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Sunshine Committee recommends sunset review for new records exemptions

October 13, 2009 in Blog

The state Sunshine Committee this morning unanimously adopted a recommendation that any new exemptions from public disclosure undergo a sunset review. Here is the recommendation as adopted by the Committee:

The Committee makes the following recommendations for new legislation:
1. The Legislature incorporate all existing and further exemptions into the Public Records Act by express reference.

2. The Legislature limit all future exemptions to a term of five years and be that such exemptions be examined by JLARC (Joint Legislative Audit Review Committee), the Sunshine Committee, or other competent body, a year prior to their expiration on a case by case basis to determine if they merit reauthorization or should be eliminated or revised.

The recommend!
ation adopted was an amended version of this proposal first introduced on May 12:

Be it Resolved that it is the sense of this committee that all
exemptions to the Public Records Act and any statutory basis to
withhold information or records be eliminated after two years unless
specifically reauthorized by the Legislature with the exception of
those ten included in the original legislation; and that the
Legislature examine all of the eliminated exemptions individually, and
Further, that all future exemptions be limited to a term of two years
and be examined by the Legislature upon their expiration on a case by
case basis to determine if they merit reauthorization or should be
eliminated or revised.

The Committee also discussed the other recommendations from its draft report to the Legislature. Those recommendations concern:

Here is the full agenda for today's Sunshine Committee meeting.

Treasurer worries about state's credit rating

October 8, 2009 in Blog

Earlier this year State Treasurer James McIntire highlighted the state's strong credit ratings. Now, however, he is worried the state may have to pay millions more to borrow money. According to the Seattle PI:

Tim Eyman's initiative that would limit government spending could hurt Washington's credit rating, which would cost the state tens of millions of dollars, state Treasurer James McIntire says . . . McIntire said credit ratings consider numerous factors, including initiatives like Eyman's.

"They want to know how your economy is doing, they want to how your revenues are doing, they want to know what your balance sheet looks like...and they ask about things like initiatives," he said in an interview. "Any!
thing that restricts taxes or spending, that's going to have a long-term structural impact to come to resolution about financial management, is something that they worry about."

Credit raters like Moody's say "Voter initiative activity adds element of fiscal uncertainty,” and is a challenge for the state, but the adoption of a tax or spending restriction did not make Moody's list of things that would reduce the state's credit rating. According to Moody's July 10 report on Washington's credit outlook:

What would change the rating - UP
  • Sustained trend of structural budget balance, plus restoration and maintenance of strong reserve levels.
  • Economic expansion and improved industry diversification.
  • Reduction of debt ratios to levels closer to Moody's 50-state medians.

What could change the rating - DOWN

  • Deeper and longer recession that restrains consumer confidence, leading to prolonged revenue weakness and employment erosion.
  • Protracted structural budget imbalance.
  • Increased reliance on one-time budget solutions.
  • Cash flow narrowing, leading to strained liquidity.
  • Failure to adopt plan to cover expenditures once federal fiscal stimulus monies are no longer available.

Perhaps the reason adoption of a tax or spending restriction didn't make the list is the fact Washington already has both. In fact, the state's credit rating didn't drop after passage of I-601 (tax and spending restriction) in 1993 or I-960 (tax restriction) in 2007.

Based on the criteria described by Moody's, it looks like the biggest devil for the state’s credit rating will be whether or not the state lays out a plan for balancing the budget once the federal bailout funds are gone and stops resorting to one-time fixes. 

Additional Information
Summary of state's credit history (provided by Office of State Treasurer)

State Auditor & Attorney General: We need a better way to enforce open government laws

October 5, 2009 in Blog

The Open Government Task Force created by State Auditor Brian Sonntag and Attorney General Rob McKenna met this morning to discuss alternative ways to enforce the state's open government laws. Currently the only option available to citizens is to file a lawsuit if they disagree with an agency's opinion on whether a record should be disclosed.

Opening the meeting State Auditor Brian Sonntag noted there has to be a better way for citizens to access government records without having to resort to lawsuits. Attorney General Rob McKenna agreed highlighting the fact that every other area of law has an administrative mechanism for addressing concerns. The reason is administrative mechanisms are faster and more cost effective than relying solely on court relief. Unfortunately, Washington lacks this type of recourse!
for enforcement of the state’s open government laws.

