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Budget proposal offers $238 million; could it break logjam?

Post by Jordan Schrader / The News Tribune on March 21, 2012 at 6:01 pm with No Comments »
March 21, 2012 6:08 pm

An accounting maneuver being considered at the Capitol might allow Democrats and Republicans to cast aside the biggest point of contention in their ongoing budget negotiations.

Republican lawmakers have been bashing Democrats for wanting to push a payment to school districts into the next budget period, Democratic lawmakers have criticized Republicans’ budget for skipping a payment to underfunded pension plans, and State Treasurer Jim McIntire has criticized both ideas as “felony gimmicks.”

Gov. Chris Gregoire has put forward a third, previously undisclosed alternative, with support from McIntire. While legislative leaders have yet to publicly embrace it, no one is rejecting it either, Senate budget chairman Ed Murray said.

As described by McIntire’s office and others, the proposal would keep sales-tax revenue collected on behalf of cities and counties in the state’s general fund longer. That could free up $238 million for spending elsewhere.

“It’s a permanent process change, not a one-time change,” said Wolfgang Opitz, the assistant state treasurer. “We don’t put it in the ‘gimmick’ category.”

Local governments would get their money at the same time they do now, Opitz and budget writers say. Several local governments and their associations say they’re fine with the idea the way it’s being described.

As it works now, a day after sales tax collections land in the general fund, local governments’ share is transferred to a special account. But it’s not distributed to the cities, counties, transit agencies and others until the end of each month.

The proposal would keep the money in the general fund until the end of the month, transferring it into the other account just before it needs to be sent out to local governments. That would provide about $238 million more cash on the state’s balance sheet at the end of the month.

Opitz said that can be used to increase the amount the state assumes is available to spend in a given budget period. The state normally counts only the revenue it collects during that two-year period, not what is owed and expected to be collected later, but Opitz said it can afford to be a little less “ultra-conservative” because of the improved cash flow, and still have plenty of cushion.

Gregoire’s office declined to comment.

Senate budget writers Murray and Joe Zarelli were keeping mum on details, but confirmed the proposal is under consideration.

“It’s potentially one of the ways that could help us figure out how to get to a final budget,” Murray said.

I’m preparing a story for tomorrow’s paper on the proposal, with help from Andrew Garber of the Seattle Times.

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