As the host of the fastest growing podcast on
county issues in the state of Washington. Oh,
wait a minute. You're talking about me. I am
talking about you. Welcome to County Connection,
the official podcast of the Washington State
Association of Counties, where we dive into the
legislative issues shaping the future of our
communities. From budgets to public safety, infrastructure
to elections, we'll break down what's happening
in Olympia and how it impacts counties from across
the evergreen state. Stay informed, stay engaged,
and join us as we amplify the voice of Washington's
39 counties. Welcome back, everybody, to the
County Connection podcast, the official podcast
of the Washington State Association of Counties.
I'm Paul Jewell. It is the 25th of April, believe
it or not. Well, it's a little after 4 o 'clock
here in the afternoon, and it's not really a
big day. Well, it is kind of a big day. Today's
another cutoff day, actually. But that's not
what we're here to talk about today. We're here
to talk about the budgets. And I've got Brian
Enslow back in the studio with me. Brian, we
had such a good time talking about the budgets
last year. We did. I figured. Who am I going
to get to talk? Well, of course, I'm going to
call Brian and we're going to hash it out and
we're going to help people understand what's
in the state operating budget proposals in both
the House and the Senate. And by the time they're
done with this podcast, they are going to be
in the know better than anybody, at least in
their own household. That's a bold statement.
Probably on their block. The only thing I will
say is nothing we said last year was definitively
wrong. Or fireable. Or lastly, nor did we receive
like an angry call from someone on it. You know
what they call that? A successful podcast. That's
what I think so too. So that's why we're running
it back, Paul. Let's do it again. That's why
we're doing it again. Let's hope that we get
the same outcome this year. So strangely enough.
I was just listening to a podcast that I recorded
last week that I think we just released today
when I was talking with Brad Banks, who says
hi, by the way. He just gave me a ride back from
a meeting that we had at the Capitol so that
I could get back here quickly. And he wanted
you to know he said hello. Shout out to Brad
Banks. By the way, Brad Banks, notoriously good
driver. Very good driver. Yeah. Although you
don't want to look at his windshield. I don't
know what's going on there. Okay. Cracks everywhere.
That feels like a metaphor. It might be a metaphor.
I don't know. Metaphor for what? I think we're
just going to let the listeners figure that out
for themselves. So budget. Yeah. But I was listening
to the podcast, and we were mentioning how the
budgets were coming out on Sunday. And they did.
Indeed. They came out Sunday afternoon. Yes.
So just a couple of days ago. Very unusual to
see the budgets come out on Sunday. Not so unusual
on the weekends. I've seen one coming out on
Saturdays before, but never before on a Sunday.
You've been around longer. Have you ever seen
that before on a Sunday? No. What we used to
see was a budget introduced on a Monday or a
Tuesday, a press conference. Right. And then
very civilized, like 24 or 48 hours before there
was a hearing. And then what we started to get
more recently was. Budget being released on a
Monday and then being heard minutes after it
was. Yeah, Monday afternoon. Yeah. And so I think
it was Senator Robinson two years ago, maybe,
that first kind of introduced the like, okay,
guys, I am going to give you a sneak preview
before my hearing. Yeah. But it's going to be
on the weekend. Right. And so not great, right?
You know, when you think about families, work
-life balance, things like that. Yeah, not so
fun to be working on a Sunday. No, but. If the
alternative is press conference, then hearing,
I appreciate getting some time. Yeah. And so
they came out Sunday afternoon, about three,
I think was the first one around three, three
30. The other one that was the Senate version,
if I'm not mistaken, the house version came out
about four, four 30. And then they were heard
on Monday. And so this is Wednesday. So this
was two days ago that the hearings actually occurred.
We're a little behind, but we wanted to actually
take some time and dive deeper into these budgets
so we can really understand kind of what's going
on. And there's a lot to talk about here, folks.
Brian. I'm Brian. You're Paul. I'm Paul. They're
the listeners. You're Brian. They're the listeners.
Brian, I hope you've done your homework on this
one because you know a lot more about these budgets
than I do. You worked in the legislature. Were
you a budget writer? Did you work in the budget
office for a while? I was a budget assistant
to two separate governors, Locke administration
and Gregoire administration, as well as being
an in -house budget writer for the House Appropriations
Committee. So you have a good idea of what's
kind of going on behind the scenes with some
of these budgets that the reports that we get,
at least on the fiscal .wa .gov website, don't
necessarily paint the picture real clearly. It's
really hard sometimes. Yeah, it is. And being
on the inside is obviously, one, you're included
in the conversation. So you kind of understand
what's going on. But two, you do see more information
than what is available to the public in terms
of the back end budget systems. And the way that
I'm reading these budgets. You know, there's
a lot of gimmicks here. And I don't use that
term disrespectfully. But there's some accounting
kind of sleights of hand, transfers in, transfers
out, replacement funding here, replacement funding
there. You know, different tricks to push things
out in different ways to have different effects
on the bottom line here on both the revenue side
as well as the expense side. And there are some
pretty... You know, there's strong similarities
between both proposals, but there's also some
pretty stark differences to talk about as well.
From a budget technician's viewpoint, these budgets
are a symphony of creativity when it comes to
figure out how to maximize the resources that
you have at hand. So tricks? No, there's no tricks
here. There's no sleight of hand. There's no
all of those. Terms that you use to impugn the
value of professional staff. These are valid
techniques, strategies. That's what I meant to
say. So as I mentioned last year, and Paul, as
we discussed in our preamble, this is the fastest
growing podcast on county issues in the state
of Washington. So I don't want to assume, I assume
we have a lot of newer listeners. We probably
do. But one of the overarching themes of... of
both of these budgets are that we are in a time
of high inflation where uh um the cost of doing
service has exceeded the revenue that is um currently
being collected and i'm being very click like
revenue's still been pretty fine in fact the
most recent forecast was actually Yeah, it's
like the cost, the rate at which it's increasing
has surpassed the pace at which the revenue is
increasing. Yes, and I perhaps, I did not use
inflation from a pure economic standpoint to
talk up. I should have said the cost of providing
the underlying services. So cost of salaries
and benefits, things like that. Okay, so thank
you for allowing me a little grace on that. And
then the other kind of unique feature that is...
