Don't Raid Washington State's Capital Investments for General Government
• Funds from capital investments were diverted in 2009-11 to patch up the state's operating budget. It cost Washington 10,000 jobs.
• More jobs and economic activity are created by capital investments than by general government spending. Investing $1 billion in the capital budget will create nearly 1,000 more jobs and $55 million more in wages than if spent in the general government budget.
A Long Term Solution - Tax Increment Financing
While Washington struggles with current operating and capital budget problems, there is a future for more stable sources of capital investment; Tax Increment Financing. Tax Increment Financing dedicates tax revenue from a construction project to be invested back into that community. Washington should join 48 other states and give local governments the authority to use a well-established economic development tool. It doesn't mean more taxes; it means more local economic investment.
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Sources for capital investment
Trust funds provide low interest loans and technical assistance to local government to repair and replace infrastructure. Bonds are used to build schools, prisons, universities and other major state facilities. Over the past 25 years, the Public Works Trust Fund alone has provided 122,000 jobs and $12.5 billion in economic activity.
About the Capital Budget
The capital budget includes appropriations for construction and repair of state office buildings, colleges and universities, prisons and juvenile rehabilitation facilities, parks, public schools, housing for low-income and disabled persons, farmworkers, and others, and for other capital facilities and programs. Nearly half the capital budget typically is financed by state-issued bonds while the rest primarily is funded by dedicated accounts, trust revenue, and federal funding sources. Major projects can take four or more years to design and construct.
“The capital budget is the best positive economic investment plan the legislature can make this year,” said Rick Slunaker, president of the Washington Construction Industry Council. “It means jobs and economic growth at a time when the state’s general government budget crisis is making tough choices for lawmakers. This is a plan that results in real jobs for every community.”