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Current Affairs
Thursday, May 07, 2009
Some Session Perspective
Posted by Richard S. Davis on 5/7/2009 4:42:00 PM
Two podcasts at AWB's Olympia Business watch ( Part 1 and Part 2) take a look at the recently-concluded legislative session. In this column, I take a look at the legislature's uneven budget performance. They simply must engage the public in a constructive conversation about
this state’s overreliance on property and sales taxes and how the
missing third leg of the stool — an income tax — is necessary to level
out the revenue peaks and valleys that this state constantly
experiences.
Peaks and valleys that are routinely experienced in every state when the economy swirls down the drain. Oh well. There are good arguments for considering an income tax, but immunizing the treasury from the fiscal flu isn't one of them.
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Thursday, May 07, 2009
No Special Session
Posted by Richard S. Davis on 5/7/2009 3:38:00 PM
This just in from Speaker of the House Frnak Chopp and Senate Majority Leader Lisa Brown:
“After a conversation today between Gov. Gregoire, Speaker Chopp and
Majority Leader Brown, the three leaders decided against a special
session.”
Make your vacation plans.
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Thursday, May 07, 2009
Special Session? We Should Know Today
Posted by Richard S. Davis on 5/7/2009 1:46:00 PM
Little came easy this legislative session. And that goes for discussions about whether to extend it to handle unfinished business.
You'll remember that shortly after the clock ran out on the session, Gov. Gregoire said she'd call lawmakers back for a one-day session. (The link is to Adam Wilson's story in the Olympian.) Details, like what were the must-dos and when must they be done, remained to be worked out. As time passed, urgency waned. Wilson reports that Tuesday the governor told Democratic leaders, "time's up." A decision needed to be made this week. The AP's Rachel La Corte summarizes the issues in a story the Everett Herald headlines "Gregoire may cancel special session." (Can you cancel something that's never been scheduled? Can you lose a friend you never had?) Briefly: The three bills that have been discussed by the governor for a special session are: - A plan to reduce state spending on a program that benefits
"property-poor" schools, saving about $60 million, while allowing
school districts to collect more money from property tax levies. That
bill is seen as the biggest priority.
- A measure to clear the way for illegal immigrants in state prisons to be deported, saving the state more than $8 million.
- A criminal sentencing bill that expands the low and high end of the
sentencing range, allowing more discretion for judges when sentencing
offenders. This bill could save the state nearly $376,000 through 2011
because it is expected that sentences will be reduced.
But, she notes, ... House leaders have been lukewarm about rushing back to Olympia.
House Majority Leader is quoted as thinking September might be better, when legislators have to return to Olympia anyway. Republicans, who seem to have little influence on the governor's decision, have been clear from the beginning that there's no hurry. That's particularly true for Sen. Joe Zarelli, who headlines his latest Budget Tid Bit " no special session to pass bad public policy." He's particularly opposed to the levy equalization measure. He desxribes
Disagreement on the bill tied up lawmakers in the waning hours of the session.
In addition to the aforementioned issues, swine flu could emerge as a special session topic, at least a reason to bump public health funding. It's always a bad idea to make predictions just before decisions are likely to be announced. But here goes: I doubt they'll be back soon.
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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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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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Tuesday, February 24, 2009
Can't Count Coal Out
Posted by Richard Davis on 2/24/2009 4:56:00 PM
Don Brunell's column this week offers up another of what used to be called inconvenient truths, until Al Gore made it such a tired cliche we don't say it anymore. Brunell points out that coal will long be an essential element in our nation's energy supply. ..coal provides more than half of our nationƒ?s electricity and will for at least the next 20 years. There wonƒ?t be enough alternative energy for decades ƒ? if ever ƒ? to replace it.
Still, as he points out proposed legislation threatens only coal-fired power plant. Here's how Sen. Craig Pridemore explains his position on YouTube.
Read Don's post. He's right. The senator is wrong.
