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March 2009
Monday, March 30, 2009
First Reactions to Senate Budget
Posted by Richard S. Davis on 3/30/2009 6:57:00 PM
Here's a quick set of links to coverage of the Senate budget plan.
This Saturday editorial from the Daily World still seems timely. Editor Chris Rush offers this:
I’m no prophet, but I don’t believe
voters here on the Twin Harbors are in any sort of mood to throw more
of their hard-earned wages back into the black hole of state
government, especially as they witness many programs and services being
eliminated.
After having failed to plan for this particular
rainy day at the state level, it would be unwise for elected leaders to
dig deeper into our pockets and ask us to throw more good money after
bad.
Bet that's true for folks outside the Twin Harbors, too.
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Monday, March 30, 2009
Senate Releases Budget
Posted by Richard S. Davis on 3/30/2009 2:18:00 PM
At 10:30 this morning, Senate Democrats released their proposed 2009-2011 budget proposal. I watched the press conference on TVW as did, I imagine, thousands of others. While not exactly 24, it had an immediacy that the budget debate has lacked through much of this legislative session. That's because we were finally seeing the numbers. (Go to the Senate Ways and Means Committee web site to download documents.)
Senate Majority Leader Lisa Brown said they were presenting an "honest and responsible budget that does balance our revenues and expenditures." It "does not eliminate the social safety net," she said, but does trim many social service programs. Higher education absorbs a more than $500 million hit. As well, K-12 programs that fall outside the definition of "basic education" were also cut. Initiative 728 and Initiative 732, class size reduction and cost-of-living raises for teachers, respectively, were suspended. Federal stimulus dollars were targeted to backfill much of the 728 cut. The budget summary says that "the net reduction in school district funding will average 3.5 percent."
As expected, there's no cost-of-living increase for any employees, and the annual "step increases" for management employees are suspended.
In addition to the federal stimulus money, the budget uses nearly $750 million in funds that usually go to the capital budget, $242 million in fund transfers, and $450 million in rainy day money. One analyst pegs the use of one-time money at $5 billion in total. I suspect that's about right. If so, under the slow-recovery scenario most envision, this budget still fails to come to grips with the state's need to reset spending to a sustainable level.
Although the Senate leaders said they had not yet decided on a tax package, most of us figure there's another shoe left to drop. Just a few minutes ago, Sen. Brown put up a post suggesting it's time to talk about an income tax.
We hope to have a WashACE analysis of the budget available later this week.
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Sunday, March 29, 2009
Next Week is Budget Week
Posted by Richard S. Davis on 3/29/2009 1:49:00 PM
The Senate budget comes out Monday, with the House version scheduled for a Tuesday release. The initial releases, with no revenue package attached, suggest dire consequences, inviting interest group support for higher taxes.
Budget writers in both chambers have talked about a $9 billion
budget shortfall for 2009-11. But that’s a misleading term, referring
to the shortfall between the hopes of continuing spending levels from
2008 and the reality of state revenues available in 2009-11.
[Sen. Rodney] Tom said earlier this week that cuts to real programs amount to about $3.7 billion to close the $9 billion gap.
We continue to believe that, difficult as the resetting will be this session, spending must be reset to a sustainable level - a level not requiring increasing the tax burden on families and employers.
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Sunday, March 29, 2009
Worker Privacy Act: A Wedge Between Labor and Democratic Leaders?
Posted by Richard S. Davis on 3/29/2009 1:15:00 PM
Last week in an apparently tense session labor leaders met with Gov. Chris Gregoire, Senate Majority Leader Lisa Brown and House Slpeaker Frank Chopp - the leaders who tabled the Worker Privacy Act after learning of an email that tied campaign contributions to legislative action. Most of the press coverage following the meeting focused on union concerns.
"This entire incident has severely strained labor’s relationship with Democratic leaders," said WSLC President Rick Bender . "We still consider their actions to have been a dramatic over-reaction especially after the Washington State Patrol and the Public Disclosure Commission quickly determined no legal or ethical wrongdoing. Democratic leaders offered no explanation at Wednesday’s meeting to counter assertions that their actions were anything but a pretext for blocking the Worker Privacy Act at the insistence of The Boeing Company.
Union considerations also factor heavily in what's being reported as an emerging split within the House Democratic Caucus.
Some members say the Democratic caucus is splitting into pro-labor and
pro-business camps. Those who consider themselves more pro-labor
complain that lawmakers aren't doing enough to address such issues as
climate change or worker rights.
But, Kris Tefft notes at Olympia Business Watch, labor scored two big - but we hope inconclusive - wins in the House Commerce and Labor Committee late last week.
