HJR 4202

HJR 4202

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Brief Description: Creating the budget stabilization account in the state Constitution.

Sponsors: Representatives Hunter, McIntire, Ormsby, B. Sullivan, Linville, VanDeWege, P. Sullivan, Green, Morrell, Springer, Rolfes, Kelley, Wallace and Eddy; by request of Governor Gregoire.

Background:

Initiative 601, adopted by the voters in 1993, established by statute a state General Fund (GFS) expenditure limit and created the Emergency Reserve Fund. All GFS revenues in excess of the state expenditure limit are deposited in the Emergency Reserve Fund. (After July 1, 2007, GFS revenues in excess of GFS's proportionate share of expenditures from the GFS and related funds will be deposited in the Emergency Reserve Fund.) Appropriations from the Emergency Reserve Fund require a two-thirds vote of both houses of the Legislature.

I-601 established an expenditure limit that applies to the state General Fund, and, after July 1, 2007, also to certain related funds. Under the expenditure limit laws, the limit is lowered if moneys are transferred from the General Fund or a related fund to another fund or account, or if program costs are shifted from the General Fund or a related fund to another fund or account.

The term "general state revenues" is defined in the state Constitution as being all state revenues that are not dedicated to a particular purpose. General state revenues thus consist of all revenues to the state General Fund, with the exception of property tax revenues, which are dedicated to the common school system.

Summary of Bill:
The state Constitution is amended to establish a Budget Stabilization Account. Each fiscal year, 1 percent of general state revenues are deposited in the Budget Stabilization Account.

Moneys may be appropriated from the Budget Stabilization Account by a constitutional majority vote of each house of the Legislature if: (1) Forecasted state employment growth for any fiscal year is less than 1 percent; (2) the Governor declares an emergency and that immediate action is required to preserve public health, protect life, or protect public property; or (3) the Governor proclaims a state of emergency as authorized by statute.

Other withdrawals from the Budget Stabilization Account may be made only by a three-fifths vote of each house of the Legislature.

The Budget Stabilization Account retains its own investment earnings. To the extent that the balance of the Budget Stabilization Account exceeds 10 percent of general state revenues, the excess balance is deposited in the Education Construction Fund (which is statutorily dedicated to K-12 and higher education construction projects).

Employment forecasts and revenue estimates for the Budget Stabilization Account are made by the Economic and Revenue Forecast Council.

The Legislature may enact legislation to implement the Constitutional amendment.

Washington State House of Representatives Office of Program Research	BILL ANALYSIS

Appropriations Committee