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Friday, February 13, 2009
Senate Votes to Tap Unemployment Insurance Trust Fund
Posted by Richard Davis on 2/13/2009 1:20:00 PM
Yesterday the Senate voted to tap the state's UI trust fund to increase benefits (43-4) and provide highly conditional B&O tax relief to qualifying businesses (46-0). The Seattle Times' Andrew Garber reports on the votes. And, yes, they called it stimulus. TVW's Capital Record blog also has good links here. WashACE has a different set of UI priorities. We've argued previously that the legislature must act this session to adopt unambiguous language reinstating the ƒ?voluntary quitsƒ criteria and to achieve federal compliance without increasing UI taxes. We continue to urge the legislature to focus on these essential issues and not increase the risk of future UI tax hikes by dipping into the fund now. For background see this and this.
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Monday, February 02, 2009
Competitiveness Lessons from Other States
Posted by Richard Davis on 2/2/2009 3:25:00 PM
Today's Wall Street Journal carried a front-page story about what states are doing to build their economies during the recession. Under the headline, More States Considering Tax Breaks to Woo Jobs, Stephanie Simon reports the intense jockeying for position as state governments compete for new investment and to retain the employers they have. Rising unemployment has touched off a race among state governors to woo companies with tax breaks and financial incentives, even as budget shortfalls force cuts in education, health care and other services.
She notes that most states are counting on federal stimulus money, but
they're not convinced it will be enough. So they've laid out urgent calls to chase private-sector jobs with public money.
Why? This is what Missouri's Democratic Gov. Jay Nixon says:
"Everything stems from jobs," Mr. Nixon said. "Now is not the time to back off the field of economic development."
It's a good, balanced account of the current competitive landscape. And, it's a reminder that when we say "location is a choice" 49 other states are working to make themselves the right choice by reducing costs and uncertainty for employers. One of the problems with plans to increase unemployment insurance benefits and temporarily cut the tax is that it increases uncertainty by raising the specter of higher costs in the future. With the economy still deteriorating, employers rightly fear reducing the trust fund when demand for benefits continues to rise.
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Saturday, January 24, 2009
Asking the Right Question about the State Budget and Stimulus Plans
Posted by Richard Davis on 1/24/2009 1:52:00 PM
At TVW's new and useful public affairs blog, Niki Sullivan aptly frames the budget debate: Is it a recession? Or is the economy "resetting?" Microsoft, {CEO Steve Ballmer] said, is making cuts because they donƒ?t see the economic downturn as a recession, they think the economy is resetting to a lower level of consumer spending. Itƒ?s not just semantics: The difference is at the heart of the public budget-related disagreements between Republicans and Democrats here. Go to the blog and listen to the distinctly different takes on the budget offered by Sen. Joe Zarelli and Rep. Kelli Linville. Zarelli points out that the state and embarked on an unsustainable budget path well before the recession. Linville contends that the deficit stems primarily from the economic downturn and defends spending decisions made in recent years as restoring cuts made during the previous downturn. If you believe that the recession is just a cyclical dip, you might be inclined to use stimulus funds to maintain spending until the eventual recovery. If you buy the "resetting" argument, then you'll want to use this time to rightsize spending to a lower and sustainable level. This opinion piece in Friday's Wall Street Journal by Peter Schiff makes a strong case for those who believe we're seeing a fundamental, long-term resetting. The root problem is not that America may have difficulty borrowing enough from abroad to maintain our GDP, but that our economy was too large in the first place. America's GDP is composed of more than 70% consumer spending. For many years, much of that spending has been a function of voracious consumer borrowing through home equity extractions (averaging more than $850 billion annually in 2005 and 2006, according to the Federal Reserve) and rapid expansion of credit card and other consumer debt. Now that credit is scarce, it is inevitable that GDP will fall.
Welcome to the new normal. Even during the upcycle, state government was spending more than it collected in tax revenues. The recession sharply accelerated the inevitable budget collapse. Pulling back now won't be easy, but it's necessary. And we're beginning to see small steps in the right direction. Getting an earlier fix on revenues also seems like a good idea. Another encouraging move to increase budget sustainability is Zarelli's proposed constitutional amendment to increase deposits in the state rainy day fund. After surveying the global economic picture and the "debt bubble," Schiff concludes: Taking on more debt to maintain spending is neither sacrificial nor beneficial.
What's true of debt is also true of the use of one-time stimulus dollars to prop up a spending plan that cannot be sustained under normal economic conditions. Entrepreneur.com offers good advice to business owners, advice that applies equally to state budget writers. (h/t eff Cornwall at The Entrepreneurial Mind) The economy tanks. You have two options: hole up in a bunker and hope it ends before you run out of tinned peas, or innovate and emerge stronger than when the economy took the hit.