The committee moved ESSB 6035,
the bill that would impose new restrictions and regulations on trade
associations that operate voluntary retrospective ratings programs in
workers' comp. It then amended and moved SSB 5963,
a delicate and heavily brokered effort to bring the state's
Unemployment Insurance tax system back into conformity with federal
law.
Watch for more on this in the coming days.
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Wednesday, March 25, 2009
Light Blogging Ahead
Posted by Richard S. Davis on 3/25/2009 4:29:00 PM
I'll be away at meetings for a few days with limited opportunity to post here. Back to you soon.
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Tuesday, March 24, 2009
Budget Rollout May Be Delayed
Posted by Richard S. Davis on 3/24/2009 4:53:00 PM
Sen. Rodney Tom, vice chairman of the Senate Ways and Means
Committee, told me a few minutes ago that he was pretty certain the
budgets would not come out this week.
However, House Majority Leader Lynn Kessler said she felt both sides
were very close to an agreement and it's still possible for the budgets
to be released this week.
The two chambers have been working together this year, with the House budget expected to come out a day after the Senate release. As Garber writes, by agreeing on the major cuts Democratic leaders hoped to reduce divide-and-conquer strategies from affected interest groups.
David Ammons, spokesman for Secretary of State Sam Reed,
just told me the Legislature would have to decide by "early to
mid-April" if it wants to put something on the June 30 ballot. (That's
a Tuesday, by the way.) And they'd have to act quicker if they want a
vote earlier in June.
I called Ammons because I got word that county auditors -- the local
elections folks -- were being alerted to a possible special election in
June.
A June vote is important if the new taxes are tied to education. The public schools put together their budgets early. August is tough. November is too late.
They should just shelve the tax hike question altogether. Don Brunell points out the budget can be balanced without new revenues.
Now is not the time to burden taxpayers with another layer of costly
government programs. And this is not a problem outside our reach. We
should be prioritizing within the state budget based on the income
available, just as Main Street does with its books every day.
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Tuesday, March 24, 2009
PDC Clears Union Email; Governor Says She'd Have Vetoed Gag Rule Anyway
Posted by Richard S. Davis on 3/24/2009 12:31:00 PM
In this morning's Everett Herald, Jerry Cornfield reports that the Public Disclosure Commission will not pursue action against the union lobbyist who sent a controversial email that got the Worker Privacy Act legislation tabled for the session. You'll remember, that's the "not another dime" email, saying no more union contributions unless lawmakers pass labor's top priority, a gag rule on employers. After learning of the email, Gov. Gregoire, Senate Majority Leader Lisa Brown, and House Speaker Frank Chopp referred the email to the Washington State Patrol and killed the bill.
Stay tuned. Somehow, it doesn't look like this is over yet.
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Monday, March 23, 2009
Legislators Looking at Taxes; Gov. Gregoire Agrees They May Be Necessary
Posted by Richard S. Davis on 3/23/2009 3:32:00 PM
KIRO radio's Tim Haeck reports that, while legislators haven't shared their tax plans with her, Gov. Gregoire thinks new taxes are required. That's a shift in her oft-stated opposition to raising taxes during a recession, though she's generally said that if the Legislature wanted to submit a package to ther voters, they were free to do so. Here's the problem, in her view:
...Gregoire says it's a horrible time to hike property taxes or business
taxes, "That leaves you with a sales tax. One of our major problems
right now is a lack of consumer confidence. So people aren't buying
anything so I don't know how much that really gets us?"
The tax coalition may be unraveling, as members grow frustrated with the options, according to Austin Jenkins report on Crosscut. He notes that three labor groups have left the coalition, citing opposition to tax proposals that fall most heavily on "working families."
The UFCW's frustration with the "coalition" seems to support what
many in the legislature are hinting - that the leading contender for a
tax hike package is a temporary increase in the state sales tax.
The Washington State Labor Council, an umbrella organization, says
it left the coalition because its affiliates began bowing out and it
wanted to show support for them. In an email, the Labor Council’s Kathy
Cummings adds her group isn’t confident the tax effort will succeed.
Read Jenkins' report: It's a good summary of the challenges tax-boosters face this year.
The governor also allowed as to how there might be two tax-hike
measures on the ballot this fall: one for the operating budget; a
second one that would take the form of a bond measure that would pay
for school construction and create jobs.
That timetable would not be much help to folks wanting a tax hike for the public schools. They'd need a June election to give them timely budget certainty, something House majority leader Lynne Kessler told a business group tleadership is considering.
Sixty-four percent of those polled would approve a temporary 1-cent
increase in the state sales tax. This could generate more than $1
billion over a two-year period.
As she writes, it's not enough to close the gap.