The Task Force's heavy hitters (including House Majority Leader Lynn Kessler, Rep. Chris Hurst, Rep. Joel Kretz, and Sen. Bob Morton) heard a presentation from Terry Mutchler, Executive Director of Pennsylvania's Office of Open Records. Mutchler described how Pennsylvania's administrative process works for citizens and agencies to resolve public records dispute.

The administrative review processes in other states was also discussed at the meeting. Working with the Attorney General's Office I reviewed the public records laws in the states with administrative options for citizens and created this handout for the Task Force.

!
Here is a sampling of how enforcement of open government laws !
works in those states:

  • Kentucky - Attorney General review of records dispute and subsequent opinion has the full force and effect of law.
  • Nebraska - If an agency ignores the opinion of the Attorney General that a record should be disclosed, the Attorney General must sue the agency on behalf of the citizen if requested.
  • New Jersey - Government Records Council offers mediation services to resolve records disputes.
  • North Dakota - If an agency ignores the opinion of the Attorney General that a record should be disclosed, the agency or public official is personally liable.

Next up for the Open Government Task Force is working on a draft report laying out its recommendations for the Legislature to consider next session.

Governor wants agencies to focus on core missions

October 2, 2009 in Blog

The House State Government committee held a work session today focused on how to improve agency efficiency. Rep. Sam Hunt, Chair of the committee, opened the meeting by asking, "What do we do to make government more efficient?"

One of the solutions provided by the Governor's Office is for agencies to spend more time on their core missions versus "back office" activities. Here is the info from one of the Governor's handouts:

Governor Gregoire wants state government to meet the demands of the 21st century economy. One key to success is for state agencies to focus on their core missions.
  • Reduce the size of government
  • Provide 21st century customer service
  • Streamline agencies and operations to get best value for cost

The goal is to better serve the public with a more nimble and efficient government. The public will continue to receive service from the experts in the field, and departments will receive the same: business services from the agency expert in the field. It’s the old example: why should the head of DSHS have to be a real estate guru as well as a social services expert?

We will align our systems to achieve economies of scale and improve efficiency across the spectrum of government.

This is a matter of aligning programs and positions, not judging the people in them. The driving force behind this is maximizing limited resources. The work people in central service fields do is valuable and needed. State agencies must have email to function. The question is whether an agency should be running its own email system when taxpayers are also funding a Department of Information Services.

We know it will be hard. Change when resources are scarce is diffi!
cult. We know savings may not be instant, and the steps have to be incremental. But difficulty is not an excuse for the status quo. Constant improvement is a hallmark of successful organizations.

We are committed to it. The governor has made this a priority, and so has the cabinet. We’re accepting the challenge and expect to meet it.

Also discussed was the joint effort between the State Auditor and the Governor to review ways to improve agency efficiency.

Here are additional details on the State Auditor's effort and the Governor!
9;s reform goals

DOR: Three Million State Residents May Have Unclaimed Property

October 2, 2009 in Blog

In need of extra cash? The state is holding $700 million in unclaimed property - some of which may be yours. According to the Department of Revenue:

Three million current or former Washington residents have a stake in $700 million in unclaimed property being held by the Washington State Department of Revenue. You may be one of them.

Their names are listed in the Department’s searchable online database, http://claimyourcash.org, as having unclaimed property turned over to the state by businesses, generally after they have had no contact with the holder for three years.

Unclaimed property includes items such as uncashed paychecks, rent and utility deposits, refunds, escrow funds, dormant bank accounts, stocks and bonds and even the contents of safe deposit boxes.

The Department mails claim forms to the last-known addresses of potential claimants after they receive the property, but oft!
en the individuals have moved and no forwarding address is available.

During Fiscal Year 2009, the Department returned $45 million to 88,000 claimants, yet the number of people with potential claims continues to grow.

Revenue Director Cindi Holmstrom said the odds of someone finding unclaimed property have grown steadily over the years, are now literally 50-50, as the Department continues its efforts to educate businesses on the legal requirements to turn over unclaimed property.

“We’ve made it as easy and simple as possible for people to search for and claim their property,” Holmstrom said. “Our goal is to return as much of this property as possible to the rightful owners.”

Click here to see if the state is holding your unclaimed property.