That is kind of baked into that concept where
we've had stable resources. We had a very significant
revenue package that, depending on your one's
math, was in the $8 to $9 billion last year.
continue to grow our bond model and our capital
debt capacity and then of course by adding all
that revenue we we inflated it so what does that
mean brian that means for the last couple years
we have been cash poor and like credit card rich
right we've had all this bond capacity right
but not necessarily the cash on hand right and
so that's some of the interplay that's going
on here And what's interesting about that is,
I mean, that whole credit piece, right, that
debt capacity piece that you're kind of talking
about, it doesn't play out the way that you might
think it would in a supplemental this year because
of some of the valid strategies that they've
utilized in balancing these budgets. I want to
talk mainly. on the operating budgets because
that's where you know the meat of the budget
is the capital budget is projects and things
like that and i know we have members out there
who are probably very interested to see if some
something they wanted funded in the capital budget
got funded but the real story that i want to
focus on is kind of what's happening on the operating
side but it's hard to talk about that without
also kind of at least talking a little bit about
what's happening on the capital yeah because
to my so the senate budget capital budget supplemental
capital budget spends um boy that s was a little
hot there yeah that's gonna pop on that so you're
gonna to our intro no one's gonna like the sound
of my voice on that one the senate capital budget
supplemental spends 700 million in like new stuff
right and then transfers a billion a billion
dollars out yeah so More than half of what's
going on there is being given to the operating
budget. Yeah, so when you look at it, one of
the comments that I had after I read it was,
I've never seen such a skinny supplemental capital
budget in my life. Yes. As far as... There's
not a lot of new there. You'd be surprised how
few pages it takes to go through $700 million
in a state capital budget when you're looking
for new projects and when you're looking for
new expenditures. There's a lot of pages because
there's a lot of crossing out of certain types
of funding and replacing it with other funding
so that transfers can be made right to the operating
budget. But there's just not a lot of substance
compared to what we've seen in the past. Can
I? Can I? Can I take our listeners behind the
curtain a little bit? A little bit, sure. Yeah,
that's what we're here for. It's a little bit
off topic. Yeah, that's what they want to know.
So for the listeners, I represent single local
government entities. And one of the things that
we like is we like pudding, Paul. We like pudding.
Okay. Not literally. I have a feeling that pudding
is an analogy for... Money. Earmarks, which is...
Government funding. Pork. Right. Yeah. You continue
to use language that feels loaded to me, Paul.
Sorry. Ladies and gentlemen, Paul is... It's
been a rough day for everybody. It's been a long
day. It's been a long week. It's going to come
out. Just be glad I'm not recording this on a
Friday this week. And Paul, you would say, how
much pudding? And I would say, more pudding.
Exactly. And no pudding. this year no like none
and you know it's really interesting for dessert
your heart it's really interesting because like
you know the members when they're going to serve
you pudding they like they like to let you know
they want to tell you first and so like i will
get calls yeah and and the other things too is
well they love to take credit for it they want
to they want to be the first and i really appreciate
it and the other thing you can tell like when
you're going to get some pudding because they'll
start asking you questions can we say like cake
or Ice cream. I don't know. I'm not a big pudding
fan. I'm locked on. I'm locked in. Okay. End
of the pudding argument. Porridge? That's too
long of a twist. Yeah, that's terrible. So they'll
ask you questions like, can you do half? Is it
scalable? Is it scalable? What steps would you
take? Who would be out? Who would be in? My phone
did not ring a single time. Like, you know, nothing.
Yeah, mine neither. In fact, the day before I
had a meeting with a legislator who was sponsoring
a proviso, whose idea the proviso actually was,
this legislator asked me to write the proviso.
I won't tell you who it was. But they're like,
Paul, we're not getting your proviso. No, that
wasn't it. She said, have you heard anything?
And I said, well, so -and -so, if you haven't,
there's a good chance that it's not happening
because I haven't heard a darn thing. So that
was not a good sign. And I feel like I was not
alone in that regard. So, yeah. So sorry to take
everyone behind the curtain there. So, yeah,
to your point, Paul. It was slim pickings on
kind of capitalist transportation as well. And
we don't have to talk about it. Well, just to
set the stage, we got, you know, if you were
going to bottom line it, as far as the supplemental
budgets go on the operating side, we got a $79
.9 billion budget proposal from the House. We
got an $80 .2 billion budget proposal from the
Senate. Right. Three hundred thousand or three
hundred million dollars apart. That's it. That's
actually very close. That is very close. Very
close. But that's kind of it starts right there.
Very close. And then it just kind of disperses.
Does that make sense? It kind of there's some
there's there's some there's some similarities,
but then there's some really stark kind of differences
from how it diverges from that very close number.
To the details within the budgets. You know...
There's this report that was named after like
Dave Johnson, Mike Wills. Dave Johnson is still
there, professional staff. But it's a report
that compares where the differences are. And
it's a Mike and Dave report. And I don't know
if they still use it or still call it that. Was
it actually called the Mike and Dave report?
That's what we all call it on staff. That's great.
But you can actually access essentially a version
of the Mike and Dave report on fiscal law, which
is where you compare the two versions and you
see the differences. And it's a really long list
of differences. right now yeah and as you move
along the negotiation that report gets smaller
and smaller and smaller and when so you know
when it gets to zero you're done but a budget
it's not bad from a negotiating standpoint that
the size of the box is agreed on yeah that's
a good start um now you just got to figure out
which pieces and which places right and and generally
some of the largest components are agreed on
on the revenue side. And so, and it looks like
I, so on the revenue, so how do that, on how
you get to how you support that number. And I'm
speaking primarily that both budgets are assuming
revenue from the millionaire's tax. Well, they
are in the four -year outlook. Yes, in the four
-year. Yes, but not in the two -year outlook.
Neither one of them books any dollars in the
two -year outlook. Which is accurate. Yeah. But
big picture on how they make their budget work
over that four -year requirement, which both
of them are still working under. Right. They
have roughly $2 billion in out years on the millionaires.
So let's remind people about this two -year,
four -year thing, right? Fantastic. Because I
think this is really important. Yeah. So we have
a four -year. Budget outlook, but we have a two
-year budget here in Washington. We have a biennial
legislative session. The first year is the long
session. That was last year. We're in the second
year now. That's why it's a supplemental budget
that we're talking about. This is the second
year. It starts June 1 of this year and goes
through. It's close. I'm sorry, July 1. There
we go. Excuse me, of this year. Thanks. No, no.
No, you're right. I knew something sounded wrong.
It ends June 30th, starts July 1, goes through
June 30th of 2027. Yes. So that's the second
year. We're in the second biennium right before
the start of the second fiscal year. So the details
in the budget that we're talking about right
now, that $79 .9 billion, that $80 .2 billion,
that's the two -year budget. That's the general
fund. current or near -term outlook. But our
statutes, our state law requires a four -year
consideration, right? A four -year outlook on
our budget so that... Every legislature has to
look at not just the two -year impacts, but at
least two more years down the road, which is
actually a really good budgeting tool to understand
how the decisions that you're making today will
affect at least two years down the road because
that's the next. That's the start of the next
biennium. So when we're talking about the budget,
a lot of people will talk about it in two -year
terms and in four -year terms. It's really important
to understand which one you're talking about.
