Zarelli and the LDN gets it right… as far as it goes…

This morning’s LDN gives kudos to Sen. Joe Zarelli (R-18) for lecturing legislative democrats over their plan to utilize the Tobacco Settlement funds for general fund purposes.

I would be more enthused about the whole thing if House Republicans hadn’t tried to tap that fund a few years back… it was, in fact, my inaugural exposure to that now en vogue phrase of the “economic bow wave.”

That said, the money in question should be utilized for the specific purposes then state AG, now “Governor” Christine Gregoire sought to achieve with the settlement. The problem for us on the tax-paying end, of course, is where does the money come from if the TSF is NOT used to plug the holes in the leaky “Budget of State.”

I’m torn about this one, really. With the passage of the idiotic Battle Ground Bond issue, I estimate that my taxes will increase… another $75 PER MONTH over this years roughly $50 per month increase. (This represents a 13% increase in my house payment in two years… try projecting that out, say, 5 years. Inflation, even including energy prices, will force an average increase of 2% per year, or 10% over 5 years. Meanwhile, taxes will increase at an average extrapolated rate of 6.5 percent per year, or about 34 percent… an increase of about $350 per month.) In addition, we’re staring at a gas tax increase of as much as another $.10 per gallon. While a slight burden on me, the gas tax will have a major impact on our Eastern Washington brethren, already so enamored of the Seattle liberals of both parties who want to ram these tax increases down our throats without our say-so.

So… the question is: If not TSF money… then, what?

This is an extremely delicate situation for the democrats, many of whom have been around long enough to remember what happened when they jacked up taxes thru the roof in ’93. Further complicating this issue is the possibility that “Governor” Gregoire cannot come out in favor of the massive tax increases her party is straining to inflict upon us… because of the possibility (as opposed to the probability) of a re deux this November.

As an observer, it’s interesting to watch this political quandary… one where the pent up frustrations of legislative democrats can finally be unleashed, only, perhaps, to be kept in check by a “Governor” more concerned about her own political self-preservation then the agenda of her Party.



The Longview Daily News

Hands off the state's tobacco money
Mar 10, 2005 - 07:06:30 am PST

We're not sure state Sen. Joe Zarelli has the political guns needed to shoot down the trial balloon floated by Senate Majority Leader Lisa Brown last week on the possibility of using tobacco settlement money to help close Washington's $2.2 billion budget gap. But the Vancouver Republican's well-aimed fire should give pause to anyone seriously entertaining this scheme.

Zarelli correctly tagged as "blatantly irresponsible" any notion of again dipping into tobacco money to ease a budget crunch. "You can't use one-time money to solve ongoing budget problems," he declared in a press release last week. "If you do, you get an unsustainable budget. It happened in 2002 and we're seeing the effects of it today."

Zarelli's right. The state will be paying a high price for that earlier use of tobacco money for many years to come. The Legislature sold off 29 percent of the anticipated settlement money in 2002 to raise $450 million cash. Retiring the bonds in 18 years, as is hoped, will cost Washington $900 million. If the state takes the maximum 30 years to pay them off, the cost will be more than $1.5 billion.

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