Open Government Task Force Meeting October 5

October 2, 2009 in Blog

The Open Government Task Force created by State Auditor Brian Sonntag and Attorney General Rob McKenna will hold the first of two meetings on October 5. According to the Task Force's website:

The purpose of the Open Government Task Force is to study and make recommendations on the creation of an administrative board to rule on complaints of violations regarding the Public Records Act (PRA) and the Open Public Meetings Act (OPMA).

The Attorney General's Office and the Auditor's Office created this Task Force to address growing concerns among governments and the public. State agencies and local governments face a logjam of citizen complaints, costly litigation over the PRA and the OPMA, and uncertainty regarding potential liability that may require payment of attorneys’ fees, costs, and daily penalties. Citizens w!
ho are denied access to public records and public meetings have no choice other than to go to court, and lawsuits may take years to resolve and are costly. Going to court to enforce legal rights to access public records and public meetings is simply not an option for many citizens.

An efficient and inexpensive solution is needed to resolve complaints and provide greater access to public records and public meetings while reducing costs to governmental agencies and the public. Many states provide an independent administrative review process to resolve complaints without litigation. These states use administrative boards to offer services including mediation, dispute resolution, non-binding legal interpretations, investigation of potential violations, issuing final appealable rulings, offerings of legislative reform, and training public officials about their responsibilities under the law.

Here is the agenda and handouts for Monday's meeting. The meeting is open to the public and will be held from 9 am to 1 pm in the Senate Rules Room.

Ways & Means budget handouts

October 1, 2009 in Blog

The House and Senate Ways and Means committees met today to discuss the state budget. Among the many interesting presentations was the Senate update on the state budget outlook and the House comparison of state budget processes. Below are some of the details of note.

Senate Ways & Means: Operating Budget Update

  • Based on current forecasts and information, there has been a $1.8 billion negative change in the anticipated fiscal situation. As a result, anticipated reserves have gone negative.
  • Based on the current revenue forecast, annual revenue is expected to be at 2006 levels for both FY 2009 and FY 2010.

Senate Ways & Means: Washington State Economic & Revenue Outlook

  • It is almost certain that the recession in both the national and state economies is now over.
  • The recovery is still fragile, and risks remain.
  • State revenues will lag the economic recovery.
  • The recovery in revenues will be slow and is subject to risk.
  • Collections in FY 11 are expected to be USD 300 million less than in FY 08.
  • Revenues in the 2009-11 biennium are expected to be 1% below their 2007-09 level

House Ways & Means: Overview of State Approaches to the Operating Budget Process

  • Minimum time the legislature must review a budget before a vote - About 13 states have some sort of minimum review period for budget bills (that is different than policy bills). Most requirements focus on the budget bill being available for a certain amount of time before floor debate or final passage. (For instance, Florida is 72 hours, Georgia is 24 hours in the House, Hawaii is 48 hours, Michigan is 5 days in the House, New Hampshire is 2 days in the House and 24 hours in the Senate, Rhode Island is 10 days in the House, South Carolina is 3 days in the House, and Texas is 48 hours in the Senate. Utah requires appropriation bills be provided to legislators by the 43rd day of session.)
  • Original budget submittal must be balanced - Nearly all states require the original budget proposal to be balanced. In Washington, the Governor is statutorily required to submit a balanced budget proposal.
  • Legislature must pass a balanced budget - At least three-quarters of the states require that the legislature enact a balance budget. Washington is not one of these; however, if the Governor determines that a deficit will occur because enacted appropriations will exceed projected revenues and the beginning fund balance, the Governor is required to order across the board reductions to bring the budget in balance.
  •  A deficit cannot cross fiscal years or biennia - Three-quarters of states, including Washington, prohibit deficits from carrying over into future budget periods.

Colorado economics professor defends I-1033

September 30, 2009 in Blog

With the Initiative 1033 debate focusing on the impact of a similar law in Colorado, the Taxpayer Bill of Rights (TABOR), one of TABOR's biggest supporters is coming to the defense of I-1033. Dr. Barry Poulson, Professor of Economics at the University of Colorado at Boulder, wrote an article for the Bellingham Herald this week countering the attacks opponents of I-1033 have made against TABOR.

