Initiative votes will hit budget balancing act

Washington voters “spoke” again Tuesday. But their message was far from clear for the Legislature as it wrestles with a new $2 billion budget gap.

Any tax revenue the state stands to gain from Initiative 1183 – the liquor-privatization measure backed by Costco – could be wiped out by a new revenue forecast due Thursday, not to mention a home-care training initiative that adds state obligations without adding revenues to pay for them.

“I don’t see a connection between the election and what we are trying to deal with,’’ said state Sen. Ed Murray of Seattle, who chairs the Senate Ways and Means Committee. He and other budget writers have been working for several weeks on solutions that could include new revenues, an option that Gov. Chris Gregoire supports.

Murray said he expects the revenue forecast to drop by “$100 million or so.’’ If anything, he said voters made the state’s difficult budget problem harder to solve by passing I-1163, which boosts training requirements for the state’s 50,000 home-care aides.

The price tag for training caregivers of Medicaid clients is estimated at $18 million in state funds over the next 1½ years. Another $14 million in costs are covered by federal matching dollars and new fees for home-care aides that earn certification.

Under I-1163, Washington becomes the only state to require an exam for home-care-aide certification, according to Jodi Katz, spokeswoman for Prometric, a Maryland-based consultant that helped Washington develop a certification exam last year.

Republican Rep. Gary Alexander of Thurston County said he expects the state to pay for its share of I-1163, and not postpone its requirements. Alexander and Republican Sen. Joseph Zarelli of Ridgefield say it will be hard to find votes to delay it so soon after voters supported it by a nearly 2-to-1 margin.

The Service Employees International Union Healthcare 775 Northwest sponsored I-1163 and says lawmakers must listen to voters. But opponents have already been lobbying to suspend, if not kill, it.

“SEIU’s victory will be short lived and hollow. … We will immediately begin communicating with (Gregoire) and lawmakers, urging them to suspend the initiative,” said Cindi Laws, executive director of the Washington State Residential Care Council and chair of the No on 1163 campaign in a statement.

Lawmakers postponed I-1029, the previous SEIU training measure, two times. And Laws said winning a third delay “won’t be a hard sell” – despite the requirement that two-thirds of the Legislature must agree.

But House Ways and Means Committee chairman Ross Hunter, D-­Medina, said bluntly: “What’ll happen is it will get funded. I don’t think we have two-thirds to overturn it.’’

Sen. Murray said he does see one way I-1163 could be put on hold – if lawmakers are willing to suspend the year-old Initiative 1053, Tim Eyman’s brainchild from the 2010 election. I-1053 requires two-thirds votes to raise taxes or close tax exemptions, but also lets tax questions go to the ballot if lawmakers can muster only a simple majority vote.

“If the Legislature is unwilling to suspend Tim Eyman’s two-thirds initiative, it would be somewhat hypocritical to turn around and suspend the home-care initiative,’’ Murray said.

Rep. Alexander said lawmakers should consider other election messages, such as looking for efficiencies in government and farming out some jobs to the private sector. Alexander said passage of I-1183, which yanks liquor sales out of the state’s hands and gives them to businesses, is a sign that voters want the state government to reduce its activities if the private sector can do them better.

Alexander said there might be similar opportunities for putting work out to bid in the areas of state printing, running the state motor pool, and operating the state’s interoffice mail system.

There also is a cash dividend from passage of I-1183. An estimate from the governor’s Office of Financial Management shows the state could earn roughly $56 million to $68 million extra on liquor sales by mid-2013, depending on the price markup. Licensing fees and profits from selling of state-owned assets could bring in other dollars.

But on balance, the net effect of passing I-1183 and I-1163 is to add only a slight uptick in expected revenues in the short term, according to state revenue forecaster Arun Raha.

Raha outlines his new quarterly revenue forecast Thursday morning in Olympia. He said tax collections since September have been holding close to his last forecast. But the risk of future revenue losses is higher than before because of uncertainty over Europe’s sovereign debt, especially in Italy.

Another wrinkle: A new caseloads forecast due on Wednesday will add costs if there is an increase in the number of kids in public schools and foster care – or the number of adults in prison, on welfare or on state-subsidized health care – goes up.

Brad Shannon: 360-753-1688

bshannon@theolympian.com

www.theolympian.com/politicsblog