She said that although she supports the Legislature's efforts to look at
tax options, it's "an open question whether I'll support it."
Garber quotes Gregoire spokesman Pearse Edwards as saying the governor hasn't changed her position.
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Friday, March 20, 2009
New WashACE brief Pegs Shortfall at from $4 Billion to $6 Billion
Posted by Richard S. Davis on 3/20/2009 6:11:00 PM
The WashACE budget brief mentioned here is now available for downloading here (if the download doesn't work, please go here). The brief, prepared for us by the Washington Research Council, breaks down the components of the budget shortfall and assesses the deterioration of state revenues.
Read the whole thing. It provides valuable perspective on the state budget shortfall.
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Friday, March 20, 2009
Revenue Growth Nearly Flat with Yesterday's Forecast
Posted by Richard S. Davis on 3/20/2009 12:58:00 PM
Yesterday the Economic and Revenue Forecast Council met to approve the official March forecast. This is a big deal because it sets the frame for state budget writers, telling them how much they'll have to spend in this budget cycle and the next. As expected, state forecaster Arun Raha had little good news to report. Since our last official revenue forecast in November, the state economy has weakened considerably. The weakness in housing activity and auto sales has spread to other sectors of the state economy – non-residential construction, manufacturing, aerospace, software publishing and retail sales. Our new baseline forecast assumes that the U.S. and Washington economies will be in recession for most of this year, flattening out sometime late in the third quarter. Growth will remain flat in the first half of 2010, and improve only in the second half of the year. Job losses will continue even after the economy is in recovery.
Taking away the policy items and adding the stimulus money, the shortfall approaches $4.5 billion. (A new WashACE Competitiveness Brief to be released later today goes into this in some detail.)
If you take emergency state reserves, the federal stimulus money
recently approved by Congress and some other recent belt-tightening
moves into account, the real problem the Legislature has to solve is
around $4 billion. That figure includes leaving several hundred million
dollars in reserve.
That's still an enormous, and unprecedented, shortfall.
Agreed. But still much more manageable than the touted $9 billion.
The News Tribune reports on budget deliberations, with Joe Turner writing that the Senate may run out its budget by the end of next week. He also notes the current year deficit.
Victor Moore, budget director for Gov. Chris Gregoire,
said the revenue forecast puts the state back in the red and that state
will have to dip into its $430 million Rainy Day savings account and
use more federal stimulus money to balance the current budget, which
comes to a close on June 30.
Rich Roesler writes on his Spokesman-Review blog of some of the anticipated cuts.
Brad Shannon provides useful links for folks wanting more detail.
Adam Wilson reports on the growth/decline numbers: general fund is down some, near general fund up 0.2 percent as we noted above.
And plenty of speculation about taxes, but no one is saying much definitively. Austin Jenkins finally gets his public records request answered and tells us what some legislators are considering. It doesn't add up to a lot and may not make it past the "what if" stage.
For the record, no one has specified a tax package for a public vote. Some Tacoma-area legislators are telling constituents to brace for cuts.
What we've heard is that there may be a single package, several designer packages earmarking tax hikes to specific programs, and no package. That latter option is generally seen as a bridge to tax hikes next year, when they can be passed by a simple majority vote. The thinking is that after the public experiences the so-called "all cuts" budget, they'll be more in the mood to support tax hikes. First the pain of the cuts, then the, well, pain of the tax hikes. If, as expected, education programs are among the options for a voter-approved tax package, the election would have to be held in June. You can't begin a school year without having the revenue side nailed down - a November tax increase is too late.
If voters reject a tax package, that makes it more difficult for legislators to raise taxes in the 2010 session, which might be one reason to forego the vote now and adopt a no-tax-hike budget.
Enough speculation for now. We'll know more soon.
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Monday, March 16, 2009
Boosting the Business Climate by Delaying Cap-and-Trade
Posted by Richard S. Davis on 3/16/2009 2:58:00 PM
At this time, the governor's ambitious cap-and-trade legislation is headed nowhere, which counts as a victory for the business climate, whatever you might think of its dubious merits as a climate change vehicle. Warren Cornwall has a good story on the politics in the Seattle Times.
House Speaker Frank Chopp, D-Seattle, said many fellow Democrats
voiced concern about the economic toll new regulations could take on
businesses already shaken by the recession. He also has heard doubts
about a market for pollution permits.
"With what's happened in the last year, one would wonder about the
wisdom of the markets," Chopp said. "Remember energy deregulation?
Well, that didn't turn out so well."
A February WashACE report challenged the economic modeling relied on by cap-and-trade promoters and estimated the proposed system would have imposed nearly $3 billion in new costs on Washington businesses by 2020.
