WASHINGTON STATE

Washington State House Democrats

HOUSE DEMOCRATS

Rep. Orwall’s e-memo for March 18

Dear Neighbor,

I – and, I expect, many of you – have spent time this week watching dramatic videos of the devastating earthquake and tsunami that literally wiped out parts of Japan.  I’ve been horrified by the terrible loss of life, the pictures of once-thriving communities reduced to rubble, and the fear that an already-unimaginable situation could become much, much worse.

But I’ve also been brought to tears by the images of miraculous rescues, of courageous workers putting themselves at risk trying to avert a nuclear meltdown, and of communities pulling together in a time of crisis.   The resilience of humans – and of humanity –has truly been demonstrated these last few days.  I know many of you have been greatly moved by this tragedy, too.

Also, some of you may be worried about the possibility of leaking radiation reaching our shores.  The Department of Health routinely monitors air samples for radiation around the state. Since last Friday when the reactors in Japan began to fail, they’ve stepped-up our air monitoring and have seen no readings above what is normal for our state.  If you would like more information about this, the Department of Health has a list of frequently asked questions at:  https://www.doh.wa.gov/Topics/japan-faq.htm.

 

Protecting the family home

I wanted to provide you with an update on my bill to address the serious foreclosure issue in our district and our state.  For most families, their home is their most important asset and we want to ensure a fair process for all in order to keep families in their homes whenever possible.

In just the past two years, more than 77,000 families lost their homes to foreclosure here in Washington.  HB 1362, known as the Foreclosure Fairness Act of 2011, encourages banks and homeowners to work together and explore alternatives to foreclosure.

In 2009 the Legislature passed a “meet and confer” requirement in which lenders were supposed to offer to meet with homeowners before going forward with foreclosure, but some of the large national banks haven’t done it consistently.  Disregard for the law is what prompted this new system that will help homeowners stay in their home whenever possible. The Washington’s Foreclosure Fairness Act of 2011 will:

 

  • Make a more robust “meet and confer” requirement and give homeowners who are at risk of losing their homes the right to interact directly with their lenders.
  • Fund more housing counselors to assist homeowners understand their options.  Research has shown that trained housing counselors working with homeowners have reduced the number of foreclosures.
  • Create a foreclosure mediation requirement to discuss all alternatives.  Foreclosure mediation with a neutral person in the room has been shown in other states to drastically reduce the number of foreclosures.
  • Provide a consumer protection act remedy for institutions that fail to comply.

The additional housing counselors and oversight of this process will NOT be paid by state dollars but by a $250.00 fee on banks for filing paperwork pertaining to foreclosure.  This fee will only apply to banks that have over 250 foreclosures in a calendar year and will generate approximately $7.5 million.  Therefore the homeowner does not pay for the use of a housing counselor. If a mediation session is required because a solution could not be reached with a housing counselor during the “meet and confer” process, the homeowner and lender would share the cost of the mediator.

I am pleased that the bill passed the House and is now eligible for a vote on the Senate floor.  I look forward to this bill passing the legislature.

Revenue forecast will force more budget cuts

The latest revenue forecast was released on St. Patrick’s Day and, as expected, there was no pot of gold at the end of that rainbow.  Dr. Arun Raha, our state’s chief economist and Executive Director of the Economic and Revenue Forecast Council, predicted that revenue for the next two fiscal years (the 2011-13 biennium) will be $698.4 million less than previously thought.

That means that the next biennium’s shortfall between revenue that is expected to come in and the amount necessary to maintain the state budget at its current level has increased to about $5.4 billion. Keep in mind that the “current level” has already been reduced by $5.1 billion in cuts and savings to every area of state government including natural resources, health care, corrections, education and general government.

At the council meeting, Dr. Arun Raha made the following statements:

  • There is still a high degree of uncertainty associated with this forecast, including the tragedy in Japan and the political unrest in the Middle East.
  • Gas prices are rising – the forecast assumes higher prices.
  • Construction employment is still very low and is dragging down the state’s economy.
  • On-line sales have been growing, causing even more leakage in the state’s revenues.  The Department of Revenue estimates that we will lose $740 million in revenue in the 2011-13 biennium – more than the enough to compensate for the lower forecast.
  • This forecast does assume the Boeing tanker deal, but the bulk of the impact won’t be seen till after next biennium.

It’s hard to imagine the enormity of this challenge.  Look at these numbers:

  • We could cut our entire public higher education system – all six of the four-year institutions and all 34 of the two-year community and technical colleges – and we’d solve just about 50% of the shortfall.
  • We could close down our entire state corrections system – all nine prisons, three minimum custody camps, and fifteen work release centers – and we’d solve about 33% of the shortfall.
  • We could eliminate all state environmental efforts – all programs to promote clean air and water, clean up pollution, encourage conservation, and preserve our natural resources – and we’d solve less that 10% of the shortfall.
  • We could do ALL of these things and it still wouldn’t bring our budget into balance.

It will take a lot of work to meet this challenge, but it’s our job to make responsible decisions for these tough times.

Fast fact:  The Washington state budget is less now, on a per-person basis, than it has been since 1986!

 

State unemployment numbers drop slightly

There was a little bit of good news this week, though. The state’s Employment Security Department released its latest jobs report showing another slight decline in unemployment from 9.2 percent in January to 9.1 percent in February. This is a relatively significant improvement from last February when unemployment was 10 percent.

The most significant gains were in the construction industry, welcome news for a group of workers hit hard in the aftermath of the recession.

This chart shows how Washington State’s unemployment rate has compared with the rest of the country during the Great Recession.