According to Dr. Poulson:

Opponents of Washington's Initiative 1033 are woefully uninformed about the Colorado's Taxpayer's Bill of Rights (TABOR) passed by voters in 1992. Critics of Washington's ballot measure say I-1033 !
is similar to our TABOR, which they claim is a disaster for our state. Nothing could be further from the truth . . .

The TABOR Amendment has worked much the way it was intended, allowing Colorado citizens to decide how much government they want and are willing to pay for. If any jurisdiction wants to spend surplus revenue, or increase taxes or debt, it must have voter approval.

Many statewide ballot measures have been presented to Colorado voters since TABOR was enacted. Two of the six ballot measures seeking approval to spend surplus revenue were passed, and four were defeated. Eight ballot measures proposing tax increases were introduced, but only one of these measures passed. Of the four property tax measures introduced, two providing property tax relief to specific groups passed; two measures proposing property tax increases were defeated.

At the local level, however, many more spending or tax increases have been approved, usually becau!
se they were tied to specific local government programs to whi!
ch the voters decided to give extra funds.

Critics often argue that TABOR forced the state to cut spending. The empirical record for state spending in Colorado refutes this claim. In contrast to California, state spending in Colorado has grown at roughly the rate in the private economy. From 1993 to 2007 real per capita state spending grew 28 percent, while per capita GDP grew 30 percent.

With an effective tax and spending limit in place Colorado has been able to lower tax burdens, creating one of the best business tax climates in the country. Colorado has attracted more business investment and jobs than most other states. Over the period since TABOR was passed Colorado has experienced one of the highest rates of economic growth in the nation, while California has experienced retardation in economic growth . . .

Polls reveal that Colorado citizens support the TABOR Amendment by a greater majority today than when it was enacted. Citizens supp!
ort each of the TABOR provisions by a large majority: the cap on the growth of revenue and spending; the requirement for voter approval to spend surplus revenue; and the requirement for voter approval to increase taxes and debt.

Despite this success, politicians and special interest groups routinely attack TABOR because it doesn't give them carte blanche authority to tax and spend. Washington residents would be lucky to have our TABOR amendment. It strengthens fiscal rules and policies conducive to economic growth and prosperity, and prevents the kind of fiscal debacle occurring in California.

Speaking of polls, Tim Eyman (sponsor of I-1033) highlighted yesterday a recent poll indicating 61% support for I-1033.

Adding a new wrinkle to the tax and spending debate I-1033 is presenting voters is the announcement by Governor!
Gregoire that she is willing to consider tax increases next year. As r!
eported by The Olympian:

Gov. Chris Gregoire made clear in a meeting with reporters this morning that she is not as hostile to tax hikes as she was a year ago. And she will entertain proposals if lawmakers or interest groups bring them to her.

"I didn't want revenue last year because I couldn't figure out how you could do a revenue package that wouldn't hurt the economy, either individuals or businesses. We're still stuck in that rut but I've told the leadership, 'Come make your case. My door's open, you can make your case.' But I don't want to do anything that adversely impacts our economic recovery," Gregoire said.

It's a clear shift from last December when she discouraged tax proposals. At that time, she said it was the wrong time to put a burden on busi!
nesses and individuals in a recession. But Gregoire said last year's cuts were painful and she doesn't know how another $1 billion can be trimmed.

It is unclear if the Governor would support a suspension of I-960's requirement for tax increases to receive a 2/3 vote of the Legislature to take effect. I-960 can be suspended with a simple majority vote next session.

For additional information on I-1033, check out this debate on KING 5 News Up Front and WPC's review of the measure.

Massachusetts' "emergency preamble" may hold up Kennedy replacement

September 23, 2009 in Blog

It looks like Massachusetts' version of our "emergency clause" may delay the appointment of Sen. Kennedy's replacement. Unlike in Washington, however, the Massachusetts "emergency preamble" requires a 2/3 vote of lawmakers to allow a bill to take effect immediately, rather than the standard 90 days.

According to Fox News:

Paul G. Kirk Jr., the former chairman of the Democratic National Committee, will replace the late Ted Kennedy in the Senate until a special election is held in January, sources told FOX News.

