FourC Meeting discusses future plans; state budget

by Kris Hallis
for Citizen Review Online

May 24, 2011

Sequim, WA - The FourC (Concerned Citizens of Clallam County) meeting was set to host a forum with State Representatives Kevin Van de Wege (D) and Steve Tharinger (D) on Monday evening, May 23, 2011 at 7 p.m at the Boys and Girls Club in Sequim. Neither was there as the legislature hasn’t passed the budget and they were still in Olympia. They are scheduled to be in Port Townsend tomorrow evening, and Sen. Hargrove and Rep. Tharinger are to speak Thursday evening at the North Peninsula Builders Association meeting to be held at the Boys and Girls Club in Sequim, WA.

Pat Tenhulzen opened the meeting with the Pledge of Allegiance, and gave a brief history of the FourC. They are nearing their two year anniversary. A group of 13 people met in their backyard and started voicing their concerns about where our country was headed. Since that time, FourC has hosted Rob McKenna, candidate forums, and Brian Sonntag in their programs. They are publishing a Government Oversight Committee Newsletter every Monday and a general newsletter each Thursday.

Last month’s meeting featured a panel on property rights and the FourC provided a great deal of information about the subject: they now need to hear from individuals. What are our hot button issues? We need to all work together, not just a few. Pat gave a few examples: 1. Community Disaster Preparedness. 2. Morse Creek - making it safer. 3. Sequim School District which is proposing a new tax of up to 75 cents per 1000 assessed value.

According to Pete Church Smith, City of Sequim Mayor Ken Hays is proposing a Metropolitan Park District. The new district will absorb SARC (Sequim Aquatic Recreation Center), which has a budget surplus of $868,000. Our other parks are running in the red. Pete cautioned that this should show on the ballot in August or November.

There will be no meeting in June. Pat encouraged everyone to get with neighbors, discuss local issues you can get involved with, or go to the City Council or School Board meeting. Their meetings are the 4th Monday of the month also. Consider what you can do for the cause. She said many are involved with writing letters to the editor about the Shoreline Management committee and other issues.

Eric Lohnes of the Freedom Foundation was the guest speaker. He is an analyst for the Policy Center of the Freedom Foundation, and holds a BA in philosophy and English. He has a background in small business also.

He said that small business is the backbone of the economy and that it is difficult to run a small business as it is to tied to taxes.

He reported that the State budget is still in the works; they have been in a 105 day session, which they have every other year. As the budget isn’t yet complete, he said it doesn’t take long to realize that they don’t always work on what they’re supposed to. The special session they are in now will hopefully reduce the budget. They normally have a 60 day session and seem to focus on everything except the budget.

Lohnes said that construction is good for our State, as 10% of income for the State is from construction, since labor is taxed. There was no problem with this during the housing boom, but the State’s chief economist was warning back then that it could not last, and the State didn’t take the warning. We now have a $5 -5.3 billion deficit. The politicians seem to be easily sidetracked by details.

There are actually three budgets in the state budget, 1. The operating budget, 2. Transportation; and 3. the Capital budget.

The budget is funded through:
1. Primarily taxes
2. Federal and other grants
3. Licenses and permits
4. Borrowing
5. Other sources

The problem with federal and other grants is that they come with strings attached. Basically you obligate yourself forever. In order to use the Federal $, you need to keep the spending the same. We have received $3 billion, with strings attached.

The Budget is spent on…
1. Human services 35.7%
2. Public Education 22.7%
3. Higher Education 14.1%
4. Transportation
5. Govt. operation
6. Natural resources
7. Debt service

Lohnes had pie charts from and from the legislative leaf website.

There are several ways to spend the money: the general fund and the near general fund are the two primary areas. The general fund is funded from taxes; the near general fund has money funneled to it from the general fund. There are many committees in the legislature, including fiscal and policy committees and the House has more committees than the Senate.

All the legislators really have to do is write the budget, but have trouble accomplishing this as they get sidetracked with other things, Lohnes observed.

There are several ways to write a budget: performance, line item, incremental, zero base and by increase in population and inflation. They are currently on an incremental budget, which is far outpacing revenue from population and inflation increases.

He explained that the capital budget is distinct from the operating budget, as the capital budget is for long term projects, such as building schools. The capital and the transportation budgets are very political and that is where there is a lot of vote trading.
The labor unions have a B & O tax exemption for dues paid which amounts to roughly ½ billion $ a year. Roughly $900,000 in lost income for the State.