The two -year terms is the one where you get
down to the line items. Boom, boom, boom, boom,
boom, boom, boom. The four -year is... not quite
to that level. It's more of an estimate based
on carryover, carryforward, et cetera, and no
new spending necessarily. But that four -year,
so the two out years, the four -year, will change
dramatically with the next biennium. Yes. And
Paul used to really... an important term, which
is carry forward, which is a calculation that
is done with rigor between the governor's budget
office, OFM, and the legislature. And it is more
germane and relevant in a states like Washington
where we do two -year budgets. So for instance,
if you have a program, hypothetical program,
that is budgeted at $100, I'll use a simple number.
Yeah, simple round number. $100 in the first
year of the biennium, but then there's some sort
of policy change and funding change. So in the
second year of the biennium, their funding is
$150. You don't move forward with combining those
two for $250. Your carry forward number would
be $300. Right. Unless, and we'll get to this
later. Because you're assuming that because it
made the change in the second year, that that
second year is now the new. One year standard.
Correct. Right. And you carry those numbers forward.
Plus, I assume some sort of growth factor or
interest, you know, caseload, whatever, based
on some sort of moving average, probably. For
all the super duper budget geeks, the carry forward
step is specifically. as it pertains to the budget
step, is simply that piece, and then the inflationary
stuff is at maintenance level. But in the purpose
of the four -year, there are inflationary factors
included. Yes. Right. And you did a nice job
of cutting me off, but unless it is specifically
indicated in a budget note or something that
it is only one time, which we'll have to come
back to soon on the... on one of the transfers.
And that's interesting because when you, I love
that point because like when you look through,
especially this year's budget documents, there's
a lot of those one time kind of little markers,
I guess, for lack of a better term. And it actually
does say. One time. Yep. We're making this one
time. One time. Or we're making this, the other
one that you see is ongoing. So that's a clear
indicator of what the intent is of the legislature,
right? And they use that when they're looking
at their carry forward numbers and they're doing
their four -year budget outlook. So you made
a really good point. The assumption of the millionaire's
tax is how they balance their four -year budget.
Right. It's how they balance year three and five.
And I think to your point, how they balance year
one and two is transfers. Yes. And so, yeah,
and that difference, that $300 million difference
isn't entirely made up on transfers, but the
Senate transfers like $1 .1 billion, and the
House is around $950 million. So there's $200
million in resources difference right there.
Right. Should we go into it? We should, yeah,
because this is a great example, and there's
numerous examples in both budgets of kind of
how those transfers work or don't work. And then
the other piece, of course, that we need to talk
about is backfilling, which is kind of like transfer,
but a little different. So the house is primarily
made up of two items, and one dwarfs the other
one. significantly and they transfer 880 million
dollars out of the budget stabilization account
which had historically colloquially been referred
to as the rainy day account right so 880 and
then they transfer 75 million out of the public
works assistance account that's right and then
um then they have 20 other they have like they
have like 20 some other transfers that are all
in like the $5 million, the $7 million, and things
like that. So it totals almost $2 ,000 in transfers.
But the ones that are really, I think, for the
purposes of this conversation, worth looking
at are $880 out of the budget stabilization account,
$700. Well, don't forget about the $395 million
from capital gains tax distributions as well.
Both budgets do have both of those in as new
revenue sources. But I guess they're not really
transfers in, and that's what you're focusing
on right now. correct their their new revenue
and i was focusing on transfers but but it's
a really good point to To mention. That was the
one kind of of those additional revenue pieces,
whether it's a transfer of revenue. That was
the kind of one that was really consistent between
both the House and the Senate. Yes. That and
data centers. Yeah. The repeal of. Which was
like, what, 63 million, 64 million, something
like that. Yeah. It's in the 50 to 60 million
dollar range, depending on the budget, this biennium.
And then it's, you know, and then it's in the
double that number next biennium. So 130 million
in the ensuing biennium. So let's. talk about
that budget stabilization account yes first because
that's a really big that's a really big transfer
in right yes and so just to just for level setting
it was it was 880 in the house and it's 750 in
the senate so then the big difference is the
senate takes a lot more out of the public works
assistance account right from a transfer standpoint
how much well they take 375 they do so that's
300 million more than the house does That's a
big number. Yeah, there's some details. Now,
that's on top of, how much did they take last
year? Do you remember? Like $260 million? Wasn't
that the number? Paul, you might have it in your
notes. That's a number I didn't write in the
notes. But it was a significant amount of money
that was taken out of the Public Works Assistance
account. Yeah, I do actually have it in our notes
right here. Oh, great. It was $365 million. $265,
well. Let's see. No, it was $265 million from
the state public works account. But let's see.
Oh, boy. I'm trying to remember my notes here.
I think it was right around $265 million. It
was a big number. Okay. I'll trust you on that
one. Yeah. Even though you can tell my voice
I don't entirely trust you. No, that's pretty
close. That's pretty close. Because when you
add the $375 million to it on the house side,
the total transfer out for the two years, first
year and second year, is over $600 million. So
that actually makes sense. The $265 plus the
$375 would be over $600 million. And so what
has historically been so attractive? to the legislature
broadly with this is it is a cash, it is a combination
of paybacks, you know, like loan repayments,
but also it has cash coming into it, right? It's
not necessarily... general obligation bonds or
hasn't been. Right. And we've had several podcasts
where we've talked about the Public Works Assistance
Account and kind of went into some more detail.
I'm actually hoping to get the director of the
Public Works Board here to go into even greater
detail about kind of the whole history of the
program and how it was developed in Washington
State and why it's such a unique and valuable
program. But we have done kind of that deeper
dive just into what it means and why is it there
and why it's such an attractive place for them
to essentially transfer money from whenever they
have a budget deficit problem. While we're here.
Should we go into the differences in the approach
on how they handle a backfill or no backfill?
Well, we should because that's an important piece
here when you're talking about the difference
between the House and the Senate. Yeah. Right?
The House has got that $75 million transfer out,
and that's it. Yep. Just reaches in, grabs $75
million. So imagine if there's a cookie jar on
the counter, you're opening the lid, and you're
taking out $75 million worth of cookies, stuffing
it in your pocket, and walking away to spend
it. That's it. Or pudding. But I wouldn't put
pudding in my pocket. Don't put pudding in your
pocket. Yeah. I wouldn't put cookies in my pocket
either. I mean, seriously. They're all crumbly,
mixed up. I mean, not to suggest that your mother's
cookies are dry. I think there's an important
life lesson here, though. If you had to choose
if you were going to put cookies in your pocket
or pudding in your pocket, choose cookies. Sure.
That's a good life lesson. Sure. Okay. But the
way the Senate does it. Is they're reaching in
and they're taking $375 million worth of cookies
out. Yes. But they're putting $300 million in
different cookies back in. $340? Something like
that. Yeah. They're not completely replacing
it, but they're coming. They're ultimately. There's
ultimately more money in the public works account
for this biennium in the Senate proposal. Right.