But a constitutional dispute is delaying final passage of a bill allowing Gov. Deval Patrick to name Kennedy's successor . . . Massachusetts lawmakers are expected Wednesday to give final approval to a change in the Senate succ!
ession law so the governor can temporarily fill Senate vacancies. The interim senator would serve until the seat is filled permanently through a special election on Jan. 19.

Patrick could announce his pick as early as Thursday.

But under the Massachusetts Constitution, laws enacted by the Legislature and signed by the governor become law after 90 days.

For laws to take effect immediately, lawmakers must attach a so-called "emergency preamble," which requires a two-thirds vote in each chamber.

Republicans, who oppose the bill, say they'll fight any attempt to have the law take effect without an emergency preamble. The bill won initial approval in both chambers, but fell far short of a two-thirds majority.

As explained by a Massachusetts government website:

A bill signed by the govern!
or, or passed by two-thirds of both branches over his veto, be!
comes a law. It is usually effective in ninety days. The day after the governor signs the bill is considered to be the first day, and each succeeding day, including Sundays and holidays is counted until the ninetieth.

Laws considered "emergency" in nature take effect immediately upon signing if the legislature has voted to attach an "emergency preamble" to the bill. Adoption of the preamble requires a two-thirds standing vote of the membership.

Lawmakers in Washington can also declare an emergency and allow a bill to take effect immediately but a 2/3 vote is not required. When an "emergency clause" is used the people are denied their right of referendum on that bill. To provide a check on the Legislature, the state constitution grants the people the power to veto unwanted legislation through the use of a referendum.  According to the Secretary of State, “The referendum allows citizens, through the petition proc!
ess, to refer acts of the Legislature to the ballot before they become law.” This power applies to any bill adopted by the Legislature except those that include an “emergency clause.”

An emergency clause states that a bill is exempt from repeal by referendum because the bill is, “necessary for the immediate preservation of the public peace, health or safety, support of the state government and its existing public institutions.” The use of the emergency clause allows bills to take effect immediately once signed by the Governor.

The purpose of the emergency clause is to allow state government to respond quickly to true public emergencies, like a large-scale natural disaster or wide-spread epidemic disease.

Yet over the years lawmakers have routinely abused the exemption by attaching emergency clauses to 813 bills since 1997, including 68 b!
ills during the 2009 legislative session.

As is the case in M!
assachusetts, the most effective way to end the Legislature’s abuse of the emergency clause is a constitutional amendment creating a supermajority vote requirement for its use.  The Legislature would then be prohibited from attaching an emergency clause unless the bill was approved by a 60 percent vote.  Budget bills, however, could be made exempt from the supermajority vote requirement, allowing them to pass with a simple majority and not be subject to referendum.

A constitutional amendment (HJR 4205) was introduced last session by Rep. Barbara Bailey, but it did not receive a hearing.

Federal transparency bill moves step closer to floor vote

September 23, 2009 in Blog

Earlier this year Washington Congressman Brian Baird (D) introduced a
resolution calling for a 72-hour review period on
legislation before a vote could be taken. Baird's House Resolution 554 is co-sponsored by Rep. John
Culberson of Texas (R). Since House leadership has not scheduled the bill for a vote, Baird has joined with other Representatives to try to force floor action on the transparency proposal. According to The Hill:

"Democratic Rep. Brian Baird (Wash) has signed on to a discharge petition intended to force a floor vote on transparency legislation backed by Republicans.

If the petition wins 218 signatures, it would pave the way for a vote on legislation that would change House rules to require that bills are posted online for 72 hours before the House votes on them.

It is rare for a lawmaker to sign on to a discharge petition intended to force the leaders of his party to hold a floor vote. It is also considered to be a slap in the face of leaders.

Rep. Greg Wal!
den (R-Ore.) on Wednesday announced that Baird had signed on to the petition in comments on the House floor.

Baird was a cosponsor of the transparency legislation with Rep. John Culberson (R-Texas). The two introduced their bill in June, arguing it was intended to ensure that members have enough time to read through complicated bills before they vote.

The bill has 98 cosponsors, including many Democrats."

This type of transparency reform is one of WPC priorities for Washington state. From our Policy Guide:

To
facilitate public involvement, the legislature should adopt a 72-hour
timeout period in the legislative process once a budget, tax or
spending bill is introduced or amended. This would allow lawmakers and
the public a three-day period to calmly consider the two-year budget,
new taxes or new spending before legislative hearings or final voting
occurs.

