Members present: Chief Justice Gerry Alexander, co-chair: Judge Deborah Fleck, co-chair; Mr. Wayne Blair; Mr. Russell Aoki; Ms. Sophia Byrd-McSherry; Mr. John Cary; Judge Andrea Darvas; Judge Sara Derr; Mr. Jeff Hall; Mr. Mark Johnson; Ms. Nell McNamara; Ms. Joanne Moore; Mr. Ryan Murrey (for Kelly Stockman-Reid); Judge Marilyn Paja; Ms. Gail Stone, Mr. Ron Ward

Staff present:  Ms. Karen Castillo; Ms. Wendy Ferrell; Ms. Mellani McAleenan (for presentation via telephone); Mr. Ramsey Radwan

 

Guests present:Ms. Tammy Fellin, Association of Washington Cities; Ms. Julie Murray, Washington State Association of Counties

Call to Order 

The meeting was called to order by Chief Justice Gerry Alexander. 

 

Welcome and Introductions 

Chief Justice Alexander welcomed everyone and asked them to introduce themselves.

Chief Justice Alexander made a motion to approve the minutes of the September 17, 2008 meeting. The meetings were approved by consensus.

 

Ms. McAleenan referred the members to the document entitled “New Legislators” that was provided in the packet and proceeded to discuss the four races on the list that are still undecided. She commented that the Republicans could pick up one seat in the House and one in the Senate, with the Democrats still holding a substantial majority in both chambers.

 

Ms. McAleenan reported that Rep. Roger Goodman won his race, the significance being that he may be the next House Judiciary Chair. Rep. Jamie Pederson is also a possible pick for that position, she added. With respect to other chairmanships, not all decisions have been made. The Senate Democrat Caucus Chair will be Sen. Ed Murray; Rep. Richard DeBolt retains his leadership position in the House Republican Caucus with Rep. Joel Kretz as his second in command. 

 

Mr. Radwan provided a hand-out entitled “Economic Climate Overview” and proceeded to discuss the information therein. He reported that the current biennium budget is down by over $100 million due to a 5.4 percent decrease in revenues.  He noted that the Economic and Revenue Forecast Council track record is illustrated on page 6, and the changes to the 2007-09 and 2009-11 biennia revenue forecasts are shown on pages 7 and 8.  Mr. Radwan explained that the figures do not include the proposed reductions by the governor, nor do they include what reductions the legislature might enact. He informed the members that, if the General Fund were to go into a cash deficit, the governor would have broad authority to cut spending across all three branches.

 

Mr. Radwan directed members to page 11, the 2009-11 Projected General Fund Balance Sheet, adding that this information will be updated regularly on the Senate website.  He noted that the one percent cut by the governor is not reflected in these figures. He also explained that the base expenditure level against which this reduction will be applied will be smaller, so the actual reduction will be bigger to some sectors. Even at the decreased level, it’s a ten percent decrease, he observed, but leaving the untouchables such as education, it could be a 25 percent decrease that we may be defending against.

 

Mr. Radwan reported that local county sales tax is down by 5.3 percent or $315 million, the REIT is down by seven percent or $30 million, and property tax will likely be down by $56 million for the current budget cycle. He added that the income for the 2009-11 biennium is expected to be back to 2003 levels.

 

There was discussion regarding the governor’s promise to impose no new taxes and the possibility of a referendum to raise taxes. There was also some discussion about zero-based budgeting.

 

Chief Justice Alexander reported on the outcomes of the Supreme Court Budget Committee (SCBC) meeting held on November 19. He said that the two major topics of discussion were:  1) What are we going to do for the remainder of 2007-09, which ends on 6/30/09, and, 2) What will we recommend to the full Court with respect to funding for the 2009-11 budget cycle?

 

With respect to the first question, Chief Justice Alexander informed the committee that the executive branch had issued a memo asking the judiciary to cut $920 thousand from its current budget. He said that $450 thousand can be saved between the Supreme Court and AOC; the Law Library can save $20 thousand; OPD can save $50 thousand and OCLA can save $21 thousand. This equals a reduction of $541 thousand. 

 

Regarding the 2009-11 budget proposal, the Chief said that the budget request had already been submitted, but with the indication that it could be revised if necessary. The requests for new money included money to fund pay increases for AOC, Supreme Court, and Law Library employees per the salary survey, at a cost of $2.45 million; $150 thousand for the Commission on Children in Foster Care (CCFC), and additional staff in the commissioner’s office, costing $235 thousand. 

