Budget plans unwisely pit local infrastructure against education

April 21, 2013 

Construction projects to improve public health and protect the environment could be put on hold or cost Pierce County residents a lot more if the Legislature passes a bill to strip funding from the Public Works Trust Fund.

The Public Works Trust Fund is a low-profile, big-impact state program widely regarded as one of the most successful infrastructure programs in the country. It provides grants and low-interest loans to local communities for public works projects that could not otherwise be financed and built by small communities themselves. Many of these projects are required by state and federal health and environmental requirements.

The low-interest loans provided through the trust fund save taxpayers and utility ratepayers money. For example, the 1 percent loan approved by the PWTF Board for Pierce County to help complete the Chambers Creek regional wastewater plant expansion would save ratepayers $7 million in interest payments.

Projects such as these are important for public health and the environment. The Green River Filtration project, which will protect Tacoma Water users against contaminants such as cryptosporidium, is being built with the help of a $19 million PWTF loan. The trust fund is helping communities throughout the region clean up Puget Sound by updating systems and preventing sewage flows into the Sound during heavy rainstorms. Bremerton’s combined sewer overflow project, for example, received $26 million in loans.

Plus, these projects boost our local economy. Economic development does not happen without the infrastructure to support it, but communities with solid infrastructure can attract and sustain new businesses. According to the Department of Revenue, every dollar invested by the PWTF in basic infrastructure yields an additional $3.60 in economic activity.

Of course, building projects mean immediate jobs for the hard-hit construction industry that is still suffering from an unemployment rate twice the general rate. Construction jobs have an excellent multiplier effect for local communities, as employed construction workers support jobs in local businesses grocery and other retail stores, restaurants and a variety of other local businesses. According to a University of Washington report, for each $1 million invested in construction, an additional 16 jobs are created across the economy.

To provide this assistance to local communities, the trust fund receives the interest on loan repayments and revenue from four state tax sources related to the types of infrastructure aided by the fund, including a small slice of the water utility excise tax.

The proposals in the Legislature would diminish the positive impacts provided by the trust fund by sweeping cash out of the account and, worse yet, permanently switching funding streams from the fund to education accounts, as the budget proposed by the Senate majority coalition would do. Scores of projects would be affected. The Chambers Creek project already approved by the PWTF Board is not included in the Senate version of the project list because of the funding diversion.

We understand the need for additional spending for K-12 education as required by the state Supreme Court’s McCleary decision, and we appreciate the challenge policymakers have in balancing a strapped budget.

But the choice to take from public infrastructure projects that promote public health, environmental stewardship and economic growth to help fund education is in our view shortsighted and ultimately self-defeating. State investment in basic infrastructure is a strong and necessary foundation for economic growth, and the Public Works Trust Fund is a vital part of the state’s overall economic-development strategy.

The PWTF is one of the rare programs in state government that has broad support from the full spectrum of stakeholder interests — business, labor, local government and the environmental community. We encourage the Legislature and governor to fully fund the trust fund without redirecting its funding streams, enabling the trust fund to do its part to spark the increased revenues for education and other priorities that a thriving state economy can provide.

Pat McCarthy is serving her second term as Pierce County executive. Butch Brooks is president of the Associated General Contractors of Washington and a former Fife city councilman and mayor pro tem.

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