Senate backs state rainy day fund

OLYMPIA – The Senate voted Wednesday to authorize the creation of a rainy day fund that would eventually build to a more than $1 billion nest egg for lawmakers to tap into in case of emergency or a downturn in the economy.

The measure passed on a 45-3 vote, with one lawmaker excused. It now heads to the House. If it passes the Legislature, it will be placed on the November ballot as a constitutional amendment to be approved by voters.

A constitutional amendment requires two-thirds approval in both the House and the Senate before it can be sent to voters.

“Every family in Washington state knows what it’s like to have a rainy day,” said Senate Majority Leader Lisa Brown, D-Spokane and sponsor of the measure. “Somebody loses their job, there’s a health emergency, your truck breaks down, a relative from afar is in need. We all know what that’s about, and how comforting it is when you do have a savings account to turn to address those emergencies. This would give us a structural way within our Washington state budgeting process to have that savings account.”

The measure was requested by Gov. Chris Gregoire, who has set aside $262 million as part of her budget proposal. The Legislature is still working on its own budget proposals.

Under the measure, after the initial deposit, the fund would receive automatic deposits of 1 percent of the state’s annual general revenue – more than $130 million a year.

Under normal circumstances, the account could only be tapped by a three-fifths vote of the Legislature. In case of a natural disaster, or if a state of emergency has been declared, the money could be available with a simple majority vote.

If the balance of the account exceeds 10 percent of the general state revenues, the Legislature, with a simple majority vote, can withdraw and deposit the money for education construction projects.

“The state, on behalf of the taxpayers, will plan ahead,” said Sen. Joe Zarelli, R-Ridgefield and co-sponsor of the bill. “That’s extremely important. That, along with good sound budgeting practices, will help the people of this state in the event of economic downturn.”

House Speaker Frank Chopp said there would be a meeting between key House and Senate members next week, as well as the governor’s office, to discuss some sticking points.

“We’re trying to work through how it would be structured,” he said. “The question is how much do you put in a constitutional protected reserve, and then what’s the trigger for accessing that. I’m confident that we’ll be able to work out some agreement.” he said.