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April 5, 2013 at 4:49 PM

Is $166 million transfer in state Senate budget constitutional? State Treasurer doesn’t think so

State Treasurer Jim McIntireState Treasurer Jim McIntire said he has “serious concerns” about the legality of a $166 million fund transfer proposed in the state Senate budget proposal released this week.

The budget, released by the Republican-dominated Majority Coalition Caucus but crafted with Democrats’ input, calls for $83 million dollars a year to be taken out of the Common School Construction Fund to help balance the operating budget. The fund would then be refilled with general-obligation bonds – borrowed dollars.

State budgets are often balanced by “sweeping” supposedly dedicated special funds. But this proposal is troublesome, said McIntire, because the Common School Construction Fund is a dedicated fund protected by the state Constitution. “I don’t know if I have the constitutional authority to make that transfer,” he said.

It was created in 1965 by Legislature to take in revenue from timber sales on state lands and spend it “exclusively for the purpose of financing the construction of facilities for the common schools,” according to Title IX of the state Constitution. “Given the language of the Constitution, it gives us some serious concern,” said McIntire.

A legal analysis by a Senate staff attorney – dated yesterday, a day after the budget was rolled out – finds the transfer is constitutional. Title IX of the constitutional allows the Legislature to tap money “in excess” of what is needed to build schools, and the Legislature basically gets to decide what that means, according to the analysis.

Regardless of the legality, it’s a bad idea. It taps capital money for operating costs. It replaces real money – and $166 million is a lot, even by state budget standards – with borrowed money. That’s putting a mortgage on a credit card. That’s not the sustainable budgeting promised by the Majority Coalition Caucus.

Such budget tricks are necessary because the Republican-dominated Majority Coalition Caucus put itself in a fiscal box: insistent on a $1.5 billion increase in education funding, adverse to the political blow back from deeper cuts to social services, and yet allergic to even reasonable ideas, such as closing obsolete loopholes in the state tax code.

Comments | Topics: Education, Jim McIntire, Washington State Legislature

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