Advocacy - State Legislative Session Update

Dear AIA Washington Council Members,

Overview

We are down to the closing days if the 105 day regular session. It is not likely, however, that the Washington Legislature will reach agreement on all of the outstanding issue by Midnight on Sunday, April 28.

AIA|WA issued an action alert to our members asking for them to urge contact lawmakers to oppose HB 2038, which extends the 20% B&O tax hike on the profession that was passed in 2010 and set to expire this year.

If you have not done so, please take a moment to contact your legislators through this link and urge them to not increase your taxes. More details are below.

AIA|WA is working with a broad coalition of business groups to advocate for a sustainable state budget that promotes economic recovery. You can find out more at the Recover Washington website: http://www.recoverwashington.com.

To stay up to date on the latest news, follow our blog at: aiawa.blogspot.com.

Special Session Likely

If the legislature does not finish its work by Sunday, then it will need to be called into a special session by the Governor. The Washington Constitution states that a special session may last no more than 30 calendar days. But, there is no limit on the number of special sessions which may be called.

It is likely that only the budget negotiators will remain in Olympia and that the official special session will be called only after an agreement is reached on the state budget. That would mean most legislators will return to their district and come back to Olympia for the few days needed to pass the bills necessary to implement the budget.

The Operating Budget

The House and the Senate are more than a billion dollars apart in their efforts to agree on an operating budget. Negotiators have met, but many basic parts of the budget have not passed either body.

Revenues for the 2013-15 biennium are projected to be $2 billion more than for the current biennium. It is expected that lawmakers add about $1 billion to K-12 education and higher education programs.

Taxes, Diversions & Transfers

The House budget assumes about $1.3 billion in new taxes. Many of the tax increases are included in Substitute House Bill 2038.

The House announced this week that they are removing several tax increases, but not the 20% tax hike on architects and other service professions.  In 2010, lawmakers passed a temporary B&O tax increase on service professions, pledging to let it expire this year. But, House lawmakers are poised to break that promise with SHB 2038 enacting the higher tax rate permanently.

The House passed the tax increase yesterday on a vote of 50-47, with Democrats providing the 50 votes and 5 Democrats voting with Republicans against the bill. 

The State Senate did not include any new taxes in its budget. However, the Senate relies upon roughly $600 million dollars in revenues to be permanently diverted from construction programs to the operating budget. They also would remove about $2 billion from the definition of general state revenues, which lowers the state’s borrowing capacity for capital projects. The House budget transfers about $100 million from construction programs.

Capital Budget

Neither body has passed their capital budget, yet. In the House there is bipartisan support for the capital budget, but it is being held up by Republicans as leverage in the operating budget negotiations.

The AIA|WA is working on some provisions in the capital budget regarding building performance requirements. A provision was added to two projects requiring additional value engineering, in an effort to curb costs. AIA|WA is concerned that value engineering has already been performed on the projects and another review late in the project would delay projects and not provide the expected cost savings.

Another project requires a design-build team to guarantee 5 years of energy performance. AIA|WA supports more efficient buildings, but is concerned that such a guarantee is unprecedented in our state and needs further evaluation to see if it would limit competition on the project.

The House and Senate are not far apart for the total amount of money budgeted for capital projects. However, there are some major differences in the specific projects as well as the funding sources being used for projects. It is likely that the Capital Budget will not pass either body until after an agreement is reached on the operating budget

Alternative Public Works

Substitute House Bill 1466 reauthorizes the states alternative public works laws (design-build, construction manager and job order contracting). The final bill includes a study of methods to improve building performance and lower life-cycle costs through alternative public works projects.

The AIA|WA also asked the legislature to address abuses of the job order contracting process which is intended for small construction projects. An amendment was included in one version of the bill, but was dropped before the bill passed the legislature. AIA|WA will continue to work to ensure that JOC is used only for construction purposes and not for design contracts.

Celebrate the Best of WA Public Architecture

On May 23, the AIA will celebrate the best of public architecture in Washington State. The AIA|WA Civic Design Awards brings together architects, public agency clients, consultants and the public. This is the only architecture award program in our state that focuses solely on projects with public funds. By promoting design excellence, the AIA|WA Civic Design Awards seeks to recognize public agencies that work with their architects to achieve a great project.

Thank you for your continued support of the AIA and our advocacy efforts in Washington State. If you have any questions about these or other issues, please do not hesitate to contact me.

Thank you,
Stan L. Bowman, Hon. AIA|WA
Executive Director
American Institute of Architects Washington Council
www.aiawa.org