Washington lawmakers are on their way home this morning. The regular session of the Legislature concluded at midnight with no budget agreement.
With a near $1 billion gap to close, the senators and representatives could not agree on which bills the state will not pay on time. That’s what it has come to.
Among other business left undone is passage of a jobs bill, or bills, that would fund as much as $1.3 billion in construction projects around the state. In Spokane, the priority on everyone’s list is $38.9 million to complete the Biomedical and Health and Sciences Center under construction at the Riverpoint Campus. The building would house the medical school which supporters hope will become the nexus for research and industry.
Money would also be available for other University District projects, expansion at Spokane Community College campuses and more home weatherization.
The measures are intended to partially remedy one of the most unfortunate impacts of the recession – the collapse in construction activity – by exploiting one of its few positive attributes – very favorable interest rates.
Unemployment in some of the construction trades is near 50 percent, a tragedy to the workers affected, many of whom have been idle so long their unemployment benefits have expired. As they sit idle, they become rusty and less prepared for the day a healthier economy will need their skills.
Advocates say more building might create 20,000 jobs.
Meanwhile, the state of Washington has been able to sell bonds at the lowest rates in 50 years: 3.35 percent in the most recent auction. Despite concerns debt payments consume too many state dollars, financial institutions still line up to bid.
State Treasurer James McIntire, as cautious as anyone regarding Washington debt levels, has said he can support a jobs package if one includes a constitutional amendment capping debt and formation of a debt advisory council to provide ongoing advice to the governor and Legislature on an appropriate debt level, both of which were recommended by the Commission on State Debt.
But to sell bonds, you must identify a source of money for repayment, and that’s the keystone not, so far, in place.
With legislators stripping special accounts of cash to prop up the general fund, there is not much loose change to support more bonds. Possible sources include the Public Works Trust Fund and the fees authorized under the Model Toxics Control Act. But, if committed, those will be resources unavailable for other purposes.
The trade-off is worth it. Bidding on construction projects is just as aggressive as bidding for state bonds. The building trades have a surplus of human capital ready for investment, and the state may never get a better deal. But if the Legislature does proceed, the first thing to build is a cap on future bonding.
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