$3 billion stimulus plan to make public buildings energy efficient
Sin taxes might be the source of money used to help pay for the $3 billion that state Rep. Hans Dunshee wants to borrow to create 90,000 jobs over the next two years by making state, public school and college buildings more energy efficient.
Dunshee, D-Snohomish, chairman of the House Capital Budget Committee, is gathering support for putting the proposal before voters this fall. He likened the undertaking to the Works Progress Administration of the 1930s, which put many Americans to work during the Great Depression and led to construction of many public buildings still in use today.
“There’s going to be some consternation about doing something of this size, but we need the jobs,” he said Monday. “Let’s do what the WPA did. Let’s put people to work.”
He was right about the consternation.
State Treasurer Jim McIntire said borrowing so much more money would jeopardize the state’s excellent bond rating and could lead to higher interest rates for the state.
“It’s too much,” McIntire said after Dunshee’s lunch hour news conference Monday. “The maximum (the state should borrow) would be $1 billion – and that would be pushing it.”
The state already borrows about $4 billion every two years, mostly for highway projects and school and college buildings, he said. To add $3 billion to that probably would risk a lower credit rating for the state, which means Washington would be paying a higher interest rate, not only on the $3 billion of new loans, but also the other $4 billion the state would be borrowing, he said.
Dunshee’s proposal, embodied in House Bill 2334, would rely partly on the money saved from having more efficient buildings to cover part of the cost of paying back the $3 billion over 20 years. He assumes at full build-out, those buildings would save $80 million a year in lower heating, cooling and other building costs. Half of that would be used to make payments on the debt and the state would get that money by diverting state funding from those schools, colleges and agencies to make payments, he said.
But that won’t be nearly enough to cover the full cost of the debt, which he pegged at about $210 million a year. And he has not yet identified another source of money to make that full payment, he said.
If could be sin taxes – on cigarettes and liquor, for instance – he said. Other legislators are talking about asking voters to raise the state sales tax to raise additional money to offset some budget cuts in the operating budget, he said. If they opt for the sales tax, he might go for sin taxes, he said.
In any case, voters would be asked to approve the new taxes for the $3 billion, he said.
More than $2 billion would be given to the state’s 296 school districts, $100,000 each at a minimum – plus more based on student count. Tacoma, for instance, would get $55 million for energy projects. Federal Way and Puyallup school districts would get about $42 million apiece.
Gov. Chris Gregoire already has publicly endorsed his proposal twice, Dunshee said, and he also has the backing of House Speaker Frank Chopp. Dunshee said he plans to hold a hearing on the bill today and he expects it to clear the House.
His plan is to put the measure on the November ballot. It there is another tax proposal on that same ballot, so be it, he said.
“I would tell them to vote for both,” is the advice he would give to voters, he said.
Right now, the state must pay about $900 million a year just to make payments on its existing loans. That would rise to about $1.1 billion per year after the $3 billion is borrowed.
Said McIntire, “We need to live within our means. Though we clearly have significant capital needs at our schools and universities, borrowed money is a limited resource that should be managed carefully.”
Joseph Turner: 253-597-8436
blogs.thenewstribune.com/politics
How much would school districts get?
Schools statewide would get about $2 billion to pay for energy efficiency projects under a proposal that may go to voters this fall. Here is an estimate of how much local school districts would get.
Auburn$28,426,414
Bethel$34,638,898
Carbonado$436,027
Clover Park$22,398,670
Dieringer$2,509,800
Eatonville$4,050,015
Enumclaw$8,924,837
Federal Way$42,690,314
Fife$6,881,827
Franklin Pierce$14,636,674
North Thurston$26,660,434
Orting$4,471,565
Peninsula$18,170,781
Puyallup$42,097,036
Steilacoom$9,848,600
Tacoma$55,784,726
University Place$10,604,470
White River$8,088,885
Yelm$10,665,776
