Municipal bond holders have agreed to give the Wenatchee Events Center Public Facilities District (PFD) one more week before entering into full-scale default to allow time for the Legislature to reach agreement on a $42 million loan to pay off the bonds. The bonds technically went into default at 10 a.m. yesterday.
Working through the state Treasurer’s office, the city of Wenatcheehas agreed to pay the bondholders $6,100 a day to delay default for a few days.
Because the default deadline has passed, a new bill has been written because the original bill title was to prevent default. The new bill does exactly the same as the original legislation. It would provide a bridge loan to the PFD using local sales tax money from the state’s local sales and use tax account.. The terms of the loan also remain the same, with a high interest rate, and the ability of the state to garnish local sales tax receipts if the PFD fails to repay the state on time.
The new bill is working its way through the maze of committees as local lawmakers lobby for approval. Representative Mike Armstrong has said it is his hope to pass the bill on Monday and send it to the Senate – and then get this legislation to the governor by early next week.
CLOSING A $2 BILLION BUDGET GAP: In the first days of the special session earlier this week, lawmakers were met with protesters who were made up of several groups, including unions and the “Occupy” group. Many came with the intent of disrupting the legislative process. And for a while during the committee hearing on the Wenatchee bill, they were so loud that the hearing was adjourned while the State Patrol and Capitol security removed the protesters from the building. Many are calling for the Legislature to adopt the governor’s proposal to increase the state portion of the sales tax by a half-billion dollars. I believe tax increases are the wrong direction for our state at a time when unemployment is still very high and our economy is still very fragile. The fact is, the state is expected to take in an additional $2 billion in revenue over the previous biennium. I’m also not convinced that the governor’s agencies‘ budgets have been scrubbed. Latest figures show the total operating budgets of each of these departments have INCREASED by the following amounts over the previous budget cycle:
o Agriculture - UP 8.2 percent;
o Natural Resources – UP 7.6 percent;
o Ecology - UP 10 percent;
o Department of Parks and Recreation – UP 12.2 percent; and
o Fish and Wildlife – UP 14.8 percent.
This shows the Legislature has its spending priorities in the wrong order, especially when the governor is holding education, public safety, and funding for the developmentally disabled hostage for a tax increase – while at the same time increasing funding for parks and fish. It’s time for the Legislature to reprioritize the budget to ensure essential core services are taken care of first.
Ø NO INCREASE ON WORKERS’ COMPENSATION RATES: I was very pleased to hear the Department of Labor and Industries has decided to forgo a planned 2.5 percent hike in workers’ compensation rates. As a result, premiums will stay the same in 2012. This will be helpful to our local businesses that are struggling in this economy. The announcement was made yesterday by the director of L&I and the governor. The decision was made largely because of intense opposition voiced by citizens and businesses across the state who pointed out the economy is still fragile and a rate hike could delay economic recovery.