Yes. But it's in the form of new debt. Yeah.
Right. And remember, we talked about this last
year. What are they? Why? I'm still a little
puzzled by the fact that they would take. Undesignated
revenue. Right. That's just money. Right. Like
almost like a fund balance, like a bank account.
Right. That's sitting there. They would take
that. and transfer it into the general fund.
I get that. That's an interesting piece. But
why then replace debt, replace it with debt?
I just, that's very strange to me. It's almost
like I started this podcast intentionally by
saying they're in a milieu of where they are
cash poor, but debt rich. Right, but we're low,
but the... I know. But the, but the, but the,
but the, but the. They're borrowing money to
loan money. And they're borrowing money at a
higher rate. Yes, that's the kicker. Then they
can loan it, right? Because the public works
assistance account is artificially lower. cost
money the rates are one to two percent generally
yes and because it's because it's self -funded
it's our money yeah we're not getting investors
they're not outside folks trying to make money
and it's cash coming in yeah it's cash coming
in right it's a it's a self kind of um uh fulfilling
prophecy in some regards in that it continues
to regenerate and regenerate because we loan
money out they make the payments the money comes
back in we loan the money out it's like an old
savings and loan a little bit right it's all
and it's always been targeted for for local government
entities that don't have the lending power of,
say, one of our larger counties or something
like that. Think of like, it's a wonderful life,
right? The whole, the whole, what was their name?
Jimmy Stewart. Yeah. I'm not going to be your
lifeline on this one. It's an old, sad, depressing
movie. Oh, it's a classic. But anyways. I mean,
look, I'm anti diehard being a Christmas movie.
What I will say is that it might be a Christmas
tradition for your family, but it's not a Christmas
movie. It's nothing to do. Okay. We're not going
to get off on that. but I'm telling you right
now Die Hard is a Christmas movie absolutely
Christmas tradition I'll accept but there's nothing
about and so is the spirit of Christmas there's
no magic in it so is the message is It's a wonderful
life. A bunch of people kill everybody? It's
a Wonderful Life is also a Christmas movie. I
question your morality, my friend. It wasn't
the savings alone, but basically the institution
existed. All right, focus, Brian. Focus, Brian.
The institution existed. Stop talking, Paul.
Let's just go back. Bringing money, lend it out
to people to build homes, to buy homes, right?
That was the whole purpose. And you would get
a small rate of return on that. Same thing with
the Public Works Assistance Account. And it's
our money, right? And it was the community's
money in that case. Here it's our money, and
we're loaning that out to ourselves, to our friends,
you know, cities, counties. They're doing projects.
They're paying it back. Very low, very low rate
of default, right? Almost unheard of low rate
of default, but also a low rate of return, which
makes it very attractive for the communities
because it's low -cost capital. Here we have
the state saying, okay, we're going to take that
money, but we're going to replace it. But we're
going to borrow money at a high rate. higher
rate in order to do that so that we can loan
it out to you guys so you still have your program
but it's actually at a net loss to the state
it's a weird thing to do i the the term i used
in last year's which is i don't think it's accurate
but it i said reverse arbitrage right where you're
like which isn't which isn't accurate but it
gets at that you're that you're loaning money
out at a loss yeah right and this is where that
like one time is really important because it's
been indicated that this is a transaction for
this biennium and it kind of puts us i don't
know if you feel this way it's it we're in a
little bit of a pickle because you've got uh
one proposal that takes 75 million dollars out
yeah just trips it out and one proposal that
has a mechanism that that i think um from from
our point of view does not feel sustainable no
not by any means But in the short run is a better
level of funding. Yeah. And so you're kind of
like, well, it doesn't make sense to us. It doesn't
seem like good dollars and cents, but it comes
closer to keeping us whole. Right. So it is a
little bit of a. I used the word pickle. It's
a little bit of a conundrum of how. It's a quandary
for sure. Oh, that's a much better word. Ladies
and gentlemen, 25 cents in the SAT jar. What
a paradox. So it's a little bit difficult to
like ferret through what makes sense. Yeah, I
don't know how to feel about it. Right? I mean,
as a citizen of the state, I'm like. wait a minute,
you know, this is my money that you're dealing
with. But as, you know, a representative of counties,
I'm like, okay, well, we'll take that deal because
it keeps us, you know, more whole with more resources.
But I don't feel good about it. It's a strange,
it's, yeah. So I think, so that's what's going
on with transfers. I think we've talked about
that a lot. Yeah. Well, I do want to mention.
Do we want to talk about? What? You're giving
me the eyebrow. I am. People can't see the eyebrow,
but you're definitely giving me the eyebrow.
Are you ready to talk about the Climate Commitment
Act yet? Yeah, I want to, but I want to point
out one more thing. Okay, great. So another transfer
that's really important that I don't know if
you caught this, but I did catch it, that $880
million transfer on the House side that comes
out of the budget stabilization account, which
we never really told people what that was. Give
them a few sentences on what the budget stabilization
account is. Oh, I think I said I referred to
it as a rainy day account. Right, it used to
be known as a rainy day account. But there...
When the economy was going really well, sales
tax was generating a lot of excess revenue, and
there was a piece of legislation that put into
place that basically said as money comes in at
a certain rate, some of it's going to spill over
into this account that's outside of the general
fund that is going to be used and not spent and
used when the economy is in a rainy day. Right.
Okay. So different from reserves. It's different
from reserves. And when it was originally construed,
it needed, I think it was a 60 % threshold, much
like a bond, to take money out of it. However,
a couple years ago, some of these very creative
staff asked the question, okay, we know we need
a bipartisan vote to take money out of it. What
if we just don't put the money in it? And so
they were able to - Gotta love staff. But so
when we're doing some go -go years and there
was money that was set aside that's there that
is outside of the kind of fungible cash general
fund state, which is county current expense,
and in another account that has to have some
sort of certain financial triggers in order for
you to - Use it. Theoretically. Yeah. But at
this point, I mean, the majority party's got
the tools and levers. Yeah, pretty strong majority.
So they're going to get what they want in that
regard. The other one I wanted to mention or
the one transfer out of there that I wanted to
mention was on the House side. That's at 880
million. And I don't know if you caught this,
but in the four year. Oh, they transfer money
back in. They do. Yeah. And where does it come
from? Left one. Oh, yes. Yeah. So this is something
that's really interesting that we've been talking
about with our members recently. I don't know
that we've ever brought it up on the podcast,
but I broke my own rule. I can't say left without
saying what it is. And that's the law enforcement
officers and firefighters. And when I say left
one, that's the first pension system. Yeah. That
was created for him. We should have looked this
up, but, but it, but it. It was like late 1970s
was when Left 1 closed. Yeah, it closed sometime
in the late 1970s. They replaced it with Left
2, and now there's Left 3, just like there's
PERS and TERS 1, right? TERS 2, TERS 3. Teachers.