There can be no return to spending-as-usual. But we can use this time to build a better, sustainable budget that protects essential services while increasing economic opportunity.
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Friday, January 16, 2009
Stimulus vies with Sustainability in Deficit-plagued Opening Week
Posted by Richard Davis on 1/16/2009 9:43:00 AM
It's a theme-setting time, the first week of a legislative session. Beyond the pomp and circumstance, lawmakers work to make sure we understand that they understand the direness of the times. Gov. Gregoire delivered her second inaugural address, acknowledging the severity of the state's economic and fiscal problems and telling us what she intends to do about it. She echoes WashACE priorities with this: ...like our struggling families and businesses, we can and will tighten our belts, balance our budget and focus on basic needs ƒ? protection of our children, our schools and colleges, our public safety, our environment and our economy.
And this: When this recession ends, and it will end, we must be ready for a new economy. We need to preserve our education system to make sure we provide workers skilled in science, math, engineering and technology.
She also emphasized government reform, streamlining and rightsizing, promoting more effective use of technology and improving the state's competitiveness. And there were proposals that garnered legitimate criticism from business group, particularly her plan to dip into the state Unemployment Insurance Trust Fund to increase benefits and pay for tax relief. AWB president Don Brunell notes the major problem with that plan (stories here and here), ...Brunell warned it may set a dangerous precedent that could lead increased unemployment taxes in the long run. ... Brunell said his analysis showed that businesses could receive a tax break of about $40 each from the plan, an amount he called "pretty insignificant." Senate Democrats also unveiled their version of stimulus, also tapping UI funds. It's early and a lot of what we're seeing will evolve and, we hope, improve. There's still too much apparent confusion between relief and stimulus. At a time when we're seeing jobs disappear too rapidly, stimulating a new, gauzy green economy should take a back seat to retaining those good jobs that remain. (For a glimpse at the jobs picture, check out this frightening layoff ledger from the Seattle Times.)
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Tuesday, December 30, 2008
Light Blogging Ahead
Posted by Richard Davis on 12/30/2008 4:19:00 PM
I'm going to take a little break. Be back Monday. Happy New Year.
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Thursday, October 30, 2008
Not a Lot of Competition in Legislative Races Across the Country
Posted by Richard Davis on 10/30/2008 1:22:00 PM
Washington voters, with their avowed distaste for partisan politics, adopted the "top two" primary scheme to weaken party control over the nomination process. It resulted in a handful of races this year pitting two members of one party against each other. I'll not weigh in on that here. But I found this report from the Council of State Governments interesting. Despite more than 5,800 legislative seats appearing on statewide ballots, only 39 percent of those races will feature both a Democratic and Republican contender. The remaining 61 percent are races that are either uncontested or have only one major party candidate squaring off against one or more third party candidates.
Does that seem like a good thing to you?
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Tuesday, October 21, 2008
Mixed Signals in Unemployment Report
Posted by Richard Davis on 10/21/2008 3:50:00 PM
Today's announcement that the state unemployment rate has dropped from 6 percent to 5.8 percent looks like good news, but there's a dark cloud over the silver lining. A closer read of the report indicates that our economy continues to slump. Although the rate dropped, the state lost jobs. A large reduction in government jobs contributed to a seasonally adjusted loss of 18,200 nonfarm jobs in Washington in September 2008, down to 2,968,000. The decline comes after a revised gain of 13,900 jobs in July and 1,400 jobs in August.
So how does the unemployment rate decline even as jobs are disappearing. There are several explanations: people may be leaving the workforce faster than the labor market is shedding jobs; and, the data sources are different. The job numbers are based on a survey of some 7,000 employers, while the unemployment rate is based on a smaller survey of households. Mary Ayala, chief economist for the Washington State Employment Security Department, said the surveys last month presented somewhat differing results, probably due to error rates that are inherent in telephone surveys.
The employer survey is undoubtedly more reliable. The Employment Services Department, which released the data, expects revisions. ... given the recent financial crisis that jolted every sector of the national economy, a revision to the September 5.8 percent is likely to occur. Therefore, the longer term estimates of Washingtonƒ?s unemployment levels are more informative at this time. Washingtonƒ?s employment level increased by 1.0 percent year-over-year, while the U.S. realized a loss of 0.7 percent. Similarly, Washingtonƒ?s unemployment rate continues to lag behind the U.S. rate of 6.1 percent, suggesting that Washingtonƒ?s economy is in relatively better shape at the moment than the rest of the nation.
