Jmercier

Harvard economists: Cut taxes to increase growth

November 24, 2009 in Blog

While elected officials at the state and federal level debate the need for tax increases and "fiscal stimulus spending," a recent economic study suggests instead taxes and spending should be cut to spur economic growth and reduce deficits.

Here is the abstract from an October 2009 study by Harvard economists Alberto Alesina and Silvia Ardagna (Large changes in fiscal policy: taxes versus spending):

"We examine the evidence on episodes of large stances in fiscal policy, both in cases of fiscal stimuli and in that of fiscal adjustments in OECD countries from 1970 to 2007. Fiscal stimuli based upon tax cuts are more likely to increase growth than those based upon spending increases. As for fiscal adjustments those based upon spending cuts and no tax increases are more likely to!
reduce deficits and debt over GDP ratios than those based upon tax increases. In addition, adjustments on the spending side rather than on the tax side are less likely to create recessions. We confirm these results with simple regression analysis."

The study concludes (in-part):

"As we argued in the introduction it is unlikely that these deficits and debt will disappear simply because growth will resume at very rapid pace very soon. Primary suppresses would be needed since interest rates cannot go other than up from the close to zero actual levels. The analysis of the present paper suggests that primary spending needs to be kept under tight control otherwise increasing taxes running after ever increasing spending will not work."

Speaking of economists and the current budget debate in Olympia, earlier this year more than 30 economists warne!
d state officials

that raising taxes "during a recessionary period is contrary to
responsible economic policy and instead will thwart the state’s
economic recovery."

Executive branch needs unified voice on education priorities

November 20, 2009 in Blog

With Washington already behind the eight ball in the quest for the federal "race to the top funds," the last thing we need is for the state's executive branch to be sending conflicting signals about our commitment to accountability. Unfortunately that is exactly what is happening.

Yesterday State Superintendent of Public Instruction Randy Dorn announced his plan to delay the state's math and science graduation requirements. According to his press release:

Citing major concerns with the passing rates on the high school math and science exams, State Superintendent Randy Dorn has proposed significant changes to th!
e math and science graduation requirements. Dorn unveiled his proposal today at the annual conference of the Washington State School Directors Association.

Dorn said students and schools will need more time with new math and science learning standards that are now being implemented around the state. The new standards won’t be assessed until 2011 for math and 2012 for science. That doesn’t provide ample opportunity for the class of 2013, current ninth graders and the first class required to pass four state exams, to learn the standards, or teachers and schools to align curriculum and materials to them, he added.

“It doesn’t take a mathematician to see that we have a big problem in our state. Less than 50 percent of our 10th graders are passing the math and science exams,” said Dorn, who noted 10th graders’ passing rate on the reading and writing exams is more than 80 percent. “We need to be fair to our students and give them time to learn!
the new standards. It’s simply a matter of doing what’s r!
ight.”

This retreat from the state's graduation standards drew a strong rebuke from Governor Gregoire as noted by The Everett Herald:

"I oppose the proposal. As our state and global economies become more technically driven, we need to ensure that our students leave high school highly-trained in math and science so they can qualify for Washington state jobs or entry into training and higher education programs of their choosing.

“Our students are capable of mastering our state's standards in math and science. They have shown us their capacity to meet our expectations in the past. Schools I visited recently give me every indication that when students know the work is important they dig in and make the most of it.

“We can't lower our standards in math, nor can w!
e communicate that science is not important. We must prepare our students for their future. There is every reason to focus attention on the math and science learning needs of our students so they can succeed after high school. The Superintendent is concerned about the graduation rate. I am concerned about the bigger picture - preparing kids for life. I think parents share that concern.”