They stopped making contributions in 2000. Yeah.
because the last one was essentially overfunded.
There's a surplus. Yeah. And there's a surplus
currently. The official term is there's a dog
choking wad of money in there. That's not an
official term. Yes, it is. That is a legal certified
accounting, public accounting term. But there's
a lot of money in there. four billion dollars
i can't remember how much the amount is it's
it's an enormous amount of of i'm leaving with
something paul it was it was an underfunded obligation
for many years and uh the the local governments
were putting money in sure at the rate of about
12 percent uh the employees themselves were also
making a contribution a smaller contribution
uh the state was making a contribution but it
was still an unfunded obligation and so in good
years the state made some significant contributions,
plus they've seen enormous gains through investments.
Yeah, yeah. About 70 % of the benefits from Left
1 that have been paid out to date have been paid
out from just the benefits earnings themselves.
So it's been a very good account from that point
of view. Right now - Yeah, we've got a great
state actuary. Yeah. State investment board.
Not actuary, sorry, state investment board. They're
doing a great job. Yeah, they do a great job.
And right now, it's got way more assets than
it needs to meet its obligations. So Paul and
I didn't rehearse this, so this might go poorly.
Because I have a specific answer I want him to
give me. Okay. Paul, what contractual right from
a pension system is a employee or former employee
guaranteed? What, contractual right? So I knew
I shouldn't have done this. I mean, they are
entitled. They're entitled to what? They're entitled
to the benefits that they were. That they basically
signed up for. Yep, correct. Right? And there
was this Ortblat, and I know it's a funny name,
but that's like one of the landstone cases in
this. But basically... There's a way to change
those benefits in the negative, but it's very
hard to do. Sure. But in most cases, and that
court case that you're mentioning was pretty
clear, you have an obligation. As a state, you
have an obligation. You made a deal, essentially,
a contract. Yes. And you have to live up to it.
So... There is a contract that you as an employer
enter with your employee that says you are entitled
to this benefit. Right. No matter what. No matter
what. And I have to put money in to fund it.
Right. And the federal government actually oversees
it. Even the state pension programs, the federal
government oversees. And conversely, other funds
are underfunded. That's right. Okay. So this
gets to kind of the, and the reason why I'm doing
this, I'm just kind of leading this, right? Well,
we've had an underfunded obligation in PERS,
both the PERS 1 and the PERS 2. programs for
many years. In fact, last year was the first
year we didn't have to make extra contributions
to try to make up for that fund deficit. Yeah,
we changed the rate every time and we had rate
smoothing when we knew we had to make a huge
jump, but we didn't want to make the jump all
at one time. But I think for the next four to
six years, it's projected we don't have to do
anything at all. And there's been a lot of talk
about this left one surplus and what to do with
it. There's been a lot of talk about whose money
it is. Well, there's been a lot of talk. And
that's why I brought up like what it is, because
when there's not enough money, I guarantee you
the conversation, it's our job to fill it. Yeah.
But when there's too much, who gets the excess,
right? And of course, you know, you can imagine
the retired law enforcement and firefighters.
have been had been angling for greater benefits
right saying that's our money yeah left two folks
have been saying wait a minute if there's too
much in that one put it in ours right um that
that's been a conversation in the past the same
has been for pers and ters uh and and the underfunded
obligation there the state's been like well we're
we're overfunded here we're underfunded here
let's just move this money over right and that's
been controversial because as you can imagine
people you know when there's a giant pile of
money on the table people tend to argue over
it. Sure. So it looks like they finally have
a plan, though. So for cultural reference, I
was a big fan of The Simpsons growing up. I watched
until, I don't know, season 9 or 10, but there
was an episode that I loved called The Hellfish
Bonanza, which was the older generation, Montgomery
Burns, Abe Simpson. I loved Montgomery Burns.
He was so great. So in the narrative canon of
The Simpsons, they served in World War II, and
they were part of the invasion of... Normandy?
Well, of Europe, largely. And they looted Germany.
And they brought back all of this art and all
this treasure. Oh, no. That's terrible. And the
Hellfish Bonanza was the last one to live was
going to get all the money. Oh, geez. And I think
the parallel I'm drawing here is kind of how
this is. Yeah. Yeah. That someone thought they
were going to get a check for $3 billion. Yeah,
maybe. Well, and the interesting kicker here
is. local governments, counties, and cities are
still on the hook. For what? For left one retiree
benefits related to their medical costs. Yes,
and specifically long -term care. Yeah, and we
pay for that. Which is $150 ,000 a year. And
we pay for it right out of our general fund.
Yeah. We do not have investments. We don't have
a fund somewhere set aside. This literally...
These are onesies, twosies that are decided by
a board, a left board in every single county
made up of left retirees, spouses, that sort
of thing, who actually gets these claims and
makes decisions on whether or not they're reimbursable.
And then the county is obligated to essentially
write a check right then and there to take care
of that. And it doesn't matter what the cost
is. And so the obligation ongoing. is for the
rest of their lives. And there is a significant
number of these retirees still out there. So
as you can imagine, cities and counties have
been watching really closely to see, okay, how
are these conversations going? What is the plan,
et cetera, et cetera? So finally, we have a bill
this year. Yes. 2034? Yeah, Ormsby Bill. It's
going to be heard tomorrow in committee in the
Senate. And it proposes to collapse Left 1. Eliminate
the program, rebuild it under a new left one,
guaranteeing the same benefits to the retirees,
no new contributions, and fund it at 110 % of
its projected obligation. Okay, what does that
mean for the money that's in there? Well, that
means about there's a lot of money. There's billions.
That is available then for other purposes. And
what they propose to do is put $565 million into
the Climate Commitment Act to backfill some funds
that they're using for other purposes. Working
families tax credit. Perhaps. $300 million. And
a couple other things. And then they want to
put the rest into the pension stabilization account
with a note that tells the state treasurer that
the state treasurer has the freedom to transfer
that money from the pension stabilization account
to the state general fund. Which they do in 2029
to backfill the $880 million that they take out
of the budget stabilization account on the House
side. It's wild. Yeah. So where do local governments
fit in on all this? Well, we're actually working
behind the scenes to try to make sure that the
percentage that could be attributable to our
members' contributions. Yeah. also provides some
sort of local benefit. And we're working that
out. I had a really good conversation today with
Joe Fitzgibbon, who's the majority house leader,
the majority leader in the house. And I think
we're going to get a marker in 2034 that actually
talks about. I think we have a fair legal right
to say. That is our money. I think so, too. But
of the billions that are there, the county share
is probably only about $100 million. Yeah. It's
a lot smaller than you'd think. I mean, the deal
that was cut was that we would contribute less
to the employee's pension at the time. Right.