Here are some highlights (lowlights?) on the job market. Key sectors continue to shed employment. -
Employment in the goods-producing sector shed another 3,600 (-0.71 percent) jobs in September, after losing 2,800 jobs in August. Among industries that fared better than others, aerospace industries added 200 jobs (+0.23 percent), after remaining unchanged in August, and other food manufacturing gained 200 jobs (+0.81 percent).
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The construction sector shed another 2,200 jobs (-1.1 percent) in September, following a series of consecutive monthly job losses that began in January 2008. The cuts primarily affected commercial construction; employment in residential construction exhibited no change from the prior month.
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Employment in the manufacturing sector declined by 1,400 jobs (-4.7 percent) in September, with most of the losses (-1,000) concentrated in the manufacture of durable goods.
Despite the drop in the unemployment rate, it's much too early to mark a turnaround.
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Monday, October 06, 2008
Initial claims for unemployment insurance are up in Washington
Posted by Kriss Sjoblom on 10/6/2008 10:57:00 AM
Initial claims for unemployment insurance rose by 954 in the week ended September 27, from 10,435 to 11,389. This is nearly twice the 5,904 claims in the corresponding week of 2007. Last week initial claims jumped by 2,359. Table here. The less volatile 4-week moving average of initial claims rose from 8,502 to 9,393. Scary chart here. While it is possible that the recent jump in claims is due to the Boeing strike, I fear that the jump signals the beginning of recession for the Washington economy.
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Wednesday, September 24, 2008
Light Blogging Ahead
Posted by Richard Davis on 9/24/2008 10:21:00 AM
I'm heading north to the AWB Policy Summit and will have limited opportunities for blogging for the balance of the week. Watch TVW for the candidate debates Thursday. Should be a lively time.
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Wednesday, September 24, 2008
Check out the Candidate Questionnaire Link
Posted by Richard Davis on 9/24/2008 10:19:00 AM
If you've not visited our candidate questionnaire page, this would be a good time. We've recently added dozens of new completed questionnaires. Good information.
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Monday, August 11, 2008
AWB Files Legal Brief in Brown v. Owen Lawsuit
Posted by Kris Tefft on 8/11/2008 4:24:00 PM
This afternoon, AWB filed an amicus curiae ("friend of the court") brief in Brown v. Owen, the lawsuit by Senator Majority Leader Lisa Brown challenging the constitutionality of the provision of Initiative 601 that requires a supermajority vote of both houses of the Legislature to raise taxes. From the brief's intro: AWB makes this short amicus submission to add an additional dimension to respondentƒ?s separation of powers argument, contending that the petition raises essentially a political question that the court, as a matter of prudence and restraint, should decline to reach. Should the court reach the merits and grant the writ, it would in essence absolve a coordinate and co-equal branch of government from the difficult political and policy choices it must confront under RCW 43.135.035(1) by invalidating the statute under the same constitutional principle ƒ? majority rule ƒ? that the Legislature may itself use at any time (and has used in the past) to avoid the statuteƒ?s procedural requirements. The court should refrain from granting a single member of a single political caucus of a single chamber of the Legislature the extraordinary relief of striking down an enhanced procedural requirement the full Legislature has chosen for itself when the full Legislature could, by its own authority and through its own processes, loose the binds of that requirement at any time.
The rest can be read here. The Supreme Court takes up the case on September 9th.
(Cross-posted at Olympia Business Watch)
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Thursday, August 07, 2008
AWB Launches Campaign Videos
Posted by Richard Davis on 8/7/2008 5:22:00 PM
Beginning with the gubernatorial race. See the first one here.
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Tuesday, August 05, 2008
Washington Supreme Court: Good for Business?
