BILL REQ. #:  H-0962.1 

Read first time 01/21/11.   Referred to Committee on Ways & Means.

     AN ACT Relating to sustainable operating budgets; adding new sections to chapter 43.88 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   INTENT. The legislature finds that the citizens of Washington state are best served by enacting sustainable operating budgets that: (1) Focus on the critical programs and services best provided by government; (2) provide greater continuity in providing these programs and services over time; and (3) are better able to accommodate economic downturns.

NEW SECTION.  Sec. 2   DEFINITIONS. The definitions in this section apply throughout sections 3 and 4 of this act unless the context clearly requires otherwise.
     (1) "Ensuing biennium" has the same meaning as defined in RCW 43.88.020(7).
     (2) "Maintenance level" means the cost of maintaining the ensuing biennium's service levels into the next following biennium, including bow waves, mandatory rate changes, and entitlement caseload changes, plus projected traditional policy level items, such as employee compensation adjustments and pension cost increases.
     (3) "Near general fund" means the state general fund, pension funding stabilization account, and the education legacy trust account.
     (4) "Next following biennium" means the fiscal biennium after the ensuing biennium.
     (5) "Operating budget" means the omnibus operating appropriations act, or any combination of acts that make appropriations for operating budget purposes.

NEW SECTION.  Sec. 3   UNSUSTAINABLE BUDGETS PROHIBITED. (1) The governor may not propose, and the legislature may not enact, any operating budget that is unsustainable in either the ensuing biennium, or the next following biennium, or both.
     (2) An operating budget is unsustainable in the ensuing biennium when, if enacted, it would result in appropriations that exceed the total of:
     (a) Forecasted revenue plus beginning fund balances for the near general fund; and
     (b) Any portion of the projected ending fund balance in the budget stabilization account that may be withdrawn under Article VII, section 12(d) (i) or (ii) of the state Constitution.
     (3) An operating budget is unsustainable in the next following biennium when the maintenance level projection for that next following biennium exceeds the total of:
     (a) Forecasted revenues plus the projected beginning balances for the near general fund; and
     (b) Any portion of the projected ending fund balance in the budget stabilization account that may be withdrawn under Article VII, section 12(d) (i) or (ii) of the state Constitution.
     (4) Nothing in this section requires the legislature to include funding for any specific item in its budget.
     (5) Whether the budget documents proposed by the governor are sustainable is determined according to information set forth in the four-year outlook prepared by the office of financial management under section 4(1) of this act. Whether the budget enacted by the legislature is determined according to the information set forth in the adjusted four-year outlook prepared by the legislative committees under section 4(2) of this act.

NEW SECTION.  Sec. 4   FOUR-YEAR BUDGET OUTLOOKS REQUIRED. (1) When the governor submits his or her operating budget documents to the legislature as provided in RCW 43.88.030 and 43.88.060, the office of financial management shall simultaneously publish a four-year outlook that is based on the governor's budget documents. The revenue and caseload projections used in the four-year outlook must be based on the most recent official forecasts adopted by the economic and revenue forecast council and the caseload forecast council, adjusted by the office of financial management for policy changes made in the governor's budget documents.
     (2) Before the house of representatives or the senate or any standing committee of either house of the legislature may vote on an operating budget, the respective house's fiscal committee that has jurisdiction over the operating budget shall publish a summary document estimating how that operating budget proposal changes the office of financial management's four-year outlook published under subsection (1) of this section. The summary document must be updated to reflect the most current forecast revisions adopted by the economic and revenue forecast council and the caseload forecast council. For purposes of this subsection, "vote" means the vote on a majority recommendation in the case of a legislative committee and the vote on third reading in the case of either the senate or the house of representatives.
     (3) The four-year outlook developed under subsection (1) of this section and adjusted under subsection (2) of this section must include an estimate of all budget decisions for which no specific funding source is identified and for programs with a delayed effective date.

NEW SECTION.  Sec. 5   Sections 2 through 4 of this act are each added to chapter 43.88 RCW.