Their idea is a new way to pay for government construction projects. Sen. Derek Kilmer says the concept is simple: Issue revenue bonds, just like the state does now to pay for state highway and bridge projects with gas taxes.
But this construction package – which could be for $1 billion or more – would rely on the state’s toxics taxes, public works trust funds, and perhaps other streams of money that roll into the state’s capital budget.
“What we want to look at is a responsible approach that has the state making investments that make sense,’’ the Gig Harbor Democrat said.
The bonus: Unlike past jobs plans, this one would avoid adding debt payments to the state’s general fund, which already needs a $2 billion fix. It also could avoid a trip to the ballot, allowing work to get under way in the next construction season.
Kilmer, the capital-budget leader in the Senate, said the goal is to reduce joblessness in the economically gutted building-trades sector.
Also working on the package is House Capital Budget Committee Chairman Hans Dunshee, D-Snohomish – the architect of previous unsuccessful bond packages targeted at job creation.
So far, Republican leaders have not signed on, nor has Gov. Chris Gregoire. But they are not fighting it – at least not yet.
“There’s a skeleton proposal right now,” said Republican Sen. Linda Parlette of Wenatchee, who worked with Kilmer earlier this year to set up a debt commission to study problems with the state’s financial balance sheets.
DEBT VS. JOBS
Parlette said she remains worried by the state’s debt level but at the same time wants to help the economy and get a good deal on state construction projects. As she puts it: “How do you have money to spend when it goes further in times of recession, and spend less when times are flush?’’
Contractors and labor groups have formed a coalition to support the concept for a simple reason: They are screaming for jobs.
“The rest of the economy is in a recession. Construction is in a depression,” said Rick Slunaker of Associated General Contractors of Washington. “Contractors have laid off 35 percent of their work force in recent years. … In some crafts and trades, unemployment is above 50 percent.’’
Jeff Johnson, leader of the Washington State Labor Council, said the jobless rate “ranges from 20 percent to 60 percent, depending on the craft and the area of the state.”
“We’re four years out from the beginning of the Great Recession, and we have never had this high of unemployment four years out since the Great Depression,” Johnson said.
The two groups have been lobbying jointly in meetings with legislative leaders and Gregoire. The governor has asked her staffers to look into the idea further, a spokeswoman said Friday.
The Labor Council and AGC hope for a package worth $2 billion that might add 30,000 jobs – a level Dunshee thinks could lower the jobless rate by a full percentage point. Dunshee and Slunaker say a big program could generate about $100 million in taxes over the next three years.
CRITICISMS
Details are still being worked out between Kilmer, Dunshee and their Republican counterparts, including Parlette.
Depending on the specifics, critics could surface. Environmentalists fear that toxics taxes could be diverted from stormwater and environmental cleanups to unrelated projects.
Past legislatures have raided the toxics accounts to plug gaps in the operating budget, and Gregoire just last month proposed another transfer that the Nature Conservancy and Washington Environmental Council strongly oppose.
But Mo McBroom of the Environmental Council said Kilmer and Dunshee could make it work for everyone if they keep the environmental dollars for environmental projects.
“If this is done right, it’s not a raid,” McBroom said. “It’s a smart investment upfront in environmental projects that need to be done.”
SORTING OUT THE FINANCE PUZZLE
How that gets settled is the challenge. So is the mix of projects, which Dunshee and Kilmer said they have not yet drawn up.
The kinds of projects could be anything from public housing and community college campus projects to stormwater, sewer and even culvert projects to help salmon runs.
Kilmer said he wants to see projects that:
- Add to a larger economic development growth. He cited past investments in a health-sciences hub at Washington State University’s Riverpoint campus in Spokane that could prompt academic research and private-sector spinoffs.
- Take advantage of today’s lower costs for labor, materials and interest, as well as local or federal dollars that otherwise would sit idle.
- Cut costs or help to generate state revenue. Kilmer said repairs at park campgrounds help generate more revenues.
URGENCY
Johnson said the plan’s supporters are so far getting a generally favorable response.
“People understand the urgency to create jobs,” Johnson said. “I think they understand the construction industry is one of those key pivotal industries that not only induce a lot of jobs in other sectors but also raise revenue through the sales tax – which is certainly something we need to have happen.’’
Brad Shannon: 360-753-1688
bshannon@theolympian.com
www.theolympian.com/politicsblog