 

Chief Justice Alexander went on to report that, unhappily, the SCBC is going to recommend to the full Court at the en banc on December 4 that they not ask for any of this funding.  He said that they could keep the budget request as submitted, but it is clear that the money will not be there. The SCBC believes it is better to take the lead by withdrawing the funding request, and then to put the effort into fighting against cuts. He added that they are going to have to cut out the meat and hope they don’t have to cut bone. 

 

The Chief Justice said that anyone who may be aggrieved by this recommendation has been asked to make their views known. Mr. Radwan will write letters to Justice Bobbe Bridge of the CCFC and others whose groups will be impacted by this decision. Following Chief Justice Alexander’s remarks, several gave assent to the decision of the SCBC, and further discussion ensued.

 

Judge Darvas queried if, given the dire situation, anyone thought it appropriate to ask the legislature for authorization to generate new revenues (such as filing fee increases) through the court. There have been policy reasons as to why those haven’t been adopted in the past, but has the landscape changed, she asked. She added that she is not in favor of this as a concept, but is just wondering whether it shouldn’t be something that is looked at as an alternative to cutting interpreter services or other programs. 

 

Chief Justice Alexander said that he considers it an access to justice issue, and he is against fees for that reason. Mr. Ward commented that they went through a long debate about this primarily because of the access to justice issue, but he suspects it will become a topic of discussion again. He added that more of the justice system needs to be funded out of the General Fund. He is squarely against raising fees because it turns the court into a funding mechanism and he believes it is the wrong direction to go.

 

Judge Fleck remarked that there is a great deal of resistance to the idea of individuals having to pay filing fees to answer a lawsuit filed against them. The focus of the task force was to find a way to bring money to the trial courts.  Over $32 million, most of which went to the counties, was generated in the filing fee increases, she added.  She reported that King County is interested in looking again at seeking new taxing authority and revenue. Some of the ideas being considered are: 1) Removing the non-supplanting language at the local level to remove the limits on how the money can be spent; 2) Increases on utility taxes that would raise $35M; 3) Exceeding the sales tax authority.  Judge Fleck said that she has floated the concept of whether the judiciary could assist the counties in asking the legislature for additional taxing authority. As Chief Justice Alexander points out, she added, we have always stayed away from tax increases. In terms of extra user fees, at some point, it needs to be recognized that it’s a branch that needs to be supported with General Fund dollars.

 

Ms. Stone said that she would be willing to think about raising fees to plug the hole, but wouldn’t want to fund something new on the program list by raising fees.

 

Mr. Hall warned against looking to user fees as a means of funding the courts, citing California as an example of a state that did that. Just three years later, they are very regretful of that decision, he noted. We’ve done it before and it was on our conscience, he said. If we move the fees up, they will stay there.

 

It was noted that there is something in the JIJIC report that does say that the fees should be looked at periodically. Chief Justice Alexander responded that the fees should only be adjusted for inflation; at this time, there is talk of deflation, so there would be no justification for more fee increases. He also noted that the last increase was substantial.

 

There was further discussion about other possible fee increases being considered, such as a .25 percent increase to B&O taxes on professional services not currently subject to retail tax, and a 2.5 percent tax on legal services (up from 1.5 percent).

 

Chief Justice Alexander said that he is opposed to the judiciary taking a position on tax increases in any way, adding that, in his view, it is unseemly. He further stated that, if the judiciary were to endorse a tax increase, it would raise the question of fairness because these matters would eventually come to the courts.  He said that it is important to let it be known what our needs are, and then let them make the decisions. 

 

Ms. Moore reported that the Office of Public Defense (OPD) is going to recommend that all funding requests be withdrawn. She also commented that, even if the March forecast is bad, she does not think it will be as bad as some think. Money-saving ideas have come forward, she said, and the governor has asked for a federal fund bailout like other states, which might come through.   This current downturn is a temporary situation, she opined. It will change; the economy will change. 

 

She also described briefly an effort being made by the criminal justice system, saying that there have been three meetings at the law schools to discuss savings that could be implemented to criminal justice procedures so the cost will go down for the state and local governments. Some good ideas have come up, she said, particularly with regard to DWLS procedures to get them out of the courts.

 

Judge Fleck reported that, with respect to the education issue discussed in previous meetings, she, Mr. Blair and Mr. Cary did a presentation at the King County BenchBar Conference about the Justice in Jeopardy project and received positive feedback.  

 

Ms. Murray, representing the WA State Association of Counties, informed the members that the WSAC had just hired a new staff person – Mr. Brian Enslow, who will be handling the criminal justice issues.   She commented that the governor’s statement about no new taxes has had a tremendous impact on the DOR budget writers, and she predicts that the governor’s budget will be pretty awful. She added that the counties have ugly budgets, too, with deficits that are even deeper than the state’s because of the county tax structure.  She reported that, dollar for dollar, collections are less than both 2008 and 2007. Sixty percent of county revenue is based on property tax, which is capped at 6 percent. Thirty percent of revenue comes from sales tax, which has experienced a severe drop. Ten percent of the revenue comes from REIT and other things.

