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June 16, 2011

Dear Friends,

After a 103-day regular legislative session and a 30-day special session the Legislature concluded its business on May 25. Many of you engaged in the process and I am deeply grateful. I have shared with you my frustration that the Legislature was unable to finish on time at the expense of the taxpayers. However, we are finished and I look forward to spending time in the wonderful communities of the 10th District and meeting with constituents. There are plenty of issues to update you on with the conclusion of the special session, and I'd like to highlight a few –  including some good, solid work on issues of importance, as well as the lost opportunity to make structural reforms in how we govern. While I did not support the budget and we could have done more for employers and job creation, there was serious, diligent and effective work done in a bipartisan way on a number of important issues – including workers' compensation, unemployment insurance and the capital budget legislation.

Operating budget

The operating budget passed mainly on a party line vote in the House with two Democrats and all the Republicans voting against it. My vote against the measure was very simple:

• It cuts K-12 education by $1.7 billion. In fact, 41 percent of the reductions in this budget from come from education.
• It reduces teachers' salaries by 1.9 percent and puts the burden of the reduction on the local school districts.
• It transfers $204 million out of the education construction account.
• It puts public safety at risk by removing 2,119 offenders from active community supervision.
• It cuts 86 community corrections workers in addition to 385 community corrections employees being cut over the past two years.
• Medicaid funding is reduced, as well as substantial reductions in programs for our developmentally disabled and long-term care facilities.
• It spends almost $5 million on the Commute Trip Reduction program which pays people to carpool.
• The sale of the governor's airplanes is canceled. It costs approximately $500,000 a year to maintain and operate each one.
• A program that pays the rent for recently released felons is expanded.
• 49 new or increased fees are included in the budget costing taxpayers about $248 million.

All these factors, plus the fact it is not sustainable and lacks systemic reform, contributed to my “no” vote. Our budget situation put us in a position to finally implement some real government reforms and provide some fiscal responsibility and stability. I view this as a missed opportunity.

Capital budget

We passed a package of capital “construction” budget bills that fund projects through cash accounts, bonds and sets a statutory debt limit over time. As a member of the Capital Budget Committee I was very active in the negotiations of these bills and supported all three measures. While the burgeoning government debt at all levels – local, state and federal governments has many of us concerned, the construction budget is reasonable and conservative. We stayed under our debt ceiling by a significant amount and prioritized projects. The construction package provides infrastructure for K-12 education, higher education, correction facilities and provides maintenance and repair where it is needed most. It protects our investments in the state's infrastructure.

House Bill 1497 includes projects funded by cash accounts in the capital budget. It passed the House 94-0.

House Bill 2020 includes bond authorization and projects funded by those bonds, paid out over 25 years. It passed the House 84-10.

Senate Bill 5181 sets a statutory debt limit reduction from 8.75 percent to 7.75 percent by 2020. It passed the House 79-14. It takes a holistic look at our debt issue and takes an important step toward lowering our debt limit permanently.

Workers' compensation reform

The most contentious issue this session may have been workers' compensation reform, but we are able to pass a bipartisan bill House Bill 2123. The measure will:

• allow negotiated, voluntary structured settlements for workers over age 55, reduced to 50 in 2016;
• offset any permanent partial disability received from the final settlement;
• incentivize return to work sooner by providing subsidies for employers to allow for light duty or transitional work options for employees;
• significantly reduce rate increases in 2012 and beyond for employers;
• provide payments for continued medical treatments and reopening of claims if medical condition gets worse;
• freeze cost of living adjustments for one year; and
• create a rainy day fund to prevent future drastic rate increases.

This legislation is also projected to save $1.12 billion in four years. There are some unknowns with structured settlement agreements since no other state uses  this type of structured agreement as an option. However, it is a good start in addressing our faltering workers' compensation system while also protecting injured workers.

The key to enhancing our business climate is improving our state's competitiveness. Our workers' compensation system is a big disadvantage for employers and businesses looking to locate or expand in Washington. The rising costs of workers' compensation have become unsustainable for many employers struggling to keep their doors open and retain jobs.

The reason this reform is needed is simple. We have one of the highest workers' compensation pension rates in the country and our system is facing insolvency. Total workers' compensation benefits paid in Washington increased 70 percent from 1998 to 2008, compared to 34 percent growth for all other states over the same time period. The measure passed by a vote of 69-26.

District office, meetings, speaking engagements

Now that the session is over, I am working out of my district office. We are located in Coupeville at 22 Front Street N.W., Suite C, (on the water side of the Windjammer Gallery). Please do not hesitate to contact my district office if you need assistance with a state issue, would like to schedule a meeting or inquire about me speaking or attending community events. You can call the district office at (360) 678-3604 or send me an e-mail at norma.smith@leg.wa.gov.

Our district office will be closed until July 5, due to previous obligations for my one assistant and myself. If your needs are immediate in our brief absence, or you would like to know my availability, please contact Adam McCrow at Representative Bailey's office: (360) 786-7914. I will reply to your e-mails and messages as quickly as possible when we re-open on July 5.

As always, thank you for reading my e-mail update.

Warm regards.

Warm Regards,

Norma Smith