BILL REQ. #:  S-3324.1 

Read first time 01/09/12.   Referred to Committee on Ways & Means.

     AN ACT Relating to greater governmental fiscal responsibility through limitations on expenditures; and amending RCW 43.135.010 and 43.135.025.

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

Sec. 1   RCW 43.135.010 and 2005 c 72 s 3 are each amended to read as follows:
     The people of the state of Washington hereby find and declare:
     (1) The continuing increases in our state tax burden and the corresponding growth of state government is contrary to the interest of the people of the state of Washington.
     (2) It is necessary to limit the rate of growth of state government while assuring adequate funding of essential services, including basic education as defined by the legislature.
     (3) The current budgetary system in the state of Washington lacks stability. The system encourages crisis budgeting and results in cutbacks during lean years and overspending during surplus years.
     (4) It is therefore the intent of this chapter to:
     (a) Establish a limit on state expenditures that will assure that the growth rate of state expenditures does not exceed the growth rate ((in Washington personal income)) of inflation and state population;
     (b) Assure that local governments are provided funds adequate to render those services deemed essential by their citizens;
     (c) Assure that the state does not impose responsibility on local governments for new programs or increased levels of service under existing programs unless the costs thereof are paid by the state;
     (d) Provide for adjustment of the limit when costs of a program are transferred between the state and another political entity;
     (e) Establish a procedure for exceeding this limit in emergency situations;
     (f) Provide for voter approval of tax increases; and
     (g) Avoid overfunding and underfunding state programs by providing stability, consistency, and long-range planning.

Sec. 2   RCW 43.135.025 and 2009 c 479 s 35 are each amended to read as follows:
     (1) The state shall not expend from the general fund during any fiscal year state moneys in excess of the state expenditure limit established under this chapter.
     (2) Except pursuant to a declaration of emergency under RCW ((43.135.035)) 43.135.034 or pursuant to an appropriation under RCW 43.135.045(2), the state treasurer shall not issue or redeem any check, warrant, or voucher that will result in a state general fund expenditure for any fiscal year in excess of the state expenditure limit established under this chapter. A violation of this subsection constitutes a violation of RCW 43.88.290 and shall subject the state treasurer to the penalties provided in RCW 43.88.300.
     (3) The state expenditure limit for any fiscal year shall be the previous fiscal year's state expenditure limit increased by a percentage rate that equals the fiscal growth factor.
     (4) For purposes of computing the state expenditure limit for the fiscal year beginning July 1, ((2009)) 2013, the phrase "the previous fiscal year's state expenditure limit" means the total state expenditures from the state general fund((, the public safety and education account, the health services account, the violence reduction and drug enforcement account, the student achievement fund, the water quality account, and the equal justice subaccount)) and related funds, not including federal funds, for the fiscal year beginning July 1, ((2008)) 2012, plus the fiscal growth factor.
     (5) A state expenditure limit committee is established for the purpose of determining and adjusting the state expenditure limit as provided in this chapter. The members of the state expenditure limit committee are the director of financial management, the attorney general or the attorney general's designee, and the chairs and ranking minority members of the senate committee on ways and means and the house of representatives committee on ways and means. All actions of the state expenditure limit committee taken pursuant to this chapter require an affirmative vote of at least four members.
     (6) Each November, the state expenditure limit committee shall adjust the expenditure limit for the preceding fiscal year based on actual expenditures and known changes in the fiscal growth factor and then project an expenditure limit for the next two fiscal years. If, by November 30th, the state expenditure limit committee has not adopted the expenditure limit adjustment and projected expenditure limit as provided in subsection (5) of this section, the attorney general or his or her designee shall adjust or project the expenditure limit, as necessary.
     (7) "Fiscal growth factor" means the average ((growth in state personal income for the prior ten fiscal years)) of the sum of inflation and state population change for each of the prior three fiscal years.
     (8) "Inflation" means the percentage change in the implicit price deflator for the United States for each fiscal year as published by the federal bureau of labor statistics.
     (9) "Population change" means the percentage change in state population for each fiscal year as reported by the office of financial management.
     (10) "General fund" means the state general fund.
     (11) "Related funds" means the education legacy trust account and the Washington opportunity pathways account.