A bill was introduced in Olympia this past session by Rep. Alexander (HB 1654) to create a five day review period for appropriation bills. Although a work session was held, no public hearing or vote occurred.

In other federal transparency news, the Senate Finance Committee rejected an amendment to post legislative language and cost estimates for the health care reform bill on line for 72-hours before the committee votes on the bill. As reported by Politico:

"The Finance Committee voted against an am!
endment that would have required legislative language and a cost estimate be posted on the Internet three-day before the committee votes on the bill. The change, offered by Republican Sen. Jim Bunning, failed 11-12, with Democratic Sen. Blanche Lincoln crossing party lines and voting with Republicans.

The committee did pass a Baucus amendment that requires a cost estimate and a plain-English explanation of the bill to be posted online before voting. The amendment passed on a party line vote.

The committee spent more than two hours debating the issue, not a good sign for those who want to make it home for dinner. There are dozens more amendments still to be debated."

DOR releases annual property tax report

September 21, 2009 in Blog

The Department of Revenue (DOR) today released its annual property tax report. DOR's "Property Tax Statistics 2009" provides details on property tax collections, assessments, legislation, history of significant changes and tax levies. According to DOR's press release:

Property tax revenue increased 5.4 percent to $8.6 billion in 2009, with nearly 70 percent of the increase stemming from new construction added to the tax rolls and higher voter-approved levies, the Washington State Department of Revenue reported today. 

About 1.6 percent -- $128 million of the $439 million in additional taxes over 2008 -- was due to regular tax increases on existing properties. The rest resulted from taxes on new construction and vote!
r-approved tax increases for schools and other taxing districts.

Revenues for schools, through local school levies and the state school levy, increased 5.7 percent to $4.7 billion, while county levies increased 3.6 percent to $1.4 billion, city levies rose 6.3 percent to $1.2 billion and junior taxing districts went up 5.3 percent to $1.4 billion.

Local voter-approved school levies and the state school levy accounted for 54 percent of property taxes, while counties received 16.6 percent and cities got 13.4 percent. Junior taxing districts, such as fire districts, hospitals, emergency medical services, ports and libraries, shared the remaining 15.9 percent.

The percentage share of taxes going to junior taxing districts has increased 51 percent over the past five years, from $915 million to $1.4 billion, due mainly to vot!
er-approval of higher taxes for fire districts, and the creati!
on of new taxing districts such as the King County ferry and flood districts.

Governor calls for spending cuts in response to revenue forecast

September 17, 2009 in Blog

Washington's budget outlook worsened by an additional $238 million today according to the state's Economic and Revenue Forecast Council.

According to the state's top economist, Dr. Arun Raha:

  • As stated in the economic review, the recession is almost certainly over, although risks remain
  • Commercial real estate, regional banks, and consumer spending pose the major threats to the recovery
  • Washington will recover faster than the nation thanks to the global recovery underway that will help our exports
  • The economy is very close to where we had predicted in June, and the outlook now is mildly more optimistic than both the June and September preliminary forecasts
  • Revenue collections lag the economic recovery, and are lower than the last forecast
  • Won’t feel like a recovery until at least the middle of 2010
  • We risk a double dip recession if consumer spending doesn’t improve 

In response to this news, Governor Gregoire said in a press release:

“Although we believe the recession has bottomed out, it will take some time for revenues to recover. I am preparing a supplemental budget request that accounts for the revenue shortfall we have experience since May.”

“The budget I signed in May was built on tough decisions that I made together with the Legislature. The shortfalls in the last two forecasts necessitate more spending cuts, as do the lawsuits that have restricted our ability to implement reductions.”

Victor Moore, Director of the Office of Financial Management, noted:

"Given the reductions we have seen this year, further cuts will be necessary to keep the budget in balance. We have reached a point where we have to !
consider eliminating discretionary programs in our supplemental budget.”

The focus on spending reductions versus tax increases is commendable. Earlier this year when the Legislature was considering tax increases, state and national economists warned that such action would further damage Washington’s economy and hamper economic recovery.

