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Dear Friends and Neighbors,

It is great to be back home in the district and seeing many of you after spending 103 days in a regular session and 30 days in a special session in Olympia.

The Legislature adjourned the special session on May 25 after reaching agreements on an operating budget, a capital budget, a debt reduction plan, and workers’ compensation reform. I was disappointed these issues were not resolved during the regular legislative session. Unfortunately, majority party Democrats in the Legislature waited until the last days of the regular session before writing a budget plan for the 2011-13 fiscal cycle, and then they ran out of time. This failed leadership forced the Legislature into a special session that cost taxpayers $320,000.

Below are updates on some of the important issues that were finally resolved. As always, I welcome your comments on these and other issues.

Thank you for the honor of allowing me to serve you.

Now that the legislative sessions have concluded, I have closed our Olympia office and have re-opened the district offices in Walla Walla and Pasco. I invite you to call, write or drop by my offices any time you have questions, comments or suggestions. I share these offices with my seatmate, Rep. Maureen Walsh.


26 East Main, Suite 205
Walla Walla, WA 99362
Phone: (509) 526-6284

2815 St. Andrews Loop, Suite C
Pasco, WA 99301
Phone: (509) 543-3325

NOTE: When e-mailing me, please do not hit reply to this e-mail as I will not receive the response. Instead, I invite you to click here and e-mail me. Thank you!

2011-13 operating budget

On the 29th day of the 30-day special session, the House passed an operating budget that spends $32.2 billion for the next two years to pay for the general expenses of the state, including operations of K-12 schools, colleges and universities, corrections, social services, and other areas of state government. The 2011-13 operating budget spends $1.8 billion more than the previous 2009-11 budget. House Bill 1087 passed the House on a vote of 54-42. I voted against it for several reasons, including:

  • It makes deep cuts to education – our state’s paramount duty. In fact, 41 percent of the reductions come from education totaling $1.7 billion;
  • It shifts a $128 million payment to K-12 schools from June 30, 2011 (current biennium) to July 1, 2011 (the new biennium) – a budget gimmick known as the “25th month” that will increase costs for the 2011-13 biennium;
  • It relies on 84 new or increased fees amounting to $316 million;
  • It gives colleges and universities the authority to set their own tuition rates. As a result, Washington State University is increasing tuition by 16 percent and the University of Washington is considering a 20 percent increase, making it more difficult for middle-income families to afford higher education;
  • It puts public safety at risk. There will be 1,931 fewer offenders on active supervision;
  • It makes deep cuts to long-term care facilities, including the closure of a residential rehabilitation center which serves people with autism; and
  • It leaves only $723 million in the state’s savings account.

We should have prioritized spending in the budget to protect education, public safety and the state’s most vulnerable citizens. With an additional $4 billion of revenue expected over the previous biennial budget, I’m disappointed this budget failed to make these the top priorities of spending.


2011-13 capital budget

The capital budget funds construction and repair of public buildings, la
nd transfers and acquisitions, and community infrastructure projects. The 2011-13 capital budget, which I supported, totals $1.1 billion and represents Washington’s smallest construction budget in the last decade.

Statewide, the capital budget will provide funding for: K-12 school construction; construction at the state’s four-year colleges, universities, community and technical colleges; housing assistance and weatherization; and loans to finance construction, repair and rehabilitation of local infrastructure systems (sewer, water, etc.).

Within the 16th Legislative District, the capital budget will provide more than $54 million for local projects and improvements. It’s estimated this budget will employ nearly 50,000 Washingtonians. The measure, House Bill 1497, passed the Legislature and has been sent to the governor for her consideration.

Lowering our state’s future debt

According to Moody’s Investor Service, Washington state has the eighth highest debt per capita in the nation. Debt per capita in Washington is $2,226, while the national median is only $936.

I was part of a House and Senate bipartisan coalition that supported Senate Joint Resolution 8215. This measure, dubbed “The Debt Reduction Act of 2011,” would have reduced the state’s debt limit from 9 percent down to 7 percent between 2016 and 2022. This would have lowered interest debt payments made from the operating budget by more than $3 billion over 20 years. Unfortunately, the Democratic majority leadership in the House refused to allow this measure to advance.

In lieu of the first bill, a second compromise measure was proposed that passed the Legislature. Senate Bill 5181 sets a statutory debt limit reduction from 8.75 percent to 7.75 percent by 2020, reverses the trend of increasing state debt, and creates a state commission to recommend changes to the state’s debt capacity. Although I preferred the first measure, Senate Bill 5181 is a good step forward to reducing the state’s long-term debt.

