State lawmakers on Monday introduced a proposed constitutional amendment that would reduce the government's ability to take on debt, with the goal of freeing up money for capital improvements during economic downturns.
The bill would reduce the state's constitutional debt limit from 9 percent to 7 percent. The ceiling would return to 9 percent in years when economic growth is less than 1 percent.
The economic-growth trigger is modeled after an existing rainy day fund within the state's operating budget. Voters approved that constitutionally protected fund in 2007 to be used for budget emergencies.
The authors of the new measure say that by reducing debt obligations most of the time, the state could afford to put more money toward its capital budget when the economy is weak and unemployment is up. The capital budget funds projects such as school construction, community infrastructure development and environmental stewardship, such as parks.
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"If you're maxing out the credit card in the good years, you're constraining yourself in the lean years," said Sen. Derek Kilmer, D-Gig Harbor, who announced the measure Monday alongside Sen. Linda Evans Parlette, a Wenatchee Republican.
Parlette and Kilmer said their bill addresses an urgent need for greater financial stability in the state. Washington is facing an estimated $5 billion deficit in the next two-year budget, which is roughly $37 billion.
On Friday, Gov. Chris Gregoire signed into law a package of measures that will slash the current fiscal-year deficit by about $370 million through a combination of cuts to some state programs and fund transfers from others.
"We are being forced into reality this year," Parlette said. "This is time to think long-term and think about the sustainability of future budgets."
The bill, whose co-sponsors include Senate leaders from both caucuses, is awaiting a hearing in the Ways and Means Committee. It would require approval by two-thirds of the Legislature and then by a majority of voters in the next election.