Education policy is complicated enough without having two members of the executive branch pursuing conflicting strategies and sending mixed signals to the Legislature and citizens. This latest development is just another example of why the Office of Superintendent of Public Instruction (OSPI) should not be an independently elected office but instead should be an appointed office under the Governor's control via her cabinet. This would follow the model used !
for (in-part):

  • Secretary of Social and Health Services
  • Director of Ecology
  • Director of Labor and Industries
  • Director of Agriculture
  • Director of Financial Management
  • Secretary of Transportation
  • Director of Licensing
  • Director of General Administration
  • Director of Commerce
  • Director of Veterans Affairs
  • Director of Revenue
  • Secretary of Corrections
  • Secretary of Health
  • Director of Financial Institutions
  • Chief of the State Patrol

This type of change would address the diffused accountability under the current system. If problems arise with public education voters would know that the solution lies with the Governor. If the Governor fails to use her appointment powers to improve the management and policies of OSPI, voters could take that failure into account at election time.

Budget deficit grows to $2.6 billion

November 19, 2009 in Blog

Washington's budget outlook took another hit today with forecasted revenue dropping $760 million since the September revenue forecast. The result of this is a projected $2.6 billion deficit in the 2009-11 budget adopted earlier this year. 

According to the press release issued by the state's economist, Dr. Arun Raha:

"While growth has returned to the national and state economies, consumer confidence and more critically, consumer spending remain weak. As a result, we are experiencing a revenue-less recovery."

Responding to the news the Governor said in a press release:

"I will produce a budget balance!
d to this revenue projection because I am required to by law. We all know a budget reflects the values of our state. All options must be on the table to produce a budget that works."

The Governor, however, has ruled out calling a special session of the Legislature. 

Tax increases are not the answer and should be removed from the table as an
option to help remove any distractions from making the necessary budget
reductions.

Illustrating this point, earlier this year more than 30 economists warned state officials that raising taxes "during a recessionary period is contrary to responsible economic policy and instead will thwart the state’s economic recovery."

Several state newspapers have also called on state officials to avoid tax increases:

Though lawmakers and the Governor will be tempted to address the state's $2.6 billion budget deficit with one-time fixes, doing so is a recipe for future budget pain and the potential for the state's credit rating to be downgraded. According to Moody's October 9 report on Washington's credit outlook, the following could result in a reduction to the state's credit rating:

  • Protracted structural budget imbalance.
  • Increased reliance on one-time budget solutions.
  • Failure to adopt plan to cover expenditures once federal fiscal stimulus monies are no longer available.

Instead state officials should make fundamental changes by "re-booting" state government as called for by the Governor in her state of the state address last January:

 “. . . one thing we have to do together is reform state government to bring it into the 21st century, and soon. At very basic levels, businesses are struggling to reform, to change the way they do business because they simply must to survive. And our business leaders tell me that American companies, large and small, will emerge from this recession forever changed.

We have to do the same. And that’s government reform.

This is our chance to reform state government to make it a more nimble and relevant partner in a new state economy.

Ladies and gentlemen, we need to reboot!

Over the decades, state government has evolved — layer upon layer upon layer. But too much of what served the peo!
ple well in 1940 or 1960 or 1990 does not serve the people well in the 21st century. We need to make sure we have a government for the 21st century so our workers and businesses can compete with anyone in the world."

 

Governor to Commerce Director: "This is not acceptable"

November 18, 2009 in Blog

Attendees at this morning's GMAP session were witness to a visibly disappointed Governor expressing her displeasure with an agency's lack of performance. The focus of the meeting was the state's use of the federal stimulus funds. One of the activities highlighted was Commerce's weatherization program.

Commerce Director Rogers Weed opened his presentation by asking the Governor to lower the target for the number of housing units to be weatherized since it would be unlikely for Commerce to meet the current goal. Weed indicated the problem was caused by questions concerning prevailing wage requirements and how much workers should be paid for the weatherization projects.

The original goal for the 2nd quarter was to weatherize 935 units. Commerce's actual production was 107 units.

Responding to this the Governor said she was absolutely disappointed with how many fingers wer!
e being pointed and the bureaucracy getting clogged up. She also stressed that she didn't understand why the problem surrounding the prevailing wage confusion wasn't identified sooner to allow for corrective action. She concluded her criticism by saying "this is not acceptable" and reminded those who work for government that they are the guardian of taxpayer dollars.

