Governor's Proposal Cuts Funding for Local Public Works

Gov. Inslee released his state budget proposal last week. The Governors Budget Priorities for a Working Washington significantly increases funding for education -- as required via the State Supreme Courts McCleary decision -- and includes new revenues to pay for it. Click here for more info from the Governors office about the budget priorities.

AGC is combing through the details of the budget for impacts on construction and one of those impacts has raised the concerns: Gov. Inslees budget would strip $162 million out of the Public Works Trust Fund (PWTF) the program that provides low-interest loans to local governments to finance eligible public infrastructure construction and rehabilitation.

We appreciate the difficulty of developing a budget under the current economic conditions said AGCs Legislative Counsel Van Collins. However raiding the Public Works Trust Fund is the wrong approach particularly given the Governors top priority of revitalizing the states economy. The mission of the PWTF—to fund essential infrastructure including water wastewater road bridge and solid-waste and recycling projects—is a vital part of the state’s overall economic-development strategy.

Collins noted that for each dollar invested in new construction the state’s economy generates an additional $1.97 in economic activity throughout the state and for each $1 million invested in construction an additional 16 jobs are created across the economy -- not just in construction directly but through multiplier effects for suppliers retail and other industries.

AGC and its partners within the Washington Construction Industry Council (WCIC) recently sent a letter to legislative leaders requesting that the PWTF be fully funded. Concern about PWTFs funding is well founded: Over the past few budget cycles the Legislature has greatly reduced the amount of funds available in the PWTF through budget transfers and legislation diverting certain revenue streams.

Because the PWTF is a revolving loan fund such actions continue to undermine the PWTF over time even though the program is a national model that is widely supported throughout the state WCIC told the legislators. These actions negatively impact job growth economic development and regulatory compliance in Washington State.

During the recent application process local governments and special purpose districts submitted over $1 billion in project requests for the available $685 million – even the available funding is inadequate to cover the demand for these basic infrastructure loans. Another diversion as proposed by the Governor would further exacerbate this underfunding.

For additional information about the Public Works Trust Fund contact Van Collins 360-352-5000.