SENATE BILL REPORT

SB 5206

BYSenators Gaspard and McDonald

Changing provisions relating to the economic and revenue forecast council.

Senate Committee on Ways & Means

Senate Hearing Date(s):February 16, 1989; February 21, 1989

Majority Report:  That Substitute Senate Bill No. 5206 be substituted therefor, and the substitute bill do pass.

      Signed by Senators McDonald, Chairman; Craswell, Vice Chairman; Amondson, Bailey, Bauer, Bluechel, Cantu, Gaspard, Hayner, Matson, Newhouse, Niemi, Owen, Smith, Talmadge, Warnke, Williams, Wojahn.

Senate Staff:Bill Freund (786-7715)

                  February 22, 1989

AS REPORTED BY COMMITTEE ON WAYS & MEANS, FEBRUARY 21, 1989

BACKGROUND:

Prior to 1984, state revenue forecasts were prepared by the Office of Financial Management.  In the 1981-83 biennium, there were six downward adjustments in the revenue forecast amounting to almost $1.6 billion.  These adjustments required numerous legislative actions increasing taxes and cutting budgets.

As a result of this experience, the forecasting process was changed in 1984 by establishment of the Economic and Revenue Forecast Council.  This six-member council is comprised of one member of each party from the House and Senate and two members appointed by the Governor.

The council's staff is located in the Department of Revenue. A forecast supervisor is hired by the Director of the Department of Revenue with the approval of five members of the council.  The supervisor serves for a three-year term and may be rehired following each term.  The supervisor is responsible for hiring additional staff.  The supervisor and staff are exempt from civil service but their salaries are established by the Department of Personnel.

A 1983 bill changing the forecasting process was vetoed.  The bill enacted in 1984 was similar to the 1983 bill.  In the 1983 bill, the supervisor and council staff were not under the jurisdiction of the Department of Revenue.

SUMMARY:

Administration of the supervisor and staff of the Economic and Revenue Forecast Council is transferred from the Department of Revenue to the the council. 

The assets, budget and staff of the Department that pertain to the council are transferred to the council. 

At the end of the first year of each three-year term of the supervisor, the council may establish a new three-year term. The council is authorized to fix the compensation of the supervisor.

EFFECT OF PROPOSED SUBSTITUTE:

The staff of the Economic and Revenue Forecast Council is required to co-locate with the tax research section of the department, and to share information, data, and files without duplication of functions.

Appropriation:    none

Revenue:    none

Fiscal Note:      available

Effective Date:The bill contains an emergency clause and takes effect July 1, 1989.

Senate Committee - Testified: Bill Wilkerson, Director, Department of Revenue