Posted by Kris Tefft on 8/5/2008 10:25:00 AM
AWB looks at that question in its 2008 Scorecard and Guide to the Washington Supreme Court, released this week as an insert to the July-August issue of Washington Business Magazine. This latest version of the judicial scorecard looks at 26 different business climate cases across six areas -- labor and employment, land use and environmental, tax & fiscal policy, torts and insurance, workers' compensation and safety, and general business issues. AWB participated as a friend of the court in many of the cases evaluated, arguing for a pro-business outcome. The top 3 "pro-business" scores in 2008 went to Justice Jim Johnson, whose decisions we agreed with 92% of the time; Justice Richard Sanders at 76%, and Chief Justice Gerry Alexander at 58%. Down at the bottom end were Justice Tom Chambers, at 40%, and Justices Mary Fairhurst and Susan Owens at 38% and 35% respectively.
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Friday, July 18, 2008
Initiative 1029: To the Ballot, the Legislature, or the Court?
Posted by Richard Davis on 7/18/2008 9:49:00 AM
The Secretary of State's decision to accept Initiative 1029 for the fall ballot comes under more scrutiny by the editorial boards. Although the petitions clearly state that the measure is an initiative to the legislature, SEIU - the union backing the initiative - says 1029 was intended to be an initiative to the people. And the Secretary of State says he'll overlook that mistake and let it go to the ballot. I wrote about it in a column that ran Wednesday in The News Tribune and Herald of Everett. At first, I'd not considered it a topic for WashACE. But now I think it worth mentioning here. So much of public policy in our state comes via the citizen initiative that the processes by which measures reach the ballot cannot be ignored. I'll not re-argue my concerns here. They're laid out in the column. Here's what some others are saying. The Seattle Times thinks the secretary made the right decision. Blogging at Olympia Business Watch, Kris Tefft neatly dissects the arguments. ... handling I-1029 will involve tolerance for irregularity. If Reed is forced by court order to submit the initiative to the Legislature, that will be contrary to its sponsor's affidavit and the measure would bear a way-off serial number (were this correctly filed as an initiative to the Legislature, it would have likely been called I-409). But it seems to me those irregularities have less gravity than assuming voters didn't know, or didn't care, about the plain language of what they were signing, a position which effectively removes them from the constitutional equation and reduces them to mere cogs in a sponsor's signature-harvesting combine.
The News Tribune gets it right. As does the Seattle P-I. More good information at the Evergreen Freedom Foundation in this post by Jonathan Bechtle. MORE See Kris Tefft's post on another SEIU initiative. This one's intentionally to the legislature. And puts pensions - and taxpayers - at risk.
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Monday, July 07, 2008
Two Ballot Initiatives May Deepen Budget Hole
Posted by Richard Davis on 7/7/2008 11:11:00 AM
Credit to Chris Mulick of the Tri-Cities Herald for bringing to light the effects Initiatives 985 and 1029 could have on the state's $2.7 billion budget hole. Both initiatives apparently gathered the required number of signatures for the fall ballot. If both should pass, the budget problems worsen, with the deficit expected to exceed $3 billion. Here's how Mulick reports it. Preliminary estimates from the Department of Revenue indicate that professional initiative promoter Tim Eymanƒ?s traffic congestion measure ƒ? Initiative 985 ƒ?would cost the state about $290 million during the next two-year budget cycle and the rest of the current one. And the campaign for Initiative 1029, a home-care worker training measure backed by the powerful Service Employees International Union, believes its measure would cost at least $23 million during that time. That numberƒ?s based on a nonpartisan analysis of similar measures before the Legislature this year.
Tim Eyman was quick out of the blocks this morning with an email arguing that I-985 would be good for the state's economy. Nothing slows down our economy more than traffic congestion. Nothing would boost our economy more than reducing traffic congestion. State Auditor Brian Sonntag's performance audit report on transportation confirms that implementing his recommendations will result in a $3 billion boost to our state's economy.
I-985 will boost our state's economy both by the implementation of its policies and by illustrating the public's support for making reducing traffic congestion the top transportation priority.
Stopping short of claiming that their initiative will be a boon to the economy, SEIU argues that, well, it's about more than the money. From Mulick's story: Worries about its costs donƒ?t stand up to its benefits, campaign manager Jeff Parsons said. ƒ?How can we not afford to take care of our seniors?ƒ he asked. ƒ?They need to have the best care we as citizens of the state of Washington can afford to give them.ƒ
It's early days yet. And more analyses of the initiatives will be available before the election. It is safe to say, however, that it is about the money. (Cross-posted at Olympia Business Watch)
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