Cornwall quotes AWB's Grant Nelson:
"Especially given the economic crisis that is facing Washington, the
Legislature has shown leadership and understanding in moving forward
this session on climate-change legislation in a more responsible
manner," said Grant Nelson of the Association of Washington Business,
which opposed Gregoire's legislation.
Right. Seattle's two major dailies both argue that the state should have jumped the queue and passed legislation ahead of the national consensus.
If Washington's economy is perceived to be too vulnerable to move
ahead, the governor and legislative leaders need to say so. Is more
time needed to perfect a workable plan, or is this a big step backward?
Yes, the economy is too vulnerable. And yes, more time is needed to perfect a workable plan. Nope, not a step backward, just a responsible recognition of economic reality.
But it seems that many Democrats in the Legislature are green posers
who talk a good game but turn a cowardly shade of yellow when action is
needed.
I think it took courage for Democratic leaders to stand up to their green constituents and refuse to engage in an irresponsible rush to regulate.
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Monday, March 16, 2009
What's It Going to Take to Keep Boeing?
Posted by Richard S. Davis on 3/16/2009 1:30:00 PM
John Stanton, chair of the Washington Roundtable, and Snohomish County Executive Aaron Reardon ask and answer the question in a must-read op-ed in yesterday's Everett Herald. Read the whole thing, but here's a sample:
If lawmakers act promptly on a couple essential,
commonsense issues, they can improve the business climate for Boeing
and for thousands of other small and large businesses.
Here's what they need to do:
* Budget responsibly and hold the line on tax increases. Faced with a
multi-billion deficit, state lawmakers must make a series of difficult
budget decisions in the coming weeks -- the same kinds of decisions
city and county governments and nearly every business and family across
this state are making. Some lawmakers are calling for tax increases,
saying the budget cannot be balanced without them. Forget about it.
Employers and families are struggling. The vast majority of voters
oppose tax increases, and rightly so. Higher taxes will hurt working
families, exacerbate the state's economic problems and stall recovery.
* Reduce business costs. In a global economy where companies can operate
anywhere, location decisions often come down to cost. And Washington is
more expensive than its competitors. Washington businesses shoulder 51
percent of the state and local tax burden. Unemployment insurance taxes
for employers here are the second highest in the nation. Worker's
compensation benefits are the third highest. And, Washington is one of
very few states with a gross receipts tax. To keep Boeing, or any other
manufacturer or large employer, our state must reduce employer costs as
compared to other states. It's too easy to move jobs elsewhere if we
don't.
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Monday, March 16, 2009
Expect Another Revenue Trim Thursday
Posted by Richard S. Davis on 3/16/2009 12:19:00 PM
The most recent economic forecast from the Economic & Revenue Forecast appears to confirm predictions that Thursday's official revenue forecast will further reduce estimates of state tax receipts for thirty odd months. Here's how state economist Arun Raha describes it.
Compared to the preliminary forecast, our updated Washington economic forecast is generally weaker, as a result of the weaker national economic forecast.
Following three months in which actual collections lagged the already-reduced November forecast by about 5 percent, this is clearly anticlimactic, but it ought to spur action on the major task before the Legislature in its final fifty days (we hope final fifty). Several good accounts in the weekend papers describe the situation and reveal what went on at a few town halls hosted by Democratic lawmakers.
Washington did get a lot of money from the federal stimulus package
– almost $5 billion. But about $2 billion is going to highway, water,
sewer, school and other construction projects or must be spent on other
things that make it of little direct help to the state operating
budget. For instance, some of the money is passing through the state
treasury but is headed straight to cities, counties, transit districts
and others to help with their budget problems.
Moreover, the $3
billion that is helpful to the state is limited to a three-year period,
and the Legislature already has spent $340 million of it.
It's a lot of money. But, as Turner writes, there's still a hole to fill.
If all of the governor’s spending cuts were adopted, the Legislature
would have to deal with about a $1.5 billion to $2 billion gap between
spending and tax revenues. That assumes Thursday’s forecast lowers
revenue collections by another $200 million.
He notes that the $1.5 billion to $2 billion have health and social service advocates working hard to gain legislative support for tax hikes, including polling to find the right package. He quotes Sen. Joe Zarelli pushing his plan to solve the problem without raising taxes.
Zarelli said the state should freeze spending at today’s levels. Not
all spending can be frozen – utility bills will be higher, landlords
will charge higher rent to state tenants – but state agencies should be
given the same amount of money they got for the past two years and be
told to live with it, he said.
“If business can do it and homeowners can do it, government can do it,” he said.