But we were going to pick up medical on the back
end. Right. This is akin to when Whitman and
Walla Walla were fighting over the prison versus
the institution. And at the time, everyone wanted
the prison. Bad deal. Right? Everyone wanted
the prison. Right. Sorry, Walla Walla. Love you.
And we thought it was the good deal. And we had
no idea in the late 60s, whatever, to realize
how much. the medical industrial complex would
grow and how expensive it would be. Well, and
the truth is, because of the advances in modern
medicine, right, and in just longevity and health
and all that good stuff that we invest in, right,
that we're reaping benefits from, the long -term
obligation has been much higher than we thought
that it was going to be. That's just the reality.
And one of the things that we had a good conversation
with Representative Fitzgibbon about, And I know
the cities have had this discussion with him
as well is as part of this whole collapsing of
left one and the recreation of the program and
the movement of the excess revenue, right? The
surplus into different parts over in the state
funds is the state taking on the obligation,
the long -term obligation. for providing medical
into the future. That would actually more than
compensate us for the $100 million share that
we have existing in that fund. And so we're working
to try to get that into 2034. Obviously, that's
a bit of a side road we just took there, but
I think it's a really important piece to kind
of think about and talk about when we're looking
at all the intricacies that are in this budget.
It would be easily the single biggest positive
outcome. In this budget. And in budgets for years.
For sure. Quite frankly. Yeah. And it's just
a nuanced thing that most people don't think
about. But when you look at the actual numbers
and how it comes out on the books and on the
bottom line for everybody, it's a big deal. Yeah.
I know we're running a little long. So we should
probably talk about now what I've been wanting
to talk about. Let's do it. The Climate Commitment
Act triple bank shot. Yeah, see, I know. Triple
bank shot. When we were preparing for this, I
was looking at these budgets, and I'm looking
at them, and I'm going, there's something fishy
going on here with Climate Commitment Act dollars,
specifically natural climate solutions. Now,
there's probably others involved, too, but that's
always the ones that I look at as the NCS funding
component of the CCA, Climate Commitment Act.
I see some transfers. I see some crossing out
of existing funding and replacement with NCS
dollars. I see some money moving from one budget
to the other. And I can't understand it, but
I knew you would. Oh, I mean, when we talk about
art. and craft yeah of like this is it was painting
a picture but i couldn't see the picture you
know those pictures that are like all those graphical
dots and if you have to stand back far enough
you gotta stand like way back here uh and stare
at her for a while like one spot before you can
actually see it so this is that's what i feel
like this is like this is the heat check of all
heat checks this is the like i've hit i know
it's there i just can't see this is like i'm
at paul i'm at the east side club I'm two beers
in. I don't actually drink people. I'm two beers
in. I've got like gimme shelter on the jukebox,
and I am calling my shot, and I'm going to like
bank the eight ball in off of three banks. All
right. Get into it. Tell us about it. Climate
Commitment Act, we know it ultimately is a declining
revenue source, but it's actually a fairly robust
revenue source right now. Really robust right
now. Kind of use it for a lot of things. Yeah.
And it's all about like how can you move the
pieces around? to ultimately get yourself just
a green cash dollar, right? It's almost like
that game, that intelligence test. Now, let's
clarify. When you say get myself a green cash
dollar. General fund, current expense dollar.
So you just mean a flexible dollar. You're not
actually talking like a... organic, natural,
you know, carbon free. I am not talking about
cannabis revenue right now. I didn't mean that.
He did. He did. I was talking about, I was talking
about carbon emissions. No, no, no. We know what
he thinks. All right, that's funny. You got me
on that one. I meant environmentally friendly.
A dollar that you can spend on whatever you want
to spend on. Okay, you're talking just flexible
money. Yeah. All right. That was a long way around.
So Climate Commitment Act. Okay, I don't want
to get stuck in caveats and stuff, but right
now, relatively speaking, it's pretty robust,
and it hasn't all been spent. So in the capital
budget, both capital budgets, House and Senate.
Both. They take Climate Commitment Act dollars
and they backfill bonds at the Department of
Natural Resource. And it's $240 million. They
backfill bonds at DNR? So they go into DNR and
they cross out $240 million in bonds at DNR.
And they replace it with $240 million from the
Climate Commitment Act. And now they take those
bonds, these general obligation bonds, triple
bank shot. That's the first bank shot. Now, bonds,
this is debt. This is debt. This is money they
borrowed. And it's capital budget. So this is
capital budget money that they borrowed. So again,
we're back to this idea of this debt capacity
creating a backfill in an area. Okay. Okay, and
I assume that's the 1168 funding that they're
taking that from. That's the community resilience
and fire suppression and... You've got me on
that one. Yeah, I would assume that's what it
is. Okay. So then they walk those general obligation
bonds, and they take them into the higher ed,
and then they cross out higher education bonds,
240, and they replace them. I'm sorry. Yes. So
they take natural resource bonds, and then they
put them into higher ed bonds, and then they
take those higher ed bonds over to the operating
side. Okay, wait a minute. Whoa, whoa, whoa.
Slow down. Sorry. Slow down. Sorry. Okay, they're
taking triple. They're going into DNR. They already
sold the bonds for whatever they were going to
use, the capital budget, the capital money for
DNR. They're scooping that up. Okay, that's that
state building and construction money, right?
They're replacing an assumption that they're
spending bonds at DNR and they're going to spend
climate. And they're putting climate NCS dollars
in there. Because it's an allowable use. Yeah,
sure. It's an allowable use. Absolutely. And
now I got this free radical. Yep. So now I've
got this bond money that has to be used for.
capital project type stuff should be okay should
be doesn't have to be i mean it's debt capacity
yeah um i've i've replaced it with a different
color money over here but it's an allowed use
and now i'm i'm inserting it into higher ed yes
and i'm inserting it into higher ed capital so
we're talking projects at university of washington
central washington university wsu eastern whatever
Yes. Okay. We can keep naming more colleges.
Well, I just wanted to. I mean, Evergreen? You're
just going to let Evergreen out? Yeah, we can
put Evergreen in there. I mean, I feel like by
omitting, you know. Let's not omit anybody. Okay,
let's hit the community colleges now. All 35
community technical colleges or whatever it is.
