December 2011
Dear Neighbors,
Legislators are in Olympia this month to begin solving the $2 billion budget problem our state is facing this year. As much as I’d rather be home with my family, preparing for the holidays, it’s important that we begin the work it will take to fill this hole as soon as possible.
As I’ve said before, this will not be an easy task. Over the past three years, we’ve had to cut $10.5 billion from state services including health care, public safety, care for our elderly and people with disabilities, and education programs.
Writing a budget for the whole state has always taken a complete session to finish, so the few weeks we have this month may not be enough time to do the whole job. But any steps we can take early will have an impact on the bottom line.
Report on our tele-town hall meeting
As part of my personal way to cut state spending, I have discontinued mailing newsletters to your home. But I still think a vital part of my job is to stay in contact with the people I represent as much as I can. This e-memo is one way of doing that.
Another much less-expensive tool for communicating with you is the tele-town hall meeting. I held my second tele-town hall of the year a couple of weeks ago, focused on the current budget situation and how best to address it.
Over 5800 district residents were contacted by phone and invited to participate in the call – nearly 600 people chose to listen in to at least part of the meeting. I thought the question that were asked resulted in a good discussion of possible actions, including areas in the budgets that could be cut further, services that might be eliminated altogether, reforms to make government more efficient, and suggestions for increasing revenue.
Ideas were all over the board – much as they are here among legislators – but there was a strong consensus that there’s no single answer to this economic crisis. I deeply appreciate all of you who took time out of your evening to participate in the conversation.
How would you balance the budget?
What do you think the right course is for rebalancing the state operating budget? What would you cut; what would you enhance?
The League of Education Voters has posted a budget calculator on their website that lets you make those decisions. You can cut or eliminate programs, reduce or cut off funding to local governments, and/or raise revenues. The services and programs you decide to cut or keep will impact the children, families and seniors of our state.
Try it out, if you get a chance, and then let me know what choices you prefer.
Reforming government efforts lead to good economic news – Boeing is staying and state businesses see their costs decrease!
You probably saw the good news earlier this month – Boeing and their machinists’ union reached an agreement that will assure Washington will be the home of the new 737 Max! This is a great boost to our economy, securing many thousands of local jobs.
The very next day we learned that, thanks in part to major reforms passed by the legislature last year, most businesses in Washington will see not only their workers’ comp premium stay steady, but also a significant drop in unemployment insurance costs.
This would be the first time since 2007 that L&I rates have not increased, saving businesses $150 million next year. It is important to remember, however, that some businesses still might see premium increases based on their recent claims history and risk class. For example, restaurants and retail stores will see a 3% drop, but construction and forest products could see a slight increase due to their injury claims.
As far as unemployment insurance costs, most employers in the state will receive a lower tax rate in 2012, and all rate classes will drop. In fact, tax rates for employers that had no layoffs in the past four years will plummet by 71 percent, to an all-time low for that rate class (side fact: 91% of employers in rate-class 1 are small businesses with fewer than 5 employees).
In total, the tax-rate reductions will equal about $207 million, in addition to the $300 million in savings passed by the Legislature last year.