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Spin Control

Budget idea not a gimmick, gov’s office says

OLYMPIA — A proposal to free up about $238 million for the state's troubled operating budget reported earlier today isn't a gimmick, it's a “business modernization proposal” that is made possible by the change of technology from hand-written account books to electronic funds transfers.

Basically, it's a result of the state collecting sales taxes every day, setting them aside in separate accounts, and paying them out to the cities and counties on a monthly basis.

Rather than try to describe the accounting ins and outs ourselves, we've posted the explainer the governor's office sent out inside the blog. Click here to read it.


Modernized Business Practices Free Up $238 Million in State Funds

Under current procedures, when the state collects sales taxes, the local portion of those taxes are deposited daily into a separate account for later distribution to cities, counties and other local governments.  Though the money comes in daily, distributions are made to local governments on the last working day of each month.

Because the Department of Revenue needs several weeks to reconcile tax collections and returns with what is due to the more than 350 local governments, the current practice of making daily deposits actually results in nearly two months worth of collections sitting in the distribution account.  This system was created decades ago, when the reconciliation process was done manually on paper; making daily deposits assured that funds were always available for distribution.

Today, the state’s accounting and treasury systems are automated so making an electronic fund transfer takes seconds. The state no longer needs to deposit funds into the distribution accounton a daily basis.  Rather, we can make the deposit into the account when distributions are made to local governments.  This change allows approximately $238 million to remain in the state General Fund, but does not impact the timing or amount of distributions to local governments. 

Technology allows us to modernize these business practices.  By making this permanent change to the process, there is a one-time advantage to the General Fund that will not need to be paid back


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About this blog

Jim Camden is a veteran political reporter for The Spokesman-Review.


Jonathan Brunt is an enterprise reporter for The Spokesman-Review.


Kip Hill is a general assignments reporter for The Spokesman-Review.

Nick Deshais covers Spokane City Hall for The Spokesman-Review.

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