South Puget Sound, Centralia, Everett. So then
we went into higher ed. So it goes into higher
ed. So that DNR money, $240 million, is going
into higher ed, replacing what? So higher ed
money that was used for capital purposes. Isn't
it the same money? Or is this money that came
out of... Okay, because there are... Is this
Trustland dollars? Because there's... No. I mean,
higher ed is in the capital budget just like
anybody else, right? Sure. Isn't it all the same
capital budget money? No, it is... I don't know
if I can answer that with the level of specificity
that you're trying to get at. Okay. I'm just
wondering what's the motivation. Why not just
take it and do what you want with it rather than,
for lack of a better term, launder it through
higher ed? Higher ed. To then spend it on operating
dollars and higher ed. Right. You don't know
either. Okay. I don't know. But that's what they're
doing. But that's what they're doing. Yeah. Why?
There's got to be a reason. Probably a very good
reason. It's a roundabout way to essentially
get CCA dollars into the general fund. Yes. By
supplanting... Bonds at one agency, but then...
Yeah, debt limit, essentially, to dump that into
operating. Which goes back to, like I said, it's
almost like... It's that whole, we have money
on the credit card that we can use. Breaks the
one -time... It breaks the cardinal rule. of
fiscally conservative budgeting, which is only
use one time dollars for one time expenses. Never
use one time dollars to incur or support ongoing
obligations. These are unique times, Paul. Tell
it to the judge. I don't know. Why would there
be a judge here? Okay. Okay. Okay. So what do
you think the benefit is here? Just getting that
extra $240 million into the, into the operating
side? Yeah. Yeah. $240 million. I mean, this
sounds stupid, right? Because I grew up in a
very modest household. You might even say poor.
$240 million was an unfathomable number to me.
Yeah, but on an $80 billion base, it's nothing.
It's budget dust. Which is the point I was going
to make. This is going to sound stupid, but isn't
$240 million kind of insignificant in an $80
billion budget? Why go to all that work? Why
go to all that effort? Well, I guess what I would
say is twofold. One. Public work assistance account
is pretty important to us. We're talking about
losing $75 million and that being a huge hit.
Yeah, but we're talking about $75 million for
local government versus the state that eats $80
billion. And I will go back to that. This budget,
in many respects, is balanced by transfers this
year. Or this biennium. And to the point, as
we said, there are some large moving pieces,
but then there's all these other moving pieces
which amount to you and I going through the couch
cushions. Yeah. Right? True. It's Thursday. Payday
is Friday. I want to buy some scratchers at the
Lucky 7, Paul. And I just got to get enough nickels
together. You've mentioned scratchers a few times
on this podcast. How many scratchers do you actually
buy? Have I mentioned scratchers? Yeah, you have.
yeah you're now you're talking the scratch off
lottery tickets right yeah so i don't have powerball
money you were you grew up working poor you were
just trying to say it he did people like like
i know i don't i know yeah no it's legit it's
he's paul's legit yeah um uh scratchers powerball
money but how many scratchers were you buying
a week i'm worried about your scratchers A lot.
Do you? Are you a scratchers guy? No, I'm not.
Oh, you're not. Okay. I actually use... Pull
tabs? Pull tabs? I was going to ask about pull
tabs. See, now we're going off on a tangent again.
But when I was 18, one of the first things I
wanted to do was... Play pull tabs. Play pull
tabs. Yeah. And so I got myself $10, a $10 roll
of quarters. To go play pull tabs. And I kid
you not, I won over a hundred bucks. What? Yeah.
Wish he then spent on Swisher sweets. Probably.
And I'm looking at how old Paul is. Maybe some
school bandits. We didn't have Zins. I don't
remember. Yeah, I'm not going to tell you what
I spent it on. I don't even remember. I know
what you're saying. It's not a lot of money,
but it is a lot of money in the context of...
Yeah, I mean, by anyone's measurement, it's a
lot of money. It's just when you look at it relative
to $80 billion, you go, boy, that seems like
a lot of effort and a lot of work. And I know
we need to wrap up. I've said that twice now.
There are some big pieces that, like this piece,
both capital budgets do this. Both capital budgets
send a lot of money over to the operating side.
The House broke the rules in my mind. And you
say, Brian, what do you mean by that? Yeah, I
was about to say that, actually. So kind of the
rules of the budget are... you have to buy the
bills that you pass off your floor. So if you
pass the bill, you got to pay for it. Yep. And
you can see that sprinkled throughout the budgets
in the various departments and agencies. And
you get to spend the money that you pass off
the floor too. The revenue. So the fact that
the Senate balances their four -year with the
millionaire's tax credit. Seems appropriate to
me. Because it started in the Senate. Well, it
passed off the Senate floor. That's true. So
they get to spend it. And you're saying the House
does the same thing. The House does the same
thing, but they didn't pass a bill. You know
what's interesting, though? They're using money
they haven't passed. Did you notice that the
left one bill, 2034, was also paid for in the
Senate budget? And educate me on this, because
what I saw that there was one small piece of
policy associated with that bill that was. that
was assumed in the budget, but not like the whole,
like 800 million or something. And I had a hard
time finding the transfers, but they, I'll bet
you they're in there somewhere because I, that,
that stood out to me that the same thing that
you're saying right now, right. That both of
them utilize the millionaire's tax revenue in
the four -year outlook to, but to balance their
budgets. Right. And it's just the Senate that's
passed the bill. Yeah. And generally you only
see the house bills. The revenue bills realized
in the House revenue and the House policy bills
paid for in the House budget. And the same for
the Senate. But here you have both of them using
that one revenue bill and you have both of them
funding the policy bill on the left one because
of the excess revenue, right? The surplus that's
going to be utilized. I could tell very quickly
where it was going on the House side. Sure. I'm
sure it's there somewhere on the Senate side,
but it wasn't obvious to me where it was. Yeah,
and so I didn't – I did not see it. That doesn't
mean it's not in there. I didn't have time or
I didn't look for it in the Senate side because
I actually wasn't looking for it because I was
assuming it wouldn't be in there since they haven't
– Right. It's a – And you would assume that because
it's a House bill. I am going to. There is. It's
there is some there's there's a whole we're going
to hear a whole host of members that are deciding
not to run next year. And there'll be and there's
all sorts of just rampant speculation because.
We're lobbyists. We're horrible individuals.
And we just speculate about people's lives and
their futures with no regard. Speak for yourself,
Brian. So Ornsby is one of those. And I have
no inside information. I have not spoken to him
directly about this. But here's what I thought.
And I was like, he's taking the money from Leff?
That guy's not coming back. Not that he needs
to fundraise or anything like that, but I'm like,
that guy's... And like I said, that is someone
who's got the freedom to operate in a certain
way. But on the Senate side, I think most of
them are coming back. So I'm still a little,
maybe not dubious about whether that pension
play is going to move. I don't know, man. The
millionaire's tax feels a little bit done. Yeah.
Well, let's, that's another, that's another podcast.
It is another podcast. And the, the, the clock
is ticking, right? I mean, we've talked about
this a couple of times. I don't know when this
gets posted, but as of today, we're 16 days out.
