Feb. 12, 2009

Bailey sponsors legislation that would require the state to save exceptional revenue
Concept has companion, bipartisan support in the state Senate

Rep. Barbara Bailey is sponsoring legislation that would direct exceptional state revenue in good economic times to the state's budget stabilization account - better known as the rainy day fund. House Joint Resolution 4209 would require the state constitution to be amended.

“We face a $6 billion budget shortfall today, but what has been lost in the debate is the fact our state had a $1.6 billion surplus just three years ago. Had our state been responsible and put this extra revenue aside, our budget shortfall would be much smaller today,” said Bailey, assistant ranking Republican on the House Ways and Means Committee. “Instead, our state spent this money to expand programs and is now facing a budget crisis.”

House Joint Resolution 4209 would require the state to automatically move revenue collected in excess of 133 percent of the state’s 10-year revenue growth average into the rainy day fund. The 2005-07 budget cycle saw this type of extraordinary revenue primarily due to a hot housing market. If Bailey's proposal and the rainy day fund had been in place in 2005, the state would have set $2.4 billion in revenue aside in that budget cycle.

“Saving more money in great economic times is just a smart way to budget. It would also lead to taxpayer protections and better state government. Had this process been in place in 2005, our budget shortfall would be around half of what it is today,” said Bailey, R-Oak Harbor. “Unfortunately, some state lawmakers just cannot help themselves when they have extra revenue. We need to limit spending options and put important sideboards on the budget process.”

Bailey’s measure has a companion in the state Senate, Senate Joint Resolution 8209, which has bipartisan support from Sen. Joe Zarelli, ranking Republican on the Senate Ways and Means Committee, and Senate Majority Leader Lisa Brown, D-Spokane.

For House Joint Resolution 4209 to pass the Legislature, it would require a two-thirds vote in the state House and Senate. If approved by the Legislature, it would then go to a vote of the people in which a simple majority would be needed to amend the state constitution.

The state's constitutionally-protected rainy day fund was created in 2007. It puts away a minimum of 1 percent of state revenue every fiscal year. The account can be tapped at any time by a 60 percent vote of the Legislature. Or, a simple majority can tap the account in an economic downturn (defined as less than 1 percent forecasted employment growth) or a catastrophic event threatening life or public safety.

House Joint Resolution 4209 has been referred to the House Ways and Means Committee.

# # #

For more information, contact: John Handy, Assistant Director: (360) 786-5758