 

Ms. Murray noted that counties have a “boom-and-bust” revenue base that ties in to the construction industry. Counties had three very good years, she reported, but now the bust has happened, and counties are at a four year low for receipts. No new housing has started, so there will be no new growth. Counties have a big problem for 2009, but will have a bigger problem in 2010. The Implicit Price Deflator (IPD) is expected to be less than 1 percent. Sales tax revenue is going down because consumer confidence is at its lowest point, and no one knows when it will get better. With respect to the housing market bust, it may take four to five years for people to regain confidence. Having a budget that is almost entirely based on those two revenue sources makes it more difficult for the counties and the cities than for the state.   She noted that law and justice expenses take up the lion’s share of the counties’ revenues – approximately 75 percent, so funding for that area will be impacted.

 

Chief Justice Alexander observed that most of the 75 percent of the county budgets that is spent on law and justice goes to jails, prosecutors, and law enforcement. The justice part – the court – is a very small percentage of that 75 percent, he added.

 

Ms. Murray said that the Legislative strategy for the counties will be to ask for new authority by removing non-supplanting language.  Another strategy will be a request for a .1 percent increase to sales tax for mental health and a .3 percent sales tax increase for public safety. 

 

Mr. Hall asked if the counties plan to attempt to raise the 1 percent cap, to which Ms. Murray responded that they do, but only in a very limited form. They are looking at raising the cap for two levies, including the veterans’ assistance levy. Within the county, she added, we are going to have to move funds around in order to sustain services.

 

Judge Fleck commented that the JIJIC has worked very closely with its partner members – counties and cities, adding that the courts are constitutionally mandated and an essential function of government. She said that the JIJIC has worked with the counties and cities on this since 2002, and she is now deeply concerned that the counties would be considering impacting the things talked about without having a high level discussion. She urged Ms. Murray to have a discussion with the BJA before making changes to the funding that the county directs to the local courts. 

 

Ms. Tammy Fellin of the Association of Washington Cities provided a handout entitled “City Fiscal Health and Public Safety Funding” and discussed the information therein.  She informed the members that 64 percent of the state’s population is in the cities.  Of the state’s 281 incorporated cities and towns, 115 cities have their own courts and 19 others contract with them. 139 cities contract with or use county district courts, and 8 cities use municipal departments of district courts.

 

Using 2006 figures, the cities' expenditures on Law and Justice equaled $1,019 million, six percent of which was spent for the courts. Overall, court expenditures of $68 million equaled two percent of the cities’ General and Special Funds of $3.5 billion.

 

There was discussion about offender medical care costs and the fact that more cases in King County will be pushed into municipal courts because the King County Prosecutor has said he will not prosecute property crimes under $10,000. All county prosecutors have that discretion, she added.  AWC is therefore trying to develop legislation that WAPA and WSAC will support to say that, if these cases get referred to the municipal courts, the cities can seek reimbursement from the counties. Also, with respect to indigence defense costs, ten percent of the money goes to the cities and ninety percent to counties, so if the cities get more of those cases, they will need a bigger share of those dollars. On the topic of Driving While License Suspended caseloads, she said that this is an ongoing conversation. The AWC is not supportive of the de-criminalizing of DWLS, but the responses on that are extremely varied. 

 

Jail overcrowding and construction needs were also discussed briefly, with it being noted that, because of jail overcrowding, criminals are being given early releases.

 

Judge Fleck asked Ms. Murray and Ms. Fellin to share the counties’ and the cities’ legislative agendas with the JIJIC by sending them to Mr. Hall or Ms. McAleenan, to which Ms. Murray and Ms. Fellin responded affirmatively. Ms. Murray added that, when the governor’s budget does come out, we may be working together even more to defend the funding. 

Ms. Ferrell distributed the Judicial Branch of Washington State 2009 Budget Priorities promotional materials. 

 

Mr. Hall informed the committee that the decision was made to not include the budget numbers in the promotional packet. He said they will use this when going to the Legislature to present the case for the courts. There is room in the back of the packet to include sheets with the individual groups’ requests, he added.

 

Judge Fleck noted that, because the next JIJIC meeting isn’t until February, it is very important that the partnership with counties and cities and business not disintegrate.   She hopes that the communication will continue, she said.

 

There being no further business, the meeting was adjourned.