Review of Initiative 1033

September 17, 2009 in Blog

In November the people of Washington will vote on
Initiative 1033. The measure is sponsored by Tim Eyman and would create
a new revenue limit for the state, counties and cities with the goal of
annually reducing property taxes. Eyman calls Initiative 1033 the
“Lower Property Tax Act of 2009.” Initiative 1033 is the latest in a
series of initiatives considered by voters which seek to control the
growth of state government, though it is the first to include local
governments under its requirements, and it is the first to focus
primarily on providing ongoing tax rebates to property owners.

According to the state’s Office of Financial Management, passage of
Initiative 1033 would result in approximately $5.9 billion in state
property tax rebates and $2.8 billion in local property tax rebates
going to citizens by 2015. At the same time state and local revenue
available for spending increases would grow each year by an amount
based on population growth plus inflation. Eyman argues that Initiative
1033 attempts to close loopholes created by the legislature to an
earlier voter approved initiative, Initiative 601. Enacted by voters in
1993, Initiative 601 sought to improve on the shortcomings of
Initiative 62 adopted in 1979.

Here is WPC's brief review of the
previous state revenue and spending limits, a similar law in Colorado,
and of Initiative 1033: Citizens’ Guide to Initiative 1033

Appeals Court rules against GA contracting rules

September 15, 2009 in Blog

The state Appeals Court Division II ruled this morning to invalidate three of the Department of General Administration's (GA) rules for implementing the competitive contracting provisions of the 2002 Civil Service Reform. The ruling affirms a May 23, 2008, decision by Thurston County Superior Court Judge Chris Wickham. The Washington Federation of State Employees (WFSE) sued to have the rules thrown out.

At issue are WAC 236-51-006, 236-51-010(11) and 236-51-225. The controversy focuses on what it means to be a "displaced employee" due to an agency competitively contracting work.

The state noted in its href="http://www.washingtonpolicy.org/Centers/government/WFSEvGAbrief.pdf" target="_blank">legal brief:

Under General Administration’s rules, a fair bidding process is established allowing an agency to determine with relative ease and certainty which civil service employees would be entitled to the opportunities offered under RCW 41.06.142.  In contrast, the Federation’s approach would result in practical problems in agencies being able to identify which employees may access the opportunities set out in RCW 41.06.142(1)(b) and (c), i.e., to receive notice that the agency is  considering contracting, to offer alternatives, to form an employee business unit, to bid on the contract, and to be considered for employment if the contract is awarded to a non-employee business unit.  As discussed earlier, these are not theoretical problems.  If an agency fails to properly identify employees and ful!
fill the requirements under RCW 41.06.142 and General Administ!
ration’s rules, the agency might well have to begin the entire contract solicitation process over, resulting in a loss of money, time, and efficiency.

The Federation’s approach would also lead to absurd results if an employee business unit did win the contract.  Under the Federation’s approach, an agency could propose a contract that would cover some of the duties of one or more civil service employees but not result in the employees being laid off or reclassified.  The employees would continue to be fully employed by the agency, at the same salary, in the same job classifications.  However, the employees would be entitled to form an employee business unit and bid on the contract.  Assuming the employee business unit won the contract, when would the employee business unit members, who remain employed full time by the agency doing their normal duties, perform the contract?  On weekends?  At night?  Neither of these t!
imes may meet the agency’s need to be in communication with or have oversight over those performing the contract.  Or would such employees seek to cut back on their normal duties for the agency?  However, civil service employees have no right to unilaterally cut back on their hours . . .

The legislative history of the Personnel System Reform Act of 2002 does not show that General Administration’s rules defining displaced employee are inconsistent with RCW 41.06.142.  In its challenge below, the Federation argued that RCW 41.06.142 was intended to continue in place the statutory and judicial restrictions against contracting out that were in place prior to the 2002 act.  The Federation is incorrect in this assertion.

As discussed above, the 2002 reform act rested on three “legs”:  Granting greater collective bargaining rights to state employees; removing the general restriction against state agencies to contracting f!
or services customarily and historically performed by civil service emp!
loyees; and making various changes to the civil service system.  The Federation’s view that the 2002 reform act essentially retained the severe limitations on contracting out that were in existence prior to 2002 fails to acknowledge the political trade-offs that made passage of the 2002 act possible.  In exchange for full-scope collective bargaining, which some unions had been seeking for decades, state agencies got most of the restrictions lifted on contracting out civil service work.  The legislature did not retain the general prohibition against agencies contracting for services customarily and historically performed by civil service employees.  On the contrary, it repealed the statute (former RCW 41.06.380) that had embodied that general prohibition.