The Kitsap Sun reports that Sen. Derek Kilmer, D-Gig Harbor, believes lawmakers will pass what he and others call an "all cuts" budget. (In fact, the next budget will be made up of cuts and increases; what they call "all cuts" will be a budget without tax increases.)
Proposals to generate revenue will, in all likelihood, not be part of
the Legislature's strategy to address an $8.5 billion state budget
deficit — at least, not in this session, Kilmer said.
But he thinks tax hikes are coming.
He predicted that a tax measure of some sort is likely in the next biennium.
The Associate Press reports on the Bellevue Town Hall. After running down the options, the report describes the Democrats' endgame. Balance the budget with spending cuts that are deep and broad, combined with one-time fixes like the federal stimulus bailout.
After
that budget becomes law and the cuts become reality, voters will have
to consider a tax increase that would pay for specific programs not
bankrolled in the bare-bones budget.
Lawmakers know that could
be a tough sell in this economy. In the Senate, which takes the first
crack at balancing the budget this year, "We're not betting that the
public is going to say yes," [Sen. Rodney] Tom said.
Better not to waste everyone's time. Set priorities, identify efficiencies, and pass the budget within available revenues.
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Friday, March 13, 2009
Senate Passes Revenue Smoothing Amendment: To the House, Then the Voters
Posted by Richard S. Davis on 3/13/2009 4:58:00 PM
Yesterday the state Senate passed SJR 8209, a proposed constitutional amendment that would divert "extraordinary revenue" to the rainy day fund. It's a sensible plan for moderating the ups and downs of state revenues, reducing the opportunity for overspending in the good times and building the reserve for the bad times. Here's the Columbian story on the bill.
[Sen. Joe] Zarelli's proposed constitutional amendment would define revenue
collected in excess of 133 percent of the state's 10-year revenue
growth average as "exceptional" and automatically deposit it in the
state's rainy day fund.
Zarelli, a Ridgefield Republican,
worked with Senate Democratic Leader Lisa Brown of Spokane to win
passage of Senate Joint Resolution 8209 by a majority well in excess of
the required two-thirds vote. All the senators who voted against it
were Democrats.
On one level, at least, it is an example of closing the barn door after the cows have already fled.
More important, he writes:
It’s a good idea now, but would have been a great idea five years ago.
Had it been in place, the Legislature and governor wouldn’t have spent
the money that flooded the state treasury in the midst of the housing
boom.
Read Callaghan's column. It's a good read and clearly lays out the politics.
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Thursday, March 12, 2009
Worker Privacy on Life Support?
Posted by Richard S. Davis on 3/12/2009 6:02:00 PM
Worth noting: Nothing's dead while the Legislature's in session.
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Thursday, March 12, 2009
Budget & Tax Plans Begin to Emerge
Posted by Richard S. Davis on 3/12/2009 3:19:00 PM
With the pivotal March revenue forecast coming out next Thursday, we're beginning to see what the budget might look like. It's going to be rough.
Budget cuts under consideration by a state House subcommittee include
more than $2 billion in reductions in health care and human services,
potentially twice as many cuts in health care as what Gov. Chris
Gregoire proposed.
• Elimination of the Basic Health Plan's subsidized insurance for about 100,000 of the working poor. Gregoire proposed cutting its funds by 42 percent.
• Elimination of a so-called "GAU" cash grants and health program for 22,000 unemployable, needy people. Gregoire called to dismantle it.
• Elimination of an adult day health
program that gives respite care to low-income and disabled people who
are cared for at home by family members. Gregoire also sought cuts.
• Cuts 10 percent deeper for nursing homes than what Gregoire proposed.
• Elimination of "backfill" money given to county public health programs after passage of Initiative 695 in 1999.
The story confirms much of what's been suggested previously. The Olympian also reports that interest groups continue to poll in search of a tax package voters might buy. Curt Woodward with the Associated Press has additional detail on the polling.
In an interview with The Associated Press, Washington State Hospital
Association spokeswoman Cassie Sauer says the coalition is planning
another round of polling, to narrow down options for a possible tax
vote.
Labor unions and environmentalists are also part of the coalition working with lawmakers on a possible tax vote.
The group's first round of polling showed voters might be open to
"sin" taxes and even some broader sales tax increases, depending on
what type of state programs could be saved.
Sin taxes don't cut it. And anything puts more jobs at risk. Joni Balter at the Seattle Times has it right.
A tax increase is the worst possible solution to what ails the state. Which tax would you raise, she asks, and by how much?
An increase in the business tax is not smart in a great
recession-depression. Property tax should be an absolute no in a
foreclosure-crazed climate. A sales-tax boost? Though that is the most
likely scenario, somebody please explain how it helps struggling
middle- and lower-income families.