Yeah. Well, we're, we're 16 days out to signing
dive, but you know, house of, or, you know, final
floor cutoff is next Friday. Yeah. This is Wednesday.
So we've got, you know, what, four days left
in this week. And then, Five days next week.
We're 12 days. We're nine days away. He's doing
math. Yeah. Sorry, guys. I'm looking at some
other things. But we're nine days away from the
final cutoff before they just get to concurrent
and budgets. Right. And so, you know, there's
always a chance that one of these bills still
comes up until Sonny die. Right. Because it's
NTIP. Sure. Which there's a good chance. So,
you know, add another. Well. What is next Friday?
So another seven days to that. And you're right.
You don't have very many days to go. You got,
what, 16 days, something like that before the
end. And that clicking, that ticking clock is
getting louder and louder and louder. Yeah, yeah.
Yeah, I'm starting to sweat like Captain Hook.
Well. I think Paul needed this today, friends.
I think Paul needed this today. It's been a long
one. It's been a fun one. But the conversations
are definitely getting more intense, right? And
the rumor mill is getting more intense. Oh. And
the idea that these budgets were, you know, not
– it's just hard to speculate as to who's coming
and who's going and, you know, what's actually
going to happen by the end of this thing. I've
heard so many rumors so many times in so many
years. Oh, yeah, yeah. You know, that you think
are absolutely the thing and that they're completely
wrong. And then you realize like one person started
some rumor and it circled around. You just never
know. I mean, everything you're hearing could
absolutely be on point. And I'm hearing a lot
of it too. I just, I can never allow myself to
think that way because until you hear it right
from that individual, or they either take action
or they don't, or they adopt that amendment or
they don't, you don't know what they're going
to do. You just flat don't. So, you know, it's
going to be an interesting finish. These budgets
are going to be interesting. You know, these
budgets haven't even... I think they're on their
way. I think they have come out of committees
at this point, right? So the next step is to...
Certainly by the time this is posted. We might
even have a budget off the floor by the time
this is posted. Perhaps. And that's not any...
I'm not impugning the excellent staff at WASAC.
It just takes time and they have to move pretty
quick. They have to move because the next step
is to take them off the floor and then go to
conference. Yep, exactly. So that they can get
together and kind of hash this thing out. The
interesting thing that I just want to mention
on our way out, both budgets... cut children
youth and families oh significantly oh working
families um uh the working families connections
like um child care i didn't say that right right
um um it's w it's it's working connections child
care thank you 680 million yeah it's eliminated
yeah um behavioral health uh gets cut in this
budget um on both sides whether it's the house
or the senate yes um k through 12 education Yes,
the transition to kindergarten program at like
140, the local assistance at 110 million. Higher
education gets hammered in this budget. Yes.
Which has been a little bit of a trend when they've
had some pretty difficult fiscal situations.
If you remember back to the Great Recession,
higher education really took a large load of
the cuts back then as well. Natural Resources
gets cut in both of these budgets as well. That's
consistent across the board. So the only one
that's really a little different is some other
human services on the Senate side. But the Senate
kind of classifies some of their categories a
little different than the House. So it's hard
to see which ones might actually overlap versus
which ones don't. But there is some continuity
and consistency there as well. There's just varying
degrees of cuts. Yeah. And, you know, just to
point on higher ed, right, during the Great Recession,
one of the things that really became they they
the state used to have very tight controls on
tuition authority. Yeah. That's right. And so
you had not an equivalent of basic ed apportionment,
but you had essentially what the state would
pay for a student and then combined with the
tuition authority was expected to cover the cost.
And they basically just delinked that and said,
hey, we're going to pay you this much and then
you guys can figure it out on tuition. And tuition
went way up such that. Trust me, I know. I had
kids going to college a few years later. Pretty
brutal. It was 5 % of the community colleges,
7 % of the regionals, and like 9 % of the UW.
Something like that. And it was year over year
for a while. And it was year over year. And such
that they even had a policy where they had to
ratchet it back. Right. Messed up our whole 529
savings plan. Anyhow, here we are. It's getting
dark. Here we are. We'll see what happens. I
just wanted to point some of those things out.
Those are some other consistencies. And some
of those are kind of surprising, right? That
they decided to make cuts in some of those areas.
Other areas. like state agencies, increases.
State employees. Compensation. Compensation,
up, right? Making new investments there. Corrections
of criminal justice, an area you would think
they would cut. They're actually making some
increases in that area, in both budgets. So there's
just some interesting kind of... You know, a
little bit of intrigue here, something to kind
of think about, you know, kind of look a little
deeper into, et cetera, and maybe ask a few questions,
you know, why. Yeah. You know, what's specifically
going on. And the single, by a factor of almost
10, the single biggest line item investment was
$1 billion for, like, insurance. Yeah. For the
state liability. I don't know if you saw, but
the one liability tort reform bill that we had
going this year is dead. Yeah. So that's not
even moving forward on a policy level. So in
the Senate budget, the single biggest line item
expenditure was $1 billion towards the self -insurance
fund state. And then the next one was a little
over, I think. It was in the $100 million range
for immigrant health care, essentially. Yeah,
well, that's the Medicaid backfills. That was
a big part of the budget. Well, Brian, I feel
like we've talked through a lot of it, and we've
only scratched the surface. I mean, we could
go on and on and on about this, but hopefully
our members have gotten a pretty good... or our
listeners, whoever. You don't have to be a member
to listen to this. But hopefully they've gotten
kind of... Free to everyone. Yeah, a little look
into kind of what's happening behind the scenes
in the budget and a little bit of a flavor for
it. I feel like some of the things that we just
talked about, especially that liability piece
that continues to increase for the state, it's
also been a huge... cost driver for local governments.
We're going to be talking about that as far as
liability reform for state and local governments
for years to come, unfortunately. Yes, we are.
A big subject. Brian, thanks for coming, man.
It's so great to have you here. And your experience
and your depth of knowledge on the budget is
really helpful for me personally to understand
kind of what's going on. With, again, that picture
that I can see is there, but I don't really understand
it all the time when I'm looking through these
documents. So if it's helpful for me, I know
it's really helpful for our members. So I appreciate
it. Well, best part of my day, Paul. Thanks.
I so doubt that. No, it's 100 % true. Well, then
I'm really sorry for me. I kind of feel bad for
you. That's the best part of your day. I'm going
to re -listen to this five times. At least. You
should. It's a little long, though. This one's
a little long. This one's a little long. Well,
thanks, Brian, and thanks to our listeners. Everything
you do out there as far as our members go for
your communities each and every day and the sacrifices
you and your family make, do not go unnoticed.
We appreciate them here at WASAC, and we're sure
that your constituents appreciate them as well.
We hope that you can join us for our next chat,
and until then, take good care. Thanks for tuning
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