Beyond the Commerce fireworks there was other news of note from today's GMAP meeting:

  • The Governor commented that the accountability states are being held to for the stimulus funds is "mind boggling" and only 1/10 of what the big banks were required to do under TARP.
  • The Governor mentioned a phone call she recently had with the Vice President about the cliff states will fall off if the federal funds for social services (Medicaid, etc) are not extended for use next year and that she is actively lobbying for more federal funds.
  • The Governor stressed the need for agencies to focus on whether results were actually being achieved for expenditures not simply whether the money can be accounted for.

Also discussed was an overview of the state's stimulus funds:

  • $2 billion for program grants - 30,000 jobs (24,000 of which are in education)
  • $2 billion for federal direct expenditures - 2,900 jobs
  • $1 billion for local governments and non-profits - 3,000 jobs
  • $1 billion for assistance to individuals (Medicaid, etc)

The state was not required to keep track of how many of those jobs are new. Last month The News Tribune questioned the 24,000 education jobs reported. From the article:

New numbers released by the federal government Friday estimate that the federal stimulus package has helped create or save 34,500 total jobs in Washington, making it the state with the third-largest reported number of stimulus jobs behind California and New York.

But there’s a caveat on those job creation numbers: 24,000 of them probably weren’t in danger in the first place.

State officials used a chunk of stimulus money to cover paychecks for 24,000 teachers who were already contracted to finish out the school year. That money came from a pot of stimulus funds given to the state to hel!
p offset budget cuts.

Without that funding, the money to pay the teachers would have come out of the state general fund, said Jill Satran, Gov. Chris Gregoire’s main adviser on stimulus projects.

That would have meant cuts elsewhere, Satran said, but the job losses that would have resulted from such cuts is difficult to quantify. Few, if any, of the 24,000 teacher jobs would have been among them, Satran said.

Governor willing to wait on budget fix

November 17, 2009 in Blog

Governor Gregoire will not call a special session of the Legislature despite a budget deficit likely to exceed $2 billion after Thursday's state revenue forecast. Sen. Joe Zarelli (R-18), ranking member on the Senate Ways and Means Committee, has been calling for a special session for months. Zarelli issued this statement in a press release last week:

“The Legislature doesn’t have to sit back and wait for the governor to bring out her budget proposal next month. We can call ourselves into special session in early December, when we’re already scheduled to be at the Capitol. The budget writers already know where they can reduce spending; the sooner we act, the more can be saved to preserve important programs which otherwise would be subject to slashing later.
 
The alternative to spending reductions is tax hikes. The majority party won’t come out and say it is planning to fill the budget gap t!
hrough higher taxes, but if the taxpayers don’t see quick action in Olympia to lower spending, they will see something else: the writing on the wall that tax increases are coming in 2010, even though people can’t afford higher taxes.”

According to The Olympian, the Governor has no plans to call a special session and instead will wait to take action next year:

Gov. Chris Gregoire rejected new Republican calls for a special legislative session in early December to deal with the growing budget shortfall, despite her prediction it might hit $2.5 billion after Thursday's revenue forecast . . .

“This is not something you do overnight. It’s something you do thoughtfully,” she said, rejecting Republican Sen. Joe Zarelli’s renewed calls for a special session in early December when lawmakers !
are in town. Gregoire contended special sessions would cost mo!
ney and that budget-writers in the Legislature that she’s talked to “haven’t gone in-depth” on the budget and don’t want to do anything piecemeal.

State law prohibits a cash deficit from occurring by requiring the Governor to take action. Here is what RCW 43.88.110(7) says:

If at any time during the fiscal period the governor projects a cash deficit in a particular fund or account as defined by RCW 43.88.050, the governor shall make across-the-board reductions in allotments for that particular fund or account so as to prevent a cash deficit, unless the legislature has directed the liquidation of the cash deficit over one or more fiscal periods . . .