Spending cuts, even hacking into generally untouchable benefits for state employees, offer the better course.
That's right.
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Wednesday, March 11, 2009
Revenue Collections Down Again, But Trend is No Worse Than Expected
Posted by Richard S. Davis on 3/11/2009 1:01:00 PM
Yesterday's The News Tribune and The Olympian, The official March revenue forecast comes out March 19. Based on the actual collection reports, it will again be down about 4-5 percent. But we'll know soon enough.
As we read these things, some wonder about an apparent lack of legislative urgency. When are they going to get serious about the budget? Of course lawmakers have known that they'll have less to spend now than the governor thought she add in November. So, presumably, they're quietly working hard to come up with a realistic budget, one that doesn't rely on unlikely voter approval of new taxes and one that sets the state on a "reset" sustainable spending pattern. In addition to declining revenues, they face some unavoidable increased spending for school enrollments and social service caseloads.
The governor has acknowledged sin taxes, the first recourse of the desperate, won't provide much new money.
According to a fly on the wall of the caucus room, during her
briefing Brown told her fellow Democrats that polling showed "90
percent of the public knows we have a serious financial problem..."
And Sen. Craig Pridemore, D-Vancouver, immediately quipped, "..and the other 10 percent are in the Legislature."
That's my latest nominee for Quote of the Session.
If you have a better nominee, let me know.
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Wednesday, March 11, 2009
Worker Privacy Bill Dead
Posted by Richard S. Davis on 3/11/2009 12:22:00 PM
The good news is that, according to multiple and mysterious reports this morning, the Employer Gag Rule is dead.
The bad news is that it was pulled from consideration, not defeated on its lack of merit.
Adam Wilson's blog more than implies that there may be more to this than unusually inept lobbying by, presumably, union backers of the bill.
My reporter senses are tingling here, because it's awfully convenient.
This was a major contention point between two powerful interests,
unions and business, and now it goes away through no fault of the
decision makers.
I'm not sure exactly how that works. Someone does something stupid and leadership magnifies to to avoid a tough vote? Maybe. But it seems like a stretch. Rather than speculate, I guess we'll have to wait and see.
Jerry Cornfield, who had a good account of the "contention point" in this morning's Herald, provides the saga's timeline, suggesting that while the investigation continues, hard facts may be in short supply.
UPDATE Jennifer Sullivan has a more complete account at the Seattle Times blog, including statements from the governor and legislative leaders, as well as the state patrol, which isn't saying much. She also reports that the state labor council scheduled and canceled a press conference, declining comment for now.
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Monday, March 09, 2009
Welcome to the New WashACE Website
Posted by Richard S. Davis on 3/9/2009 11:26:00 AM
This morning we unveil the new look for the WashACE site. I hope you like it.
The new design makes clear our competitiveness priorities, the four rotating items at the top of our page, and highlights our growing number of supporters. We think it's an easy site to navigate and provides us a good platform for adding new features over time.
We've imported all of the content of the previous site: WashACE research reports, candidate questionnaires and voting records, and blog posts.
Look around. And let me know what you think.
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Thursday, March 05, 2009
A Roundup Before a (Temporary) Signoff
Posted by Richard Davis on 3/5/2009 5:41:00 PM
Spent the day in Olympia and away from the keyboard. Here's a quick wrap-up of stuff I found interesting: The Spokesman-Review nails the Employer Gag Rule. Allowing businesses the discretion to choose whether employees stamp out widgets or spend an hour attending a meeting on company time is not coercive and does not erode any workerƒ?s right to make up his or her own mind about the issue at stake. However, removing that discretion would invite costly and probably futile legal challenges. Worse, it would give businesses that are either in Washington or thinking about it a reason to consider one of the other 49 states. More on the so-called Worker Privacy Act at Olympia Business Watch. The News Tribune identifies components of a likely tax package. Adam Wilson has more.on the what lawmakers may consider. Caution: Not for the faint of heart. Don Brunell looks at how the green economy is working out in California. Hint: Not so well. And the state Supreme Court rejected Sen. Lisa Brown's challenge to Initiative 960. All in all, a good day. We're working on moving WashACE to a new website over the weekend. A cool new look, more features, and a different blogging platform. So, this will be the last post here for a few days while we get things stabilized. We'll be at the same address, www.washace.com. Keep your fingers crossed for us (or whatever it is you do for good luck). Talk to you soon.
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Wednesday, March 04, 2009
More Calls for Budget Transparency, Action
Posted by Richard Davis on 3/4/2009 11:53:00 AM
This morning, the Seattle PI editorial board called on the Legislature to "make bold changes" in its way of thinking and tackle the budget challenge directly and swiftly.
