New proposal to fund local infrastructure

New proposal to fund local infrastructure
: Two identical bills in the state legislature would create a new program within the House Finance Commission to fund local infrastructure using bonds. Photo:

While the House’s proposed 2019-21 operating budget would continue raids into the Public Works Trust account mean to fund local infrastructure projects, two identical bills would offer an alternative funding program paid for using bonds. HB 1441 introduced by Steve Tharinger (D-24) and SB 5304 sponsored by Sen. Mark Mullet (D-5) would set up the new program within the House Finance Commission, which currently collaborates with the state Department of Commerce to provide financing for qualified first-time homeowners and low-income households.

So far, the bills have successfully cleared their respective chambers, while HB 1441 is expected to advance from the Senate Committee on Housing Stability & Affordability next week after a brief public hearing on Mar. 27.

Currently the Public Works Board oversees the Public Works Trust, which provides money for the low-interest revolving loan program created in 1985 to pay for local infrastructure. The account is funded in part with real estate excise tax (REET) revenue; however, since 2013 the state legislature has taken a total of $1.2 billion intended for that program, and the House proposed operating budget would seize another $160 million.

HB 1680 sponsored by Rep. Beth Doglio (D-22) would end the redirection of REET meant for the public works account. It cleared the House Committee on Capital Budget on Feb. 27 and has been referred to the Appropriations Committee, but no public hearing has been scheduled; its companion bill SB 5952 failed to clear the Senate Ways and Means Committee prior to the cutoff date.

Meanwhile, there are roughly $880 million worth of shovel-ready local infrastructure projects that lack funding that the revolving loan program might have provided. A 2018 study by the University of Washington polled 400 cities, counties and water districts in Washington. Out of the 100 respondents, the report found “a modest but consistent group of small, rural-located local governments would like better access to infrastructure financing programs.”

If passed, HB 1441 and SB 5304 would allow the House Finance Commission to create a new financing program for city, counties and school district infrastructure projects such as street improvements, roads, bridges and water systems. The program would include criteria focused on the applicant’s ability to repay the loans provided either directly from the commission or by issuing revenue bonds. The revenue would not be considered state funds and would not be subject to the commissions’ $8 billion bond debt limit.

Testifying at HB 1441’s Mar. 27 public hearing, Commission Executive Director Kim Herman told legislators that the program would primarily benefit small cities and counties that lack access to the regular bond market because they’re unable to obtain an individual rating.

No further action is scheduled for SB 5304.


Please enter your comment!
Please enter your name here