Gov. Christine Gregoire signs the billion-dollar jobs bill in a ceremony at Tacoma Community College, and labor officials savor triumph.

TACOMA, April 24.—Gov. Christine Gregoire signed a nearly $1 billion construction bill Monday that seemingly has something for everyone, aiming to kick-start the ailing construction industry by plowing forward with projects at a time when construction costs and bond rates are at their lowest.

The construction program, a top priority for Democrats, labor and the Associated General Contractors, uses debt financing to accelerate already-planned public works projects. It was one of the key elements in the deal that ended the last legislative session. The final project list spreads the spending statewide, and the measure cleared the Legislature with strong support from both parties. Ultimately the construction bill will create 18,000 jobs statewide, the governor said.

“But it’s not just those jobs,” Gregoire said. “It’s those families, and what they will do to generate more in their local communities because they will have a good family wage job. It’s about what the construction will be and the economic boost that we need for our economic future, everything from higher education to K-12 to protecting the environment to local government infrastructure to providing low income housing. There is much in this budget to be proud of, and there is much to make our state stronger.”

Gregoire signed the construction bill, Senate Bill 6074, in a ceremony at Tacoma Community College, which will get $39 million for a new 70,000 square-foot Health Career Center. Other big beneficiaries include Washington State University, which scored $37 million for a Spokane-area medical school.

Credit Card Financing

It might seem odd that the state is launching a billion-dollar program at a time when it has faced multi-billion-dollar shortfalls in its operating budget, year after year, ever since the current so-called “Great Recession” began in the fall of 2008. But there is only a tangential relationship between the operating budget and the state’s capital construction budget, which is funded by bonds, dedicated accounts and other sources. The state makes the annual debt payments from the operating budget, in much the same way that ordinary citizens make payments on their credit cards.

This is one of those times when it makes sense to go into debt, said House Capital Budget chairman Hans Dunshee, D-Snohomish. Bond rates are at their lowest in years, and construction bids are coming in 20 to 35 percent lower than at the peak of the boom times just before the economy crashed. “Really, if there is one thing we should do, we should juice the economy,” he said. “This is a good effort. We’re not just digging holes and filling them up again. We are building things that are going to last forever, so it really is what the Legislature should do in this kind of economy.”

Dunshee and his counterpart in the Senate, Derek Kilmer, D-Gig Harbor, took project lists already planned by various agencies across the state and used them to compile the final list. Republicans were represented in the negotiations by Rep. Judy Warnick, R-Moses Lake, and Sen. Linda Evans Parlette, R-Wenatchee. As part of the deal, the Legislature also passed a proposed constitutional amendment that will gradually lower the state’s debt limit. That measure, Senate Joint Resolution 8221, will appear on the November ballot.

A Disproportionate Spread?

Not everyone was celebrating. State Sen. Michael Baumgartner, R-Spokane, who is running for U.S. Senate this year, noted what he called a suspicious pattern. Some 43 percent of the money went to the 12 districts where Democratic senators are up for re-election. The 13 districts represented by Republicans who are up for election this year got 27 percent.

“The districts represented by Democratic senators whose seats are up for re-election this year got nearly twice as much money for construction projects as districts served by Republican senators whose seats will also be on the ballot,” he said. “A taxpayer might reasonably ask whether that’s due to prioritizing, or if there is some partisan electioneering behind those numbers.”

Baumgartner called for an investigation by non-partisan Senate staff to determine if the pattern is abnormal. “I voted for the capital budget and it contains many worthwhile projects, but we need to make sure that it’s not used for pork-barrel projects in election years.”

Governor Downplays Criticism

Queried by a reporter about Baumgartner’s statement, Gregoire said, “I have no idea what you’re talking about. None, zero. What I did at one of the first meetings [on the capital construction budget] was that I laid out criteria that I thought were important. Shovel ready, smart infrastructure, building on the future – those were the criteria. And let me be clear to him. This was a list of projects put together by all four corners [of the Legislature] and me, so this was a five-corner process. So I have no idea what he is talking about. I think his comments are totally misplaced.”

Gregoire said the construction package was a critical element in the compromise between Democrats and Republicans that ended the session. If the so-called jobs bill didn’t go through, Democratic leaders weren’t going to buy off on the reform bills Republicans were demanding. “Nothing was going to happen in the end if everything didn’t happen, and this was a piece that was made clear by leadership, that if this didn’t happen, then [the] operating [budget] didn’t happen and reform didn’t happen.”

Other projects enabled by the bill include:

$78 million for energy efficiency grants for higher education, K-12 schools and local governments.

$153 million for loans to local governments for water projects, including sewer and stormwater projects.

$216 million for Puget Sound cleanup projects.

$63 million for the University of Washington Bothell campus to expand a science, technology, engineering and math classroom building.

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