So far, the Legislature and the governor still haven't fully faced the horrendous losses in health, education and social services that can occur in what is called, with only some exaggeration, an $8 billion budget gap. We do see bright spot that could point the way toward transcending politics as usual. Gregoire stood up to public employee unions by proposing wage freezes. In the Legislature, Senate Majority Leader Lisa Brown signed on as a co-sponsor to Republican Sen. Joseph Zarelli's measure to guarantee that, in the future, any exceptional jumps in revenues go into the state's rainy-day savings fund, not regular spending.
They also include a nice mention of the Washington Alliance for a Competitive Economy. Austin Jenkins, meanwhile, continues to search in vain for information about lawmakers' tax plans. The latest email confirmed what I suspected. The email reads in part: ƒ?ƒ?more time will be needed to finish our response to your public records request. The remaining records consist of communications between the Department of Revenue and the State Legislature. The Department and the Legislature are currently evaluating whether any exemptions or privileges apply to the documents that are responsive to your request.ƒ Translation: The Legislature maintains it can invoke ƒ?legislative privilegeƒ when it doesnƒ?t want to make public certain documents. This includes emails. It also apparently includes when lawmakers ask a taxpayer funded state agency to analyze a potential piece of legislation. As Jenkins notes, the delay serves lawmakers much more than it serves the public. He'll keep at it. More discussion at Sound Politics. Obfuscation and delay also characterize a peculiar bit of silliness that took place in the House yesterday. As Joe Turner reports in his TNT blog, Republicans tried to get a ruling on whether repealing a tax exemption is the same thing as a tax increase. It matters because tax hike require a two-thirds vote, hard to get in the best of times. Turner includes the GOP press release. It's worth reading. Bottom line: the acting speaker said because the requested ruling addressed hypothetical, he would not respond. Let's be clear. If legislative action causes someone's taxes to go up, it's a tax increase. Although, as Turner notes in an earlier post, House Bill 2212...appears to be an attempt to "clarify" that repealing a tax break isn't really raising taxes for anyone. Reminds me of the Lincoln riddle: How many legs does a dog have if you call its tail a leg? Still four, calling a tail a leg doesn't make it one. "Clarifying" the definition of a tax hike doesn't alter the facts, either.
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Tuesday, March 03, 2009
Revenue Smoothing Amendment Passes Key Committee
Posted by Richard Davis on 3/3/2009 5:18:00 PM
Yesterday, SJR 8209 passed the Senate Ways and Means Committee. The proposed constitutional amendment, sponsored by Sen. Joe Zarelli and cosponsored by Senate Majority Leader Lisa Brown, would take a share of "extraordinary revenue" and put it in the state's Budget Stabilization Account, aka the "rainy day fund." The legislation does two important things: It reduces the money available for overspending in the good times and it builds the reserve for the bad times. It's the latest in what's been long struggle to end the binge-and-purge budgeting that accompanies the revenue roller coaster: overspending during the periodic revenue surges (tech bubble, housing bubble) and blood-letting sessions when the revenues plunge (2001, now). In 1993, the voters handed lawmakers a solution when they passed Initiative 601, a tax and spending limit that tied spending growth to population and inflation. Further, it required supermajority legislative approval or voter approval to raise taxes, depending on the circumstances. It worked for a while, but amendments and legislative gaming weakened it considerably over the years. In 2007, voters tried again with Initiative 960, which reinstated much of I-601 and added disclosure requirements. The supermajority requirements are now being challenged in Court. Also that year, legislators adopted a constitutional rainy day fund. The proposal was another Zarelli idea backed by Gov. Gregoire and Sen. Brown. It's good to see sensible, bipartisan agreement on a measure that can bring some stability to the state's budget cycles. To get an idea how this might work, check out this Senate Ways and Means graph.
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Monday, March 02, 2009
Seattle Times Explains What's Wrong with the Employer Gag Rule
Posted by Richard Davis on 3/2/2009 4:23:00 PM
Well, everything is wrong with the so-called Worker Privacy Act. But the Seattle Times offers a concise argument against it. After they review the bill's legal flaws, the editorial touches on the negative message the bill sends.
A company should be able to tell its employees what it thinks about a contract offer or what union representation entails. The employees don't need to be shielded against what the boss thinks other than the shield they already have against his threats and promises. They can think the way they want and vote the way they want.
This bill is entirely one-sided: It restricts employers but not unions. It tilts the balance in a way that has not been done in any other state. And already Washington is one of the most union-friendly states. The Legislature should scrap this bill and focus on balancing the budget. See other comments at Olympia Business Watch.And then call your legislators and urge them to oppose this job killing legislation.
