PORT ANGELES — To deal with the projected $12 billion to $15 billion budget shortfall the state will face over the next four years, legislators likely will have to approve a mix of budget cuts and new revenue sources, a lobbyist said.
Josh Weiss of Gordon Thomas Honeywell, a lobbyist with the North Olympic Legislative Alliance, gave an overview of the legislative session during Wednesday’s Coffee with Colleen program produced by the Clallam County Economic Development Council.
With the session about halfway over, the most important topic facing the state this year is the operating budget shortfall, Weiss said.
“Revenues are still growing,” Weiss said in regard to the operating budget. “It’s just that our expenditures are projected to grow faster.”
The size of the shortfall is unclear. In the fall, the number was about $6 billion. Later, it grew to about $12 billion. As of last week, Weiss said the number seemed to be closer to $15 billion.
“I actually am very curious to better understand why there could be this much debate at this point about the size of the problem,” Weiss said. “Usually, by this point in the session, there’s pretty bipartisan agreement on what the target is.”
To help address whatever the shortfall is, then-Gov. Jay Inslee proposed $3 billion in reductions in December. Last week, Gov. Bob Ferguson came out with proposals to slash another $4 billion.
New revenues sources, such as a wealth tax, also have been discussed.
“I think the wealth tax feels pretty unlikely to me,” Weiss said.
Instead, he predicted smaller proposals would make more headway — things like Real Estate Excise Tax (REET) changes, lifting the 1 percent property tax cap and more.
But Ferguson’s priority appears to be budget reductions, rather than revenue additions, Weiss said. And, with the size of the budget shortfall, Weiss said he didn’t think focusing on revenue generation would go over well, “even in blue-leaning Washington.”
Actions at the federal level, such as tariffs and funding freezes, could throw more wrenches at the system, Weiss said.
“More than any other session that I’ve seen, it feels to me like there is this sword hanging over our head, which is the federal government,” he added.
In addition to the omnipresent budget discussion, the state also is focusing on housing, public safety, education and transportation, Weiss said.
In the housing arena, there are proposals on the table to change certain housing regulations, such as prohibiting cities’ requirements that new developments have a certain amount of parking.
Another proposal is a rent cap.
“The majority seems pretty committed to it,” he said. “I would not be surprised at all if we saw something this session.”
Another priority is public safety, with Ferguson stating he will not sign a budget that doesn’t include at least $100 million in additional funding for law enforcement.
“The turnaround of the Legislature in the last, really even two years, on public safety is just fascinating,” Weiss said.
The Legislature also is prioritizing education, Weiss said, with three bills known as “the big three” currently being considered.
One would increase the amount of money available for districts to spend on materials, supplies and operating costs. The second would increase funding for transportation. The third is focused on special education funding.
“From what I’ve heard with local districts, it sounds like the special education one could be a real significant increase for local districts,” Weiss said.
While the operating budget has a spending problem, Weiss said the state transportation budget is facing a separate issue – a revenue problem.
That budget, traditionally funded by gas tax, is continually decreasing as consumers switch to electric and fuel-efficient vehicles.
Now it is struggling to pay for short-term projects, “let alone in the future,” Weiss said.
To deal with the shortfall, Weiss said the state likely will cut and delay existing projects, as well as attempt to raise additional funds. That could include an increase in related fees and possible implementation of a road usage charge.
“My feeling is that it’s getting more and more real each year the Legislature talks about it,” Weiss said, referring to the road usage charge.
Another issue, which Weiss said could have a large impact on the North Olympic Peninsula, is a continuing conversation on how to generate revenue from state trust lands.
That includes discussions regarding whether logging is a sustainable way to generate continual revenue, or whether the state should consider entering into some markets for ecosystem services.
“I think it’s coming to a theatre near you,” Weiss joked. “So, something to pay attention to.”
________
Reporter Emma Maple can be reached by email at emma.maple@peninsuladailynews.com.