Since the Governor has not ordered across-the-board reductions as required by law and will not call a special session to address the $2 billion plus de!
ficit, she should veto any bills passed by the Legislature until the budget deficit is resolved.

Delay only exacerbates the budget problem and makes the needed corrections more difficult. If there isn't the will to fix the problem now the Governor and lawmakers must commit to fix the problem at the beginning of the session versus waiting until the waning days.

Tax increases, however, should be removed from the table as an option to help remove any distractions from making the necessary budget reductions.

As noted by these economists, the worst time to raise taxes is during a recession or fledgling recovery.

It appears that at least one Democrat member of the House Ways and Means Committee recognizes this. From The Everett Herald:

style="margin-left: 40px;">Rep. Mark Ericks, D-Bothell, who is vice chairman of the House Ways and Means Committee, said the Legislature tried to “spread the pain” last year by paring a little from everywhere. Now they must look at mothballing entire programs.

“From my perspective, that is what we have to do,” he said. “That won’t make some people happy but that is what is ahead for us.”

No one’s talked to Ericks about hiking taxes. Nor does he think it’s a panacea.

“Where’s that tax that people would raise that would temporarily increase our revenue to get us over the hump? I don’t see it,” he said. “The whole issue about the tax is a red herring.”

OFM releases 2009 report on state boards and commissions

November 4, 2009 in Blog

The Office of Financial Management (OFM) has published its 2009 Boards and Commissions Report. According to OFM:

"The 2009 BOARDS AND COMMISSIONS REPORT provides basic information about boards, commissions, and committees in state government. State law requires the report to assist in promoting legislative and executive oversight of these organizations. This is the sixteenth biennial edition of the publication.

The information in this report covers the period from July 1, 2007, through June 30, 2009. During the 2009 Legislative Session a number of boards were eliminated or consolidated by executive order or legislation. A list of those boards is attached and, if the board submitted a report for this period, a note is also included on that report .!
. .

In 2009, 449 boards, commissions, councils, committees, and similar groups in state government provided information for this report."

Boards and Commissions were required to provide the following information for the report:

  • Year created
  • Number of members
  • Number of meetings held
  • Legal authorization
  • Appointing authority
  • Summary of primary responsibilities
  • Compensation
  • Operating costs
  • Fund source

Here are the details for each state board and commission.

Election week begins

November 3, 2009 in Blog

For most voters across the nation today is Election Day. In Washington State, however, today marks the beginning of election week(s) and the possibility for some close races, election month.

In most states mail-in ballots must either be received by Election Day or must be dropped off before the polls close. Washington, however, only requires that a ballot be postmarked by Election Day. This policy unnecessarily complicates the tabulation of votes and can leave the results of close races a mystery for weeks.

With the state's ongoing move to close all poll locations, it is time to require all ballots be received on Election Day. This is exactly what Arizona, California, Colorado, Florida, Georgia, Hawaii, Idaho, Kansas, Maine, Montana, Nebraska, Nevada, New Jersey, New Mexico, Oklahoma, Oregon, South Dakota, Vermont, Wisconsin, and Wyoming require. North Carolina goes a step further requiring absentee ballots to be returned by 5 p.m. the day before the elec!
tion.

Secretary of State Sam Reed supports requiring mail in ballots to be turned in by Election Day. Speaking on his behalf, Elections Director Nick Handy told the Associated Press last year “We believe it builds greater trust and confidence in the system.”

Despite having the Secretary of State’s support, bills introduced in the past to make this change have died. This year the Secretary of State's request bills (SB 5631 and HB 1623) were not acted on by the Legislature. Here is the bill summary for HB 1623:

"Absentee ballots must be received by the county auditor by 8:00 p.m. on the day of the primary or election in order to be valid. For out-of-state voters, overseas voters and service voters, the d!
ate on the return envelope to which the voter attested must be!
no later than the day of the primary or election in order for the ballot to be valid.

The tabulation of absentee ballots may commence at 8:00 a.m. on the Monday immediately before the day of the primary or election. The tabulation results must be held in secrecy until after 8:00 p.m. on the day of the primary or election."