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Monday, March 02, 2009
A Constitutional Right to Health Care?
Posted by Richard Davis on 3/2/2009 3:19:00 PM
Adam Wilson reports in the Olympian that House Speaker Frank Chopp is backing a constitutional amendment making health care for children a constitutional right. Speaker of the House Frank Chopp said Friday that he wants coverage for children to become part of the state's fundamental obligation to children, like basic education. "Sometimes it will look like we're pitting education for our kids versus health care for our kids. We have a historic opportunity to mingle those together, to move both groups forward," Chopp told a crowd of 150 during a children's services rally Friday at the Capitol. It's true, health care and education are the two largest shares of state spending. In recent years, as this WashACE brief points out, Health-related expenditures accounted for more than one-third of state general spending in the 2005ƒ?07 biennium, an increase of nearly 8 percentage points from their share of spending in 1997ƒ?99. Over the period, the growth in healthcare costs squeezed other spending priorities. Looking to the future, as health-related expenditures represent an ever-increasing share of overall spending, the squeeze their growth places on other priorities will become more severe
I've not seen any detail on the plan Wilson reports, but we know that the constitutional requirement making basic education the paramount duty of the state has spurred lots of costly litigation.
Think it'd be any different with health care? This TNT editorial on national health care reform points out the problem: Universal access to quality care cannot happen if costs arenƒ?t controlled. Cost and access are the same problem. And costs are least likely to be controlled when a generous Congress pretends to offer patients something for nothing.
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Monday, March 02, 2009
What's Happening with the Budget?
Posted by Richard Davis on 3/2/2009 1:30:00 PM
On Day 50, it's still hard to tell. Friday I posted a short item indicating that legislative leaders think they're doing pretty well. But, as we knew on Day 1, the budget is the $1.5 billion (or $8 billion) gorilla this session. It's the beast that must be tamed before lawmakers go home. Among the sadly dwindling team of reporters covering the Legislature, some are showing impatience with the pace and transparency of budget deliberations. This late in the game, it's fair to assume that one of two things is true: Either there's a plan for resolving the shortfall and no one's willing to talk about it, or there's no plan and no one's willing to admit it. Neither option is particularly appealing. Joe Turner, whose earlier TNT blog post brought the tension into the open, published some additional comments from anonymous insiders yesterday. First, let's look at what Turner wrote in the original post. I'd love to be able to tell you that Democratic leaders are showing all kinds of leadership, but we'll have to take their word for it. Because if they are, it's all behind the scenes. And they won't give us a glimpse.
Moreover, he suggested that the media factored into legislative strategy to set us up for a tax hike. We in the Press Corps are supposed to soften you up. You voters. We're supposed to write stories about how bad things are going to get if you, the voters, don't agree to approve whatever tax package they put before you.
It's a game reporters aren't willing to play. In yesterday's post, Turner quoted extensively from two insider emails. Here's what one has to say. Read the whole post. We are facing either deep cuts or tax increases. Let's get the facts out on the table as soon as possible, and have a real debate that engages the whole citizenry, and then decide what kind of state we want to be. I trust the people to make fair decisions, but only if they have the facts in sufficient time to really digest the information and weigh their options.
The Olympian's Brad Shannon offers another perspective, suggesting why things may be happening beneath a dome of silence. The simplest answer is the Democrats are at a complete loss over what to do. They waited for the stimulus package to help, but the preliminary revenue forecast of Feb. 19 showed new revenue losses that pretty well wiped out the gains from the stimulus. The Democrats don't appear to have any answers yet.
But if lawmakers donƒ?t have a public willing to pay for tax increases, and they donƒ?t think they have time to build a case before the end of session on April 26, maybe it makes sense to hide the cuts until after the March 19 revenue update. Then they would have five weeks to pass an ugly budget and run home. Shannon cites this Survey USA poll showing that 70 percent of Washington voters think raising taxes is a bad idea. At Publicola, Josh Feit turns to Facebook to see what legislators are thinking. In the end, though, I think this editorial from the Yakima Herald-Republic pretty much sums up public sentiment. What does appear likely is some sort of tax measure ending up in the laps of voters. A growing contingent of Democrats believes the state really has no other choice and that voters will pass a tax increase because the alternative -- severe cutbacks -- would be too painful to endure. Not so fast. We don't believe the state has reached this point of no return.
It hasn't. And it's time for lawmakers to lay out their budget balancing strategies, the ones that don't rely on new taxes. There will not be a taxpayer bailout. More media comments from Sam Taylor at the Bellingham Herald and Rich Roesler at the Spokesman-Review.
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