by Matt Rosenberg October 21st, 2012
One more decision facing Washington voters as they mull their mail-in ballots and state Voters’ Guides at their kitchen counters and dining tables in the days prior to the Nov. 6 Election Day deadline, is whether to tighten the state’s borrowing limit and change the way the state’s debt is calculated. Like most other states, Washington borrows billions of dollars each year, not for regular staffing and operations, but mainly to help pay for building or repairing physical structures such as schools, university and college buildings, water and wastewater treatment facilities, and state roads and highways.
In this case the ballot measure comes not from an outside advocacy group but from the legislature, in the form of a proposed amendment to the state constitution, Engrossed Senate Joint Resolution 8221. Starting July 1, 2014 it would it would in stages ratchet down the state’s debt limit from nine percent of general state revenues to eight. It would also redefine how to calculate general state revenues, shifting to a six-year average from the current three years. Finally, ESJR 8221 would add property tax revenues collected by the state – and directed to education – to be counted as part of the state’s general revenues. The proposed constitutional amendment stems from the recommendations of a special commission which last December issued a report on managing Washington state public debt in the future.
According to information from Moody’s debt rating service, presented to the Washington State Transportation Commission last week by the Washington Office of the State Treasurer, the state in 2011 had $17.6 billion in net tax-supported debt, ranking eighth of 50 states. That was more than four times the median level of other states, $4.2 billion.
The Moody’s nationwide 2011 data reveals Washington net tax-supported debt also ranked high versus other states by several other yardsticks.
Washington State Treasurer James McIntire, a Democrat, and a bi-partisan group of state lawmakers prepared the argument in favor of the measure in the State of Washington Voters’ Pamphlet. The argument in opposition was fashioned by two Democratic lawmakers, two labor union officials and the head of an architects’ trade group state chapter. Opponents say it will limit important investment in infrastructure and put more school and other construction funding burdens on local governments through induced use of higher-interest bonds. They also contend 8221 would hurt job creation.
Backers say the resolution will smooth out peaks and valleys in state borrowing levels resulting from sharp changes in the economy, and reduce the share of operating budget funds used to pay principal and interest on loans. That will help preserve the state’s strong credit rating, limiting the risk of a costly credit downgrading, they say.
Following, from Washington State’s non-profit public affairs channel TVW, and in partnership with the office of Secretary of State Sam Reed, are Video Voters Guide statements for and against ESJR 8221. Speaking first and in support is State Treasurer McIntire. He is followed by opponent Jeff Johnson, President of the Washington State Labor Council, AFL-CIO.
Another debate about the measure can be found at the Washington Living Voters Guide, an annual crowd-sourced effort organized by of the University of Washington’s UW Engage project, and the City Club of Seattle.