PLAs, Trust Fund Raids as Part of Budget Battles?

It seems that the budget battles in every legislative session are used to provide cover for under-the-radar policy changes and trust fund raids. This year is no different. Here are some of the issues AGC is working on right now in Olympia:

• “Labor Peace Agreement” – The Supplemental Capital Budget provides $10 million for the expansion of the Washington State Convention and Trade Center. However the House version (HB 2836) adds language stating that an advisory committee (comprised of hospitality but not construction interests) will be formed to among other things “Develop a labor peace agreement to protect any public agency’s financial interest in the expansion project.” A budget bill is an odd and inappropriate vehicle to implement what could be a government-mandated project labor agreement which are opposed by AGC.

• Farm internships via Workers’ Comp trust fund raid – The Supplemental Operating Budget would create a new farm internship program and fund it with $50000 from the Workers’ Comp Trust Fund. “This trust fund is paid for by workers and employers on behalf of injured workers” AGC Government Affairs Manager said at a recent hearing on the provision. “The farm internship program does not fit that criterion. In addition employers were hit with a 7.6 percent workers’ comp tax increase this year and it’s small diversions like this that increase pressure on the fund.”

• New worker training via Unemployment Insurance trust fund raid – Legislation HB 2630 would siphon $98 million from the state unemployment trust fund to support a new worker training program called “Opportunity Express.” AGC supports worker training but diverting UI taxes is not an appropriate way to fund this new program. Employers have seen their UI taxes increase in excess of 200-300 percent this year alone due to the sustained rate of high unemployment. Programs such as this are more appropriately funded through the general fund.

• Public Works Trust Fund – Last year the Legislature squeezed the juice out of the Public Works Trust Fund; this year they may toss out the rind. In 2009 lawmakers transferred $368 million of the Trust Fund’s $400 million to the general fund to help balance the budget. This year’s supplemental budget would transfer another $20 million. These raids mean the state Public Works Board which oversees the trust fund will not be able to offer local governments and utilities trust-fund loans for construction planning or pre-construction efforts for at least the next two years. Since the fund’s inception the Public Works Board has issued 1779 trust-fund loans worth more than $2.3 billion supporting more than $5 billion in local infrastructure investments with no defaults on loans in the history of the program.

For more information about these proposals contact AGC’s Legislative Office in Olympia 360-352-5000.