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Natural Resources

Governor's 1997-99 proposal
$237.4 million
$920.3 million
Net change from 1995-97
$24.6 million
$64.1 million
Percent change from 1995-97

W ASHINGTON'S NATURAL RESOURCES are a vital part of the state's heritage, its economy, and its essential quality of life. But these values have increasingly come into conflict with the dramatic increase in Washington's population, which is expected to reach 5,930,000 people by the year 2000. That represents an increase of more than one million people during the decade of the 1990s, a time when approximately 30,000 acres of fish and wildlife habitat are being lost to development each year. The proposed listing of steelhead as an Endangered Species by the National Marine Fisheries Service (NMFS) in August 1996 gives the state just 12 to 18 months to develop plans to avoid these listings. It is also increasingly likely that other species - including coho, chinook, and chum salmon - will be listed in the next two years. Governor Lowry's 1997-99 budget proposal responds to five critical water-resource issues, all of them interrelated and all requiring immediate attention.

Watershed Management

Experience has shown that watershed management issues must be resolved at the local level, where residents are directly affected by these decisions. At the same time, however, local governments do not have the financial or technical resources to resolve these issues on their own. Governor Lowry's budget proposal would make the state an active partner with local governments in resolving long-standing watershed issues, while also meeting its responsibilities in such areas as water-right permit processing, hatchery operations, and harvest management.

In past years, this kind of comprehensive approach to water-resource management has been stymied by the costs involved. This year, Governor Lowry is proposing to break that logjam by submitting a $258 million bond authorization to the voters as a referendum on the November 1997 ballot. The bond authorization would provide grants to qualified local governmental entities for implementation of local watershed plans and cover the cost of administering the grants - evaluating applications, awarding grants, and monitoring the use of the grant dollars. As proposed by the Governor, the referendum would exempt the GF-S debt service on the bonds from the expenditure limit imposed by Initiative 601 and the statutory debt limit.

Support from state agencies for local planning efforts, as well as the costs associated with the state responsibilities, would be funded by a transfer from the Water Quality Account into the Water Resource Administration Account. In order to meet local demand for Water Quality Account grants, an amount of cash equivalent to the transfer would be generated by selling $150 million in bonds. The Water Quality Account would pay the debt service on these bonds.

Local Watershed Plan Implementation

The cornerstone of the Governor's proposal is state funding for the implementation of local watershed plans. For those planning efforts to be successful, local jurisdictions need technical assistance from a variety of state agencies, including the departments of Ecology (DOE); Fish and Wildlife (WDFW); Natural Resources (DNR); Health (DOH); Community, Trade, and Economic Development (CTED); and the State Conservation Commission. In the 1997-99 Biennium, the Governor's proposal would provide $19.1 million to assist local communities in implementing watershed plans and $5.2 million to help them collect the data necessary to make informed, timely decisions. State agencies would also receive an increase of 51 staff to assist in these efforts.

Local Community Assistance - $19.1 million, 29.3 FTEs

Data and Information for Local Decision Making - $5.2 million, 21.6 FTEs

State Responsibilities

Besides supporting local watershed planning, state agencies must also meet their statewide responsibilities in such areas as fisheries management, environmental protection, and water right permit processing. The Governor's proposal provides $6 million and 39 additional staff to help them meet these responsibilities.

Puget Sound Water Quality Work Plan Implementation

The 1995-97 Biennium saw the sunset of the Puget Sound Water Quality Authority (the Authority). In its place, the Puget Sound Water Quality Action Team (the Action Team), housed within the Governor's Office, was created to develop the 1997-99 Puget Sound Water Quality Work Plan (Work Plan) to continue efforts to protect the waters of Puget Sound. In addition, the Puget Sound Council was created to assist the Action Team by recommending projects and activities that should be considered for inclusion in the Work Plan. The Governor proposes to fund most of the highest priority Work Plan items adopted by the Action Team.

Oil Spill Prevention and Response

Given the enormous economic and ecological damage that can result from a major oil spill, Governor Lowry believes the state should maintain the strongest possible vigilance to prevent a major spill from occurring in Washington's waters. In his recommendations to the 1997 Legislature, the Governor proposes two actions designed to safeguard these waters.

Flood Preparedness and Assistance

As discussed in the section on Governmental Operations, the Governor is proposing a General Fund-State (GF-S) expenditure of $16.5 million in the 1997-99 Biennium to assist local governments and communities to recover from the devastating floods and storms of 1995 and 1996. These funds are administered by the Emergency Management Division of the Military Department. In addition, the Governor is proposing $6 million in funding for local flood-control plans along with $3.3 million for other initiatives to help mitigate the damage from future flooding. This funding, which is administered by the DOE and other natural resources agencies, will also support local watershed planning and implementation.