This election reform should be considered again next year.

Although the numbers will change over the coming days, election results will be available on the Secretary of State's website starting at 8 p.m.

State Auditor's Office reviews its performance measures

November 2, 2009 in Blog

The State Auditor's Office (SAO) acts as the eyes of citizens to help ensure state and local governments are operating in an accountable, transparent and effective manner. To help lead by example, staff at SAO met last week to focus on strategic planning and performance measures planning session for the agency.

I had the opportunity to sit in on the sessions and was very impressed with the direction SAO is heading.

Earlier this year the Office of Financial Management (OFM) issued an assessment of the performance measures SAO was using for its activities. OFM said:

With two possible exceptions, the current performance measures in the Performance Measure Tracking System (PMT) should be replaced with outcome/result measures that are more relevant to a budget/policy development audience. In particular, survey results a!
nd the cost of performing the audits in relation to the size of the audited entity, are better as internal performance management perspectives. This assessment offers suggestions about the types of measurement topics that would tell a more complete and compelling performance story.

SAO responded by holding the performance measure planning sessions last week. Here is some of the information discussed at that session:

A performance measure is a quantifiable expression of the amount, cost, or result of activities that indicate how well, and at what level, services are provided.

Performance measures provide a snapshot of current performance capabilities and track whether actual performance is getting better, !
staying the same, or getting worse over time.

What !
isn’t a performance measure?

  • Statements of what you intend to do or how you intend to do it. (Goals, objectives, and strategies)
  • Performance questions that can be answered with a “yes” or “no”
  • A timeline of when something will be accomplished
  • The responses from a survey

What are the Attributes of Good Performance Measures?
  • Relevance - Useful to an external audience of stakeholders to assess the level of accomplishment
  • Understandability - Clear, concise, and easy for a non-expert to understand
  • Comparability - Do the data, targets, and footnotes provide the reader with enough context to tell whether performance is getting better, worse, or staying the same?
  • Timeliness - Is the data current and reported frequently enough to be of value in assessing accountability and making decisions?
  • Consistency - Is the data collection method standardized and is the operational definition for data calculations adhered to?
  • Reliability - Is the information verifiable, free from bias, and a faithful representation of what it purports to represent?
  • Performance - Is actual performance in reference to the stated targets getting better, worse, or staying the same over time?

All agencies (state and local) should undergo the same type of self-reflection as SAO to help improve their performance measures. Doing so will allow elected officials to have access to meaningful performance data to help guide budget decisions.

Open Government Task Force Meeting Nov. 2

October 29, 2009 in Blog

The Open Government Task Force
created by State Auditor Brian Sonntag and Attorney General Rob McKenna
will have its final meeting on November 2 to vote on recommendations to
improve enforcement of 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.

State Auditor Brian Sonntag noted at the October 5 Task Force meeting
that 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.

On the agenda for Monday's meeting:

  • Presentations from the Washington Council of Police and Sheriffs and Seattle Times
  • Vote to Adopt Recommendations

Here are the findings from the draft report:

1) The Public Records Act and Open Public Meetings Act provide rights to the public for access to public records and meetings. The purpose of these laws is to allow the public access to public records and meetings. The courts are not always the best method for enforcing these rights and may be extremely expensive and slow. The added costs and uncertain liability of agencies subject to litigation are a growing concern.

2) There is a critical need for an independent administrative oversight agency to enforce the Public Records Act and Open Public Meetings Act with the purpose of providing an inexpensive, expedited, and clear process for resolving disputes.

3) The independent oversight agency should have authority to adopt rules pursuant to the Administrative Procedures Act to provide clear guidelines for an appeal process, and to issue advisory opinions interpreting the laws to provide clarity on agency duties. The oversight agency should make this information available on its website with other relevant information. The oversight agency should submit an annual report to the legislature on its activities, and recommend legislative reform.