Getting Washington working again

With nearly 318,000 people in Washington out of work, including 3,467 in the 16th District, I felt one of our primary goals must be job creation in Washington. “Let’s get Washington Working Again” became the main theme for House Republicans. We believe the best way to increase jobs is to remove excessive regulations and costs that create roadblocks for employers who want to hire. Small businesses did not lead us into this down economy, but they will lead us out. State government needs to be a part of their solutions, not their problems.

I’m pleased to report we were successful in securing major reforms on two fronts: unemployment insurance and workers’ compensation.


One of the barriers to success for our employers, especially small businesses, is the cost of unemployment insurance. Our businesses pay into this system and benefits go to those who have lost their jobs. Unfortunately, employers have been overpaying into this system. Last year alone, businesses had to endure a collective rate increase of $364 million.

Early in the session, I was pleased to support Senate Bill 5135, which provided employers a much-needed reduction of unemployment insurance rates this year. We also passed House Bill 1091, which provides a more stable and long-term fix by recalculating the unemployment insurance tax rates for employers. Both measures were signed into law.


Since 2001, workers’ compensation rates have increased for employers nine times, including a 12 percent increase in January. In 2009, the state auditor said there is a 95 percent chance our system will become insolvent in the next five years. That means only two options: higher rate hikes against employers to support a failing system – or comprehensive reform. To keep the system solvent and help businesses keep their doors open, we chose the second option.

Two measures (Senate Bill 5566 and House Bill 2109) were proposed that would have included a voluntary lump-sum settlement option. State labor officials opposed the lump-sum option, fearing that all the cash would be spent up front and the worker would not have any money left over for later. That concern was shared by House Speaker Frank Chopp, who would not allow the bills to move.

The impasse was broken in the final days of the special session when it was suggested that a voluntary claim resolution structured settlement option be offered. Under House Bill 2123, which I supported and passed the Legislature, workers who accept the option would get at least 25 percent and no more than 150 percent of the state’s average annual wage per month, or between $982 and $5,976, until the settlement is paid in full. The option is available initially to injured workers 55 years and older, then it decreases to age 53 in 2015, and finally to age 50 in 2016. The measure also includes a stay-at-work wage subsidy program as an incentive for workers to return to their jobs.

Successes and disappointments

Every session is filled with successes and disappointments. This session was no different. While I worked on many issues of importance to the 16th District, when it came to two bills I prime sponsored, I had success with one that was signed into law and disappointment with the other that received a hearing but moved no farther.

SUCCESS: House Bill 1334 – Civil judgments against inmates who assault corrections officers

I was pleased the governor signed into law House Bill 1334. This is a measure I introduced that will require inmates who assault correctional officers or other Department of Corrections (DOC) employees to pay monetary damages to those employees.

Under the bill, a state or federal court will be allowed to issue a civil judgment of monetary damages of 15 percent or 20 percent of the inmate’s wages, depending upon his or her level of employment. The money would be deducted directly from an inmate’s earnings and paid to the DOC assault victim.

In other states that have applied the law, monetary damage awards have proven to be a much more effective deterrent against assaults than longer sentences.

DISAPPOINTMENT: House Bill 1513 – Exploring expansion of nuclear energy in Washington

Consumers are using more electricity than ever to operate computers, televisions, server farms, and other equipment. At the same time, there’s a strong push to move away from coal and natural gas, and toward clean, renewable energy sources such as wind, solar and biomass.

Unfortunately, these sources alone will not be sufficient to supplant fossil fuel baseload generation because wind and solar are intermittent. We need a replacement source that would provide constant power to the grid. I believe the answer is to expand nuclear energy.

This year, I introduced House Bill 1513, that would bring expansion of nuclear power into the conversation of a statewide energy plan. The bill sought to create a nine-member legislative task force to study the future potential use of nuclear energy in the state.

A workshop was held March 11 on the bill. Representatives from Energy Northwest who operate the Columbia Generating Station – a 1,150-megawatt nuclear power plant at Hanford – came to testify. In addition, experts from throughout the nation came to be a part of the workshop.

Although the workshop was educational, the timing was bad. March 11 was also the day a massive earthquake hit Japan, subsequently creating breaches in the cooling units of reactors at the Fukushima Daiichi nuclear power site.

The fears created by this disaster essentially put my bill on hold. At least for now. However, I still believe we need to continue this discussion. The Fukushima disaster provides an opportunity for experts to study how they can make nuclear power even safer for the future. We can all benefit from that. Plus, there are major differences in the location and the makeup of the Japan plant and the Columbia Generating Station at Hanford.

While I’m disappointed the bill did not move forward, we must continue considering nuclear power as part of the equation for a future energy plan in Washington state. I will encourage future discussions on this issue.


Terry Nealey

State Representative Terry Nealey, 16th Legislative District
404 John L. O'Brien Building | P.O. Box 40600 | Olympia, WA 98504-0600
(360) 786-7828 | Toll-free: (800) 562-6000