Gregoire to seek protected rainy-day fund

Gov. Chris Gregoire wants a constitutional amendment to reserve some of the state's nearly $1.9 billion budget surplus in a protected rainy-day fund.

Sen. Margarita Prentice, D-Renton, the influential chairwoman of the Senate budget committee, said Monday that Gregoire would announce the proposal today as part of her series of budget rollouts across the state this week.

"We believe we're being responsible, wanting to set money aside," Prentice said. "I was a Depression kid. I really do believe in setting money aside and living within your means."

Prentice did not know the specifics of the plan, and Gregoire's spokeswoman, Holly Armstrong, said details would not be released until today's news conference in Seattle.

Last year, Sen. Joe Zarelli, R-Ridgefield, first raised the idea of setting up a rainy-day account through a constitutional amendment. Last week, he sent out a news release saying he would be pushing the legislation again.

Under his plan, 1 percent of the general state revenue each year - about $120 million - would be put into an account that could only be tapped by a three-fifths vote of the Legislature during good economic times. Under his measure, the fund could be tapped with a simple majority of the Legislature during economic downturns, when employment growth is less than 1 percent.

Zarelli said that Gregoire's plan is comparable to his, with the only changes addressing what to do once the fund reaches about 10 percent of the budget.

Zarelli said the money should first pay down the pension liability, and that any interest should go toward K-12 education. He said the governor's plan would use the money for school construction, with the interest growing in the fund.

He said he's willing to live with the differences.

"There's a good opportunity here," he said. "This is an important tool to get us off the roller coaster ride we go through in budgeting."

A constitutional amendment needs to be approved by voters after a two-thirds approval in both the House and the Senate.