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Capital Budget

Governor's 1997 supplemental $112.1 million 0 $112.1 million
Governor's 1997-99 proposal $934.2 million $897.3 million $1,831.5 million
Total - New Appropriations $1,046.3 million $897.3 million $1,943.6 million
Net change from current 1995-97 $220.9 million $59.8 million $280.7 million
Percent change from current 1995-97 26.8% 7.1% 16.9%

T HE 1997-2007 CAPITAL PLAN lays out a ten-year proposal for the necessary investments in facilities and infrastructure to provide essential government services, promote economic development, and enhance the quality of life in Washington State into the next century. Proposed appropriations for new projects in the 1997-99 Biennium total $1.8 billion, with $934.2 million funded by the proceeds of general fund-supported bond sales. An additional $1.4 billion in reappropriation authorization is requested to allow currently funded projects to proceed.

Key Priorities

The capital budget from bond funds proposed for the 1997-99 Biennium must be viewed together with the 1997 supplemental operating budget proposed by the Governor. The supplemental budget includes four capital items: $50.0 million for public school construction grants, $38.5 million for the Harborview Medical Center research facility for the University of Washington, $21.0 million for construction of a Health Sciences facility at the Joint Center for Higher Education in Spokane, and $2.6 million for the Building for the Arts program for the Seattle Symphony. The $112.1 million provided for these projects in the 1997 supplemental budget, added to the $934.2 million in new bond appropriations for the 1997-99 Biennium, brings total state bond and general fund commitments for capital purposes to $1.05 billion. The priorities for this $1.05 billion plan are clear:

New appropriations from other funds of $897.3 million are recommended in this capital budget. The major elements funded from these dedicated sources include:

Achieving Balance in the Capital Plan

Accommodating the diverse and competing needs for capital investments over the next ten years poses a major challenge for this Ten-Year Capital Plan. Expanding population growth is pressuring higher education and K-12 enrollments as well as the capacity of adult prison and juvenile offender institutions. These population pressures are causing many regions of the state to confront decisions about water quality, water supply, land use and preservation, and access to recreational opportunities. The Governor's proposed 1997-99 capital budget and Ten-Year Plan strive to balance these concerns through the WWRP program, affordable housing programs, economic development investments, and by replacing outdated facilities and investing in new technologies for schools and state facilities. The Governor's proposed 1997-99 capital budget and Ten-Year Plan make progress in the most critical areas in a coordinated and affordable manner.

Creating an Affordable Capital Plan

Two statutory fiscal limits define the boundaries for the capital plan. The 7 percent statutory debt limit sets out the maximum amount that can be spent for debt service at any point in the future, measured as a percentage of general state revenues. Since debt service on previously issued bonds is fixed, the statutory debt limit restricts the amount of new bond-funded projects that can be initiated in the 1997-99 and 1999-01 biennia. After that point, the structure of previously sold bonds allows the amount of new appropriations to increase. In addition, Initiative 601 sets the financing limit for bond-supported capital programs, since general fund dollars used to pay debt service are subject to the limit. The recommended Ten-Year Plan for bonds will result in debt service growth of 16.8 percent in the 1997-99 Biennium. This decreases over the following two biennia to approximately 8.3 percent in 2001-03. For the next two biennia, this rate of growth in debt service is above the Initiative 601 fiscal growth factor.

General Fund Capital Appropriations and Debt Service
Dollars in Millions
New General Fund
Bond Appropriation
Debt Service
Percent Growth
Debt Service
721 24%
843 17%
985 17%
1,122 14%
1,215 8%
1,259 4%
1,388 10%

Management Improvements

The Office of Financial Management has continued to work with agencies to find ways to maximize the effectiveness of capital investments. Management improvements implemented for this Capital Plan include a new process for evaluating the financial implications of alternate financing proposals. The total costs for each proposed alternate financing project are now clearly presented in short-term cash flow and long-term present value investment terms. The full cost implications of each proposal are clearly displayed so that projects proposed on the basis of anticipated savings can be accurately evaluated. Similarly, the future cost/savings for projects proposed on the basis of program, service, or operational need can now be reviewed with more comprehensive and accurate financial information.

Capital Plan by Functional Areas


Human Services

Natural Resources

Government Operations


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