4) Training should be mandatory for designated agency officials for the Public Records Act and Open Public Meetings Act. It would greatly reduce the concern over litigation. The oversight agency should provide periodic training, and make training materials available free on its website.

5) The independent oversight agency may be governed either by:

style="margin-left: 80px;">a) A single independent director ap!
pointed by the Governor who hires appeals officers to manage and decide appeals, and has a term set by law and may only be removed for cause, or

b) It may be governed by a commission.

6) The process for utilizing an appeal to an oversight agency should be expedited. The oversight agency should have a short period set by law to issue a final ruling on any docketed appeal, and a process for requesting immediate rulings on simple issues in less than the period set by law. The oversight agency should have discretion on granting any request for a hearing, and/or conduct a confidential in camera review.

7) The existing legal right to initiating an action under the Public Records Act in superior court applies to any person having been denied an opportunity to inspect or copy a public record, and also for an agency or its representative, or a pers!
on who is named in the record or to whom the record specifically pertains. RCW 42.56.540 – 550. That existing legal right should be extended for any appeal to an oversight agency by a person denied a record, an agency or its representative, or a person who is named in the record or to whom the record specifically pertains.

8) The costs for using the appeals process of the oversight agency should be minimal or none for filing an appeal, and there should be no award of attorney fees, costs, or penalties to a prevailing party at the administrative level.

9) A ruling by the oversight agency is binding on the parties, enforceable in court, and subject to an appeal and de novo review by a court of general jurisdiction. The oversight agency should not be named as a defendant in any appeal to superior court.

10) Use of the adm!
inistrative appeals process of the oversight agency should be encourage!
d to resolve disputes. There may still be a need in emergencies or for other fundamentally apparent reasons to initiate a lawsuit in superior court rather than filing an administrative appeal. A requirement to exhaust an administrative appeal with an oversight agency prior to appealing in superior court would end an existing legal right of the people created by initiative to bring an action directly before an independently elected judge. Therefore a process that allows the option of filing a direct action in superior court should be retained.

11) Adequate funding is vital to allow any oversight agency to successfully perform its work. Funding should be from a dedicated source.

While an administrative appeals option should be pursued, WPC believes it is very important that the right of citizens to go directly to court for relief not be infringed. Here is the video of our comments at the October 5 meeting:

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Agencies asked to determine which programs are mandatory

October 23, 2009 in Blog

The Spokesman Review this morning highlighted an October 15 memo from the Office of Financial Management to state agencies asking agencies to identify which of their activities are mandatory. As reported by the Spokesman Review:

Washington state agencies have been ordered to compile a list of their tasks – and whether they’re required by federal law or the state constitution – in preparation for budget cuts next year.

An Oct. 15 memo from the state Office of Financial Management, the governor’s budget agency, tells all agency directors to describe the work their agency does, the number of employees the work takes and the amount it costs the state’s general fund.

Most agencies must submit their reports by today, although the Department of Social and!
Health Services, one of the state’s biggest agencies, has until next week.

Agencies must indicate whether mandated activities are required by a constitutional provision, federal statute or court decision or by a requirement of the federal Recovery Act, or are “essential for preventing loss of life, addressing imminent issues of public safety or avoiding immediate and catastrophic loss of state property.”

The agencies must report whether functions not covered by those requirements, and therefore “non-mandatory,” are required by state statute or a contract such as a labor agreement, necessary to secure federal matching funds, or work that generates money for the state.

Here are additional details from the OFM memo (in part):

On Sep!
tember 23, I sent instructions for 2010 supplemental budget su!
bmittals that communicated the need for information regarding “mandatory” General Fund-State activities.

I have attached a spreadsheet that shows a list of activities for your agency that have been identified (via the Activity Inventory) as being supported all, or in part, by General Fund appropriations. We are now asking that you distinguish which, if any, activities are mandatory. For this purpose, “mandatory” is defined as an activity that meets one or more of the following criteria:

1. required by constitutional mandates, court decisions, or federal law;

2. required by Maintenance of Effort provisions under the federal American Recovery and Reinvestment Act