Even before today's ruling, the use of competitive contracting by state agencies under the 2002 reform has been less than stellar. A performance audit conducted by the Joint Legis!
lative Audit and Review Committee (JLARC) in January 2007 found:

“…few agencies have competitively contracted for services in the 16 months since receiving authorization to do so. Agency managers reported two main reasons for not competitively contracting. First, managers perceive the process itself to be complicated and confusing, providing a disincentive to pursue competitive contracting. Second, competitive contracting is a subject of collective bargaining, which creates additional challenges by requiring labor negotiations. Managers must bargain, at a minimum, the impacts of competitive contracting. Additionally, some agency collective bargaining agreements include provisions which prohibit agencies from competitively contracting.”

Regardless of whether the state appeals today's ruling on the GA rul!
es, Washington policymakers should simplify the bidding process to make!
it easier for agencies to use competition to improve services. Lawmakers should also shield contracting out from union and political influence by removing it from the collective bargaining process. Improving service to the public is too important to be a bargaining chip in government labor negotiations.

Protestors target government spending priorities

September 14, 2009 in Blog

Protests were held across the country this past Saturday by citizens frustrated with the spending decisions being made in Washington D.C. Among the local protests were rallies at the state capitol in Olympia and in Yakima. Here are some photos of the Olympia rally

When asked by The Yakima Herald why he was at the Yakima rally, sixty-nine year old Jack Weston replied:

“Bank bailouts should never have happened. Taking over the car companies should never have happened,” he said.

He ultimately came away encouraged. “I’m doing a small part in protecting this county.”

The largest of the spending protest occurred in Washington D.C. with a!
n estimated tens of thousands converging on the Capitol. The New York Times reports the number of protesters took authorities by surprise: 

A sea of protesters filled the west lawn of the Capitol and spilled onto the National Mall on Saturday in the largest rally against President Obama since he took office, a culmination of a summer-long season of protests that began with opposition to a health care overhaul and grew into a broader dissatisfaction with government.

On a cloudy and cool day, the demonstrators came from all corners of the country, waving American flags and handwritten signs explaining the root of their frustrations. Their anger stretched well beyond the health care legislation moving through Congress, with shouts of support for gun rights, lower ta!
xes and a smaller government . . .

tyle="margin-left: 40px;">The demonstrators numbered well into the tens of thousands, though the police declined to estimate the size of the crowd. Many came on their own and were not part of an organization or group. But the magnitude of the rally took the authorities by surprise, with throngs of people streaming from the White House to Capitol Hill for more than three hours.

Perhaps adding fuel to the fire was this Congressional Budget Office report on the federal budget released September 8:

The federal budget deficit for the first 11 months of fiscal year 2009 was almost $1.4 trillion, CBO estimates, close to $900 billion greater than the deficit recorded through August 2008. Outlays were $518 billion (or 19 percent) higher and revenues $365 billion (or 16 percent) lower than the amounts recorded during the same period last year!
. . .

Outlays for the first 11 months of fiscal year 2009 neared $3.3 trillion, 19 percent more than in the same period last year. (The increase comes to 20 percent when the amounts are adjusted for shifts in the timing of certain payments.) Much of the growth in outlays stems from spending for the Troubled Asset Relief Program (TARP), cash disbursements for Fannie Mae and Freddie Mac, and spending for ARRA. Without those effects, total federal spending would be up by only 7 percent.

Thus far, the Treasury has recorded $174 billion in costs for the TARP and $83 billion in net cash payments to the GSEs. Through August, approximately $85 billion has been spent as a result of ARRA. About one-third of that amount ($28 billion) was for the temporary increase in the federal share of Medicaid costs. Unemployment benefits also have been boosted—by $16 billion—because of ARRA; higher unemployment and other legislat!
ed increases also contributed to the rapid growth in that program’s s!
pending since last year. Other provisions of ARRA contributed about $40 billion to the increase in outlays for “Other Activities,” mainly for payments to Social Security beneficiaries, grants to states (from the State Fiscal Stabilization Fund), student aid, and food and nutrition programs.