Key Findings

1. Washington state statute allows WSDOT to make administrative transfers between transportation projects on a legislatively approved project list less than $250,000 or 10 percent of the total project, whichever is less. Beyond this amount, transfers must be approved by the Governor’s Office of Financial Management (OFM).

2. Between 2011 and 2019, officials shifted approximately $290 million between transportation projects, the majority of it approved by OFM. However, in 2019, the Governor decided to use fund transfer authority to shift $149 million to fish passage barrier replacement, on top of the $100 million increase the legislature had already appropriated.

3. The Governor’s fund transfer in 2019 represents a significant 52 percent of the total $290 million in transfers that have taken place since 2011.

4. This action of increasing funding beyond what the legislature approved for culverts for the 2019-21 represented a major shift from how fund transfer authority was intended to be used. It was rightly criticized by lawmakers as a circumvention of legislative authority.

5. The Governor’s fund transfer did not comply with the intent and historical use of Section 601 fund transfer authority.

6. Lawmakers can adopt a range of policy solutions, from various limitations to the complete elimination of fund transfer authority.

7. Lawmakers should examine, clarify and limit the fund transfer statute to prevent further abuse by the executive branch.

Introduction

Until 2005, the Washington State Transportation Commission (WSTC) functioned as the board of directors that oversaw Washington State Department of Transportation (WSDOT) operations, as well as the appointment of the Transportation Secretary. The responsibilities of the Commission also included (and still include) statewide transportation planning, serving as the state’s tolling authority, and setting fares for state ferries.

The Commission was also in charge of authorizing spending adjustments that WSDOT needed to make between projects, called fund transfers. The legislature’s purpose in granting fund transfer authority was to help WSDOT officials deliver transportation projects more efficiently during interim, moving money from “donor” projects that are funded in excess of what they need in the current biennium, or which are experiencing expenditure delays, to projects that need additional funds for completion.

In 2005, the legislature passed Senate Bill 5513, which made WSDOT a cabinet agency under the authority of the Governor rather than the Commission. A year later, in 2006, the legislature shifted the Commission’s authority to approve fund transfers, moving it over to the Office of Financial Management (OFM).

Fund transfer language has been routinely adjusted over the years. It can be found under Section 601 of the transportation budget (formerly Section 603). As currently written, state statute allows WSDOT to make administrative transfers of less than $250,000 or 10 percent of the total project, whichever is less, without approval from OFM. Beyond that level, transfers must be approved by OFM. 

Read the full Legislative Memo here.