Senate refuses to touch state's emergency fund

Senate Republicans on Friday rejected a Spokane lawmaker's bid to tap the state's emergency funds and build a $200 million financial "cushion."

Sen. Lisa Brown, D-Spokane, wanted to pull $250 million from the state's hard-to-touch emergency reserve fund and move it to the state's main checking account, the general fund. Spending or moving the emergency reserves requires a two-thirds majority vote.

Brown, who's in charge of the Senate's effort to patch a $1.6 billion hole in the state's two-year budget, said she would spend about $50 million of the transferred money. The remaining $200 million would be a cushion against future problems, like a worsening economy or the state not receiving hundreds of millions of dollars in federal funds it's hoping for.

"This might not be the worst of it yet," said Brown. Without such a cushion, the state could be thrown into a deficit by future problems, she said, forcing the Legislature to rush to Olympia to figure out what to do.

"The reality is, we don't want to spend this money," Brown said of the $200 million.

Republican senators were skeptical, saying that Brown's 2001 budget spent nearly $700 million more than the state expected to take in.

"The issue is, we don't want to buy a pig in a poke," said Sen. Don Benton, R-Vancouver. "We want to see what it'll be used for."

Brown said the state's clearly facing a financial emergency, exactly the kind of thing the emergency reserves were intended for.

"A pig in a poke?" said Brown. "We don't know what's going on here? People being laid off in our communities. Washington state having the highest unemployment in the country. And there's some confusion about what might be occurring, that we really don't know yet that this is a crisis that might merit spending some of the emergency reserves?"

Critics, however, were adamant.

"It's absolutely essential that we've got some idea of what you're going to do with this," said Sen. Dan McDonald, R-Bellevue. "I'm not willing to just unleash this for anything, and I don't think it's right for you to ask us to do that."

McDonald said he's frustrated at how the state's emergency reserves have been gradually drained down in recent years. Schools successfully campaigned to cut in half the money flowing to savings during good times, steering the difference into a school construction fund.

"And then you said hey, we're going to leave town last year, we're $600 million out of balance, but everything is going to be OK," he told Democrats. "And you know what? It isn't OK. It's very un-OK."

In the end, a majority of the Senate - 26 to 23 - sided with Brown. But it wasn't enough. Under the spending rules for emergency reserve funds, two-thirds of the Senate had to agree. The proposal died.

The proposal may yet have life, however. The two-thirds requirement, imposed by 1993's Initiative 601 can itself be overruled by a simple majority. Brown, at Locke's request is already sponsoring such a bill. Friday's vote count would give her enough to pass that.

"My preference is to this in a bipartisan way," said Brown, who said she would ask Senate Democrats if they want to suspend the initiative.

"I don't think they want to cut another $200 million," she said.

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