Early this year, the Legislature passed bipartisan unemployment insurance changes — and they’re now paying off. This morning, Secretary of Labor Hilda Solis was joined on a conference call by Gov. Chris Gregoire and Congressman Jim McDermott to announce that the state will receive an incentive payment from the federal government of $97.7 million. The payment is offered under the Unemployment Insurance Modernization Act and the Legislature made the changes anticipating those funds would arrive.

Solis said the changes — and the check that come with it — are imperative in this economic climate.

What are the changes? If you have to leave your job because your husband or wife is in the military and has been moved to a new base, you will be eligible for unemployment benefits. Or, if you must leave your job to flee domestic violence, you can also receive unemployment insurance. There are also changes to training benefits to allow more workers being retrained to be eligible for benefits.

Gov. Chris Gregoire said Washington’s UI trust fund is among the healthiest in the nation, which means the state hasn’t had to borrow from the federal government. She said that also allowed the legislation passed earlier this year to include a rate drop that will save most employers on their unemployment insurance taxes. Businesses will save an estimated $300 million in rates this year because of that change, she said.

McDermott said he’s excited to see the state of Washington step up to the challenge and change its system.

Tags: unemployment insurance

Former state Rep. Jeanne Edwards passed away over the weekend. She was 82.

Edwards may be most remembered for her effort to provide health insurance coverage to children — the program now known as Apple Health for Kids that was saved from budget cuts by the Legislature this year.

You can read the full story here.

Tags: Jeanne Edwards

Today at 1:30, the state Supreme Court will hear arguments in McCleary v. Washington — the court case alleging that the state of Washington does not adequately fund public education. The case will be televised live on TVW.

The case was already decided last year in Superior Court, where Judge John Erlick ruled that the state is not fulfilling its Constitutional duty to fully fund public education. The state appealed that decision.

Read more on the background here. And don’t forget to tune into TVW in just a few short minutes to watch.

Tags: McCleary, public education, supreme court

This morning, Secretary of State Sam Reed took some time to talk to reporters about his future. Watch the whole thing here.

Tags: Sam Reed, Secretary of State

Tags: Governor, Inslee

The Seattle Times is reporting that Congressman Jay Inslee will announce early next week that he’s running for Governor. You can read the full story, which was verified via someone with “direct knowledge” of Inslee’s plans, here.

Attorney General Rob McKenna, a Republican, has already announced his candidacy. When Gov. Chris Gregoire announced she won’t run for a third term, she said she’s support Inslee’s bid for her job.

Tags: Governor, Gregoire, Inslee, McKenna

The latest Economic and Revenue Forecast is out — and the state’s estimated revenues are down by about $183 million from the March forecast for 2011-2013. But because the budget relies on some one-time money and many other factors, it means about $570 million difference in the 2011-2013 budget. And what does that mean? That the ending fund balance for the next two-year budget cycle, which was more than $700 million yesterday when Gov. Chris Gregoire signed the budget, is now at about $160 million.

Dr. Arun Raha, the state’s top economist, said the economy has hit yet another soft patch. “Before I start, I have to acknowledge my new-found respect for our northern neighbors. Unlike the Greeks, who are rioting over economic conditions,” he said, our Canadian neighbors are rioting over the Stanley Cup. “Who knew Canadians could riot, eh?”

Back to the forecast: At the economic review earlier this month, he warned that the sails of the economy were luffing. Now, he says, the wind has been fully taken out of the sails.

“The forecast I present today is based on the weaker near-term outlook for both the nation and the state than the preliminary economic forecast presented on June 3,” he said.

“Actual collections were $93 million higher than expected,” he said — the entirety of which is due to a larger-than-expected windfall from the tax amnesty program. Without that boost, collections were 3.8 percent below the March forecast.

“This is the worst recession since our Great Depression, and our data sets don’t go back that far,” he said. That means he’s been operating in “uncharted waters” for the duration of the recession.

Now, about that $183 million forecast adjustment for 2011-2013. “At this point, it appears that the successive downward revisions are slowing,” he said.

“Even with the growth projected through fiscal ’13, we will only get to where we were in fiscal ’97,” he said, in real dollars.

General Fund State revenue as a share of personal income are rising, but still below trend, he said. “The ratio is improving, but still below trend,” he said. “Nonetheless, the ratio is still lower than the ratio for fiscal years 1995 to 2008.”

Back to the economy: 41 months since the recession started, there are 7 million fewer jobs nationally. “The reason behind this jobless recovery is remarkable gains” in productivity, which means greater output with fewer employees. “We are now at that stage in the recovery where any increase in final demand will result in job growth,” he said. So, what’s holding the economy back is a “weakness in final demand.” In other words, consumers aren’t buying as much.

“The news regarding overseas demand is encouraging,” he said: Exports are growing faster than imports. (And you may remember Gov. Chris Gregoire saying yesterday that Washington has a trade-dependent economy, so our recovery depends on a strong export market.)

The main reason the 2 percent decrease in federal payroll taxes hasn’t materialized into a jump in the economy: Half of that money is going overseas to buy petroleum, he said.

He said the Fed is unlikely to raise interest rates, at least through the end of the year.

Now, for construction: Nonresidential construction is “comatose.” Contracts dropped by a third in 2009, a fifth in 2010, and are down another tenth this year. Like the forecast for 2011-2013, the decreases are slowing, he said, which is good news. (more…)

Tags: Arun Raha, Economic and Revenue Forecast

Gregoire said she’s about to sign the most complex budget in anyone’s recent memory. “It wasn’t a year of easy decisions or deferred sacrifice,” she said, adding that lawmakers took more hard votes than anyone thought possible previously. “We did not resort to gimmicks, to short-term fixes or to new taxes. That, in and of itself, is historical for the times. Today, in Washington state, we met our challenges and we defined our future,” she said.

She said the Transforming Washington’s Budget commission played a big role in helping to figure out what to cut, what to fund with user fees and what to reform.

This is a “budget that signals the dawn of a new economy in our state,” she said. “The way we used to do business is not the way we will do business in the future.”

“State government can no longer do it all,” she said. “Twenty-three major reforms were approved by the legislature.” She said the budget consolidates the two largest purchasers of healthcare — the Healthcare Authority and Medicare. “This session, we showed that real efforts can be taken now to reign in our healthcare costs… our goals have the potential to save billions of dollars in the coming years,” for taxpayers.

She said for the first time, adult family home licensing and regulation will be supported by those who use the service. The cost curve has been bent on the pension system, which was “headed off a cliff.”

“State workers stepped up. They shared in the sacrifice,” she said, by agreeing to pay 25 percent more for insurance. And, salaries are being cut by 3 percent over the next biennium — the first cut of its kind, she says, since at least the 1960s. She said that might sound like inside baseball, but it makes a big step toward a modernized approach to government.

“We are ending the Disability Lifeling program, the roots of which stretch back to the Great Depression,” she said. It’s being replaced by three programs to provide care to some of the most needy populations on the previous program, including pregnant mothers and the disabled.

“We’re fighting fraud and eliminating waste,” she said, even creating a new office to look into fraud. “To say today that these steps were quick, that they are easy is simply inadequate.”

She said the General Fund is not expected to return to pre-recession strength until the end of the biennium.

“I have always supported education as the state’s highest priority,” she said. This budget reduces education funding by $1.8 billion. But, she says, education will remain the state’s top priority. “Even in these tough times, this budget will help more low-income children go to preschool,” she said, and many more reforms for kindergartners through college students.

“Three years ago, the Basic Health Plan covered more than 107,000 Washingtonians,” she said — this budget covers 33,000. She said that’s much preferred over her proposal, which would have eliminated BHP.

She says beyond the cuts, there’s a recovery – and this legislative session resulted in bills to reduce workers’ compensation and unemployment insurance rates, which will help businesses put people back to work.

She said the state is also creating jobs today, via the Capital budget and the Transportation budget. In total, more than 45,000 jobs will result from those two budgets. “Our future is taking shape,” she said. “The ticket out of this recession for Washington state is exports,” she said.

She thanked legislators who took the hard votes, as well as citizens of Washington who will become part of an informal safety net that the state can no longer provide.

“Thank you all, and I will now sign the bill.”

She signed the capital budget first. Now, the operating budget.

“This budget is a no-new-taxes budget. It is also a no gimmicks budget,” she said. “I have vetoed a number of sections,” she said, most associated with bills that weren’t passed. She said the vetoes total about $3 million. “I really do appreciate the hard work and the bipartisanship that brought this bill forward,” she said, “for that, I thank you all.”

Tags: Budget

Gov. Chris Gregoire signed the bill, co-sponsored by Sens. Linda Evans Parlette and Derek Kilmer, to create a commission to study the state’s debt. This bill began as a Constitutional debt limit, but in the final days of session, was transformed into the commission.

“This was a very difficult issue … I think you finished at 5 a.m.,” Gregoire said, in the final days of session after meeting in her office. She jokingly asked if the lawmakers had recovered yet.

The debt commission will begin meeting this summer and will have a report to the Legislature by next session.

Tags: debt commission

Gov. Chris Gregoire on the bill to privatize the state’s liquor distribution system: “The bill commits Washington state to nothing and it simply provides us additional information on alternative needs” for warehousing liquor, she said.

She said members neither anticipated nor booked money for the bill, which was critical . “Instead, they felt they had to exercise due diligence to have an RFP (request for proposal) process.” She said she received a letter from all four caucuses — a first for her — asking for her to sign the bill. “The Legislature and the voters have a right in my opinion to see all our alternatives vetted, and vetted in a timely manner. Therefore, I will sign the bill in full.”

Tags: liquor distribution