Senate Democrats' capital-projects plan released Friday doesn't include help for the Heritage Center project on the state Capitol Campus, which appears to delay the project's start for at least another year.
The Senate construction plan would scale back construction spending slightly from last year’s $5.7 billion, two-year capital budget to reflect the state’s falling revenues and ability to pay off bonds. But it also assumes a half-percent tax increase on toxic materials that the oil industry opposes, and it would put $115 million into Puget Sound and toxics cleanups – using funds from the Asarco smelter settlement for some of that work.
The budget would keep funds available for local school projects that have voter money, but it potentially would suspend some community projects that are not “ready to go,’’ as Senate Ways and Means vice chairwoman Karen Fraser, D-Thurston County, put it.
“We are continuing our priority from last session of focusing on ready-to-go projects,” she said in a statement that accompanied her rollout of a budget she drafted. Fraser said the plan is a “modest” reprioritizing of last year’s project list.
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The smaller budget does include $39 million in new projects through cost savings on projects under way – including projects at the University of Washington and space at the Museum of Flight’s space gallery to house a retired NASA space shuttle. Fraser predicted the new projects would create 4,800 jobs in the coming year.
The proposal was headed to a hearing Friday evening, and a vote was planned over the weekend in the Senate Ways and Means Committee, said committee Chairwoman Margarita Prentice, D-Renton.
Whatever the full Senate approves needs to be reconciled with the House plan. The House proposal is similar in that it assumes a toxics-tax increase, but it also would put $100 million of new funds into housing projects and $200 million into school energy projects.
Authorization of the Heritage Center project is omitted in both budgets, just as Gov. Chris Gregoire did in her budget released in December. Fraser acknowledged that this puts the Heritage project, which she championed early on with Republican Secretary of State Sam Reed, deeper into limbo.
Barring passage of a new fee bill that Fraser introduced Monday, it means the project would not break ground in the next year, she said. Lawmakers adopted legislation two years ago to increase certain auditor recording fees to pay for costs, but the economic downturn reduced the revenues.
With less funding available, the project would require much higher rents for state agencies using the Heritage Center, doubling rent for the State Library to $2 million a year, Fraser said. The library already is having trouble getting enough funds to match its federal allocations, she said.
The Heritage project is meant to offer a reception area for visitors to the Capitol, as well as a home for the State Library, which moved temporarily to Tumwater a few years ago, and a link to state archives. The project had been planned on the bluff overlooking Capitol Lake where the General Administration building stands.
Reed is advocating a new home and a scaled-back, $119 million Heritage Center on the site of the former campus visitor center at Capitol and Sid Snyder ways. That site is under review along with one alternative, the site of the Hands On Children’s Museum just north of the Capitol Campus.
The Heritage project was supposed to start construction by next year and open in 2012, but those time lines are slipping and it would open in 2013 at the earliest, according to Reed spokesman David Ammons and assistant secretary of state Steve Excell.
One ray of hope is left, Fraser and Excell said, and that is Senate Bill 6881, which Fraser and Republican Sen. Jim Honeyford introduced Monday. It would add a $27 recording fee surcharge for assignments or substitutions of deeds of trust that were previously recorded with county auditors.
This potentially would raise $2 million a year for the Heritage Center and $1 million for local governments’ archiving work. But the bill has no hearing scheduled, and time is running out.
The capital budget also assumes passage this year of the first increase in the state tax on toxic substances since voters approved a 0.7 percent tax in 1988. The House is proceeding with a smaller-scale increase of 0.1 percent a year over four years, pushing the total to 1.1 percent – just below the 1.2 percent overall rate that the Senate assumes immediately.
Dave Fisher, a lobbyist for a coalition of oil and other business interests opposed to the tax increase, said the size of the tax proposal is still a moving target. But he said it appears both the House and the Senate appear to recognize there could be job losses if the tax is increased. He also predicted an increase in gasoline prices, an outcome that Gregoire and environmentalists have disputed.
Brad Shannon: 360-753-1688