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State balanced budget requirement proposed with exceptions

 | by JASON MERCIER | April 3, 2012

I hate to be the bearer of bad news but there is no balanced budget requirement in Washington State. The Governor is required to propose a balanced budget (RCW 43.88.030) and if at any time a cash deficit is projected the Governor is required to immediately implement across the board cuts (RCW 43.88.110), but the Legislature is not required to adopt a balanced budget.

This would change under bills currently under consideration. The first proposal was adopted by the Senate 36-12 back on February 13. That proposed constitutional amendment (SJR 8222) would require the Legislature to adopt budgets that projected to be balanced over 4 years. This means the Legislature could not knowingly adopt a budget that would result in a deficit in the next biennium. The one exception to this requirement would be in years that money is appropriated from the state's constitutional budget reserve. Despite receiving approval by the Senate, the House did not even hold a hearing on SJR 8222.

Among the sticking points in the current budget negotiations has been SJR 8222. Yesterday a bill was introduced in the House to require a balanced budget over 2 years with exceptions. HB 2827 would put into statute (not the constitution) the following requirement:

"When the legislature enacts any bill that makes appropriations from the state general fund or related funds, the legislature must prepare and publish a balance sheet which demonstrates that total proposed appropriations from the state general fund and related funds for that biennium will leave, in total, a positive ending fund balance."

This requirement for a balanced budget would not apply, however, in the following circumstance:

". . . does not apply to an appropriations bill that (a) either makes net reductions in total general fund or related funds appropriations or increases the ending fund balance in the general fund or related funds, or both, and (b) is enacted between July 1st and February 15th of any fiscal year."

An example of this would have been the "budget" adopted last December during the 2nd Special Session of 2011 which did not fully address the budget deficit the Governor called on the Legislature to resolve.

Another curious provision of HB 2827 is Section 10 which establishes an expiration date for the bill on July 1, 2023. This means the policy of Washington state in statute would be to have a balanced budget requirement only until 2023.

According to a press release issued by the House Democrats:

"The House is moving forward Wednesday with a short list of bills that will be necessary to implement (NTIB) the supplemental operating budget.  Although an agreement on the final budget has not yet been reached, the House Democratic negotiating team wants to get the ball rolling.

'We have been negotiating in good faith practically every day of this special session,' said House Ways and Means Chair Ross Hunter (D-Medina). 'We've taken significant steps toward the Republican position, and are still willing to discuss the final sticking points, but the time has come to act as well as talk.'

'We will also be placing a striking amendment to the budget on the bar Wednesday morning," said House Majority Leader Pat Sullivan (D- Covington), "and we plan to take action on it later this week.  The length of time it takes to pass a budget through both chambers means we have to begin moving things now.'

. . . Hunter's committee will hold a public hearing on the bills Wednesday at 1:00 pm and they could be voted on by the House as early as Thursday.

'Not every one of these bills may pass,' he said.  'But if we're going to get a budget out by Easter, it's time to find out.'"

It remains to be seen if HB 2827 will satisfy the demands of the bipartisan Senate coalition for sustainable budget reforms. The bill's lack of requirement for budgets to be sustainable in future years, however, probably won't pass the test.

As of this morning no budget agreement has been reached. Today is day 23 of the 1st Special Session of 2012. It has been 194 days since the Governor called on lawmakers to balance the budget.


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