The state Senate has approved two bills that free up more than $500 million to help reduce Washington’s massive budget shortfall, as lawmakers move into the final scheduled week of the legislative session.
The largest chunk of money approved Sunday was some $430 million in deferred state pension payments, achieved by changing various formulas that determine how much money flows into pension investment accounts. The skipped payments are part of a huge amount of one-time money Democrats need to balance the budget, which is running a roughly $9 billion shortfall between projected revenue and spending through mid-2011.
The second bill factoring into the budget solution forces construction contractors to give up their wholesale tax exemption, switching instead to a sales tax rebate on materials and services that are resold to their customers. The contractor rebate plan is expected to raise about $105 million over two years, which will help Senate and House budget negotiators avoid deeper cuts to public services.
Democratic supporters said the plan would cut down on fraud in the system, stopping dishonest contractors from avoiding the sales tax on purchases that aren’t ultimately resold as intended.
Both bills now go to the state House for consideration. Legislators likely need to have a budget deal agreed to by Wednesday to meet their scheduled Sunday deadline for adjournment.
The Associated Press
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