News Releases
Office of Governor Gary Locke
FOR IMMEDIATE RELEASE - December 15, 1997
Contact:  Governor's Communications Office, 360-902-4136

Gov. Locke proposes investments in schools, roads, working families

OLYMPIA - Gov. Gary Locke today proposed a $33.3 million supplemental operating budget for 1998 that provides additional funding for an intensive reading program in public schools and other critical needs, while cutting state taxes and revenues by $245 million next year. Locke's plan holds new state spending to the lowest rate of increase in 25 years.

The governor's largest single tax reduction is directed to families through a $35 cut in the yearly cost of registering non-commercial cars, trucks, and motorcycles. Locke wants to eliminate the Motor Vehicle Excise Tax entirely for vehicles of low value. He also calls for eliminating the Business & Occupation (B&O) tax for 17,000 small businesses, and providing new tax credits for businesses that provide child care and job training for their workers.

The governor invests in the state's future by putting $582.5 million in reserve to ensure stability of vital services in the event of an economic downturn.

In addition, he is recommending a new transportation plan that would raise $2.4 billion over the next five years to relieve traffic congestion and improve the safety of roads and highways throughout the state.

Locke said all of these proposals are designed to build a solid foundation for Washington's future, address issues that need immediate attention, and avoid the "boom and bust" cycle that has been the state's budget experience for at least three decades.

"Our economy is doing very well right now, which gives us a real opportunity to lay a solid foundation for our future," Locke said. "Good schools, strong families, a transportation system that works - these are the things that will keep our state on the road to prosperity."

New Investments in Public Education

The governor said his top priority is to ensure that Washington residents have access to the best possible education. Concerned by the results of test scores that showed 46 percent of fourth graders are not meeting the state's new reading standards, Locke is proposing to create a new Washington Reading Corps that will provide reading instruction and tutoring to 82,000 public school students in grades two through five.

Locke is also proposing a new "Excellent Educators" initiative that will provide bonuses of $3,000 per year for teachers who achieve certification by the National Board for Professional Teaching Standards; a separate initiative to support innovations by charter schools; and a sales tax exemption that will save an estimated $14.3 million on the cost of building public schools and higher education facilities.

Other new investments in higher education include $8.8 million to improve "distance learning" through the state's new K-20 telecommunications network, $5.6 million to extend financial aid to 3,700 more students, and funding to increase enrollments by 1,390 full-time students.

In all, the governor's proposal provides $116.5 million in additional support for K-12 and higher education, including $58.4 million in state general fund revenues, $32 million from the Education Savings Account created in 1997, and a variety of other sources.

As under the current budget, the governor's proposal would hold expenditure growth during the 1997-99 biennium to the lowest rate in 25 years - and $30 million below the spending limit established by Initiative 601. New general fund proposals are largely offset by savings available in the current $19.1 billion budget, keeping the net increase in proposed general fund spending to just $33.3 million.

Other Budget Priorities

In addition to public education, new initiatives proposed by the governor focus on three major areas: supporting working families, protecting public safety, and promoting a strong economy and a healthy environment. To help working families meet the responsibilities of everyday life, the governor is proposing new initiatives that include:

* A $35 reduction in the state's yearly Motor Vehicle Excise Tax for 2.8 million non-commercial vehicles and the elimination of the tax for 1.7 million more. This is the largest single tax reduction proposed by the governor and is directed to families. It will save taxpayers $102.2 million in fiscal year 1999 alone.

* B&O tax credit of up to $400 per employee per month for businesses that provide child care benefits for their workers. Those that invest in formal job training for workers would receive a B&O credit of up to 50 percent of their costs.

* Tax credits designed to help 2,400 first-time home buyers get low-cost loans and make a down payment and state tax credits for counties to support local low-income housing programs. The budget also dedicates $2 million per year to improve farm worker housing.

* Health insurance would be affordable for more families with $11.3 million for increasing enrollments by 7,200 in the state's Basic Health Plan. The governor plans to extend health care coverage to 2,700 children through a new federal matching-fund program. To provide quality care for the elderly and disabled, $23 million is proposed to serve people in community settings.

* Lowering the legal blood-alcohol levels for drivers from the current .10 to .08, create a new strike team to shut down methamphetamine labs, provide additional funding for local criminal justice efforts and tighter supervision of offenders in communities.
$19.6 million to remove barriers to salmon migration, provide grants to landowners who restore critical salmon habitat, and support other measures to protect threatened fish species. These measures are designed to address expected federal endangered listings of several salmon species and avoid the economic disruption that would result from federal intervention if the state did not act to protect salmon.

* New tax incentives for businesses that invest in economically distressed areas of the state, as part of the governor's economic development plan

* Tax exemptions to encourage investments in high-technology industries throughout the state, in addition to eliminating the state B&O tax for 17,000 small businesses and reducing the tax burden for 31,000 more.

The Governor's Transportation Plan

Perhaps the biggest threat to the state's prosperity is the growing inadequacy of Washington's transportation system. Declining federal funding, combined with the effects of inflation and booming population growth, have significantly reduced the ability of the state's transportation system to keep pace with growing demands.

"The state's current transportation budget focuses primarily on maintaining the existing highway system, but does little to meet the critical transportation needs of our growing population," Locke said. "The result of this situation is all too clear to commuters who are stuck in nearly daily traffic jams that are rated among the very worst in the nation."

The governor's proposal includes funding for 177 transportation projects across the state. These projects will address a well-known hazardous intersection outside Othello, make repairs to the Hood Canal and Narrows bridges, complete the carpool system in the Puget Sound core, and make other improvements necessary to expedite the movement of Washington products to the state's ports.

To fund these projects, the governor is proposing a combination of financing mechanisms, including efficiencies in the State Department of Transportation; a crackdown on fuel tax evasion; a sales tax exemption for the labor portion of highway construction; a 3-cent increase in the state portion of the gas tax and an indexing of the gas tax to the Initiative 601 growth factor for five years; and a $25 million contribution from the general fund.

The transportation package also includes funding to assist local governments in meeting their transportation needs.

"Everywhere I go in the state, citizens and local elected officials talk about the need to fix potholes, dangerous roads and failing bridges," the governor said. "The longer the state ignores these critical needs, the higher the price tag. It's time that we step up to these problems and get this vital work done."

Locke's proposal would provide $304 million over five years to cities and counties to address local priorities by imposing a 1-cent gas tax dedicated to cities and another 1-cent dedicated to counties.

"There are those who will say we can wait until next year to address these issues, or maybe the year after that," Locke said. "The question is whether we want to move forward as a state or continue to fall behind. I believe these issues demand action, and that's what I'm proposing here today."

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