the “budget rollercoaster” we’ve been on for the last few years.

The three main reforms that were ultimately part of the final “budget package” include:

Senate Bill 6378, which reduces some of the early retirement benefits from state employees hired after May 1, 2013. This reform is expected to save the state around $1.3 billion over the next 25 years.

Senate Bill 5940 proposes to study how to best address cost and equity in health benefit plans for all school employees. This legislation was put forward in response to a 2010 report by the State Auditor’s Office in an effort to look at how the current health benefit plans for educators and administrators compare to those of classified school staff.

The goal with this proposal is to find a balanced approach by 2016 that creates cost and benefit equity between both certificated and non-certificated classified school employees. The end result should bring more transparency, equity and accountability to K-12 health benefit plans while ensuring tax dollars are spent wisely.

Senate Bill 6636 requires the Legislature to adopt a budget that is not only balanced for the current two-year budget cycle, as is required by current law, but extends that requirement out to the next two years as well. This will help hold legislators accountable for future spending and prevent the governor from signing budgets into law that she or he knows will be out of balance in a couple of years, as was the case when Gov. Gregoire signed the 2009-11 budget.

The final budget compromise also included no new cuts to K-12 and higher education. I feel this is critical as our local, educated workforce must be positioned to help lead us out of the current recession when companies begin expanding operations and employers begin hiring again in earnest.

I joined my House Republican colleagues earlier in the session in putting forth the first budget of the 2012 legislative session. Our proposal played a key role in setting the tone and tenor of the budget debate. Our priorities of funding education first, protecting public safety and the most vulnerable, and passing a budget with no general tax increases or budget gimmicks helped provide a framework that led to the final budget negotiations.

While I did support the final budget, I do have some concerns. The compromise budget includes only $319 million in reserves. Of which, about $238 million is one-time money found by changing how the state collects, stores and distributes sales and use tax dollars to local governments. I’m very concerned that this low reserve could be gobbled up by any decrease in our projected revenue collections.

If you recall, the Legislature passed a budget last year that left about $620 million in reserve. The day after the governor signed the bill into law, the new revenue forecast came out and nearly all of that money disappeared overnight. With several more revenue forecasts to go before the end of the two-year budget period, I would have preferred a much higher ending fund balance.

In the end, I felt the final budget represented a good compromise between philosophical ideals without representing a compromise in my priorities and principles.

The reforms included in the budget are a good step in the right direction as we work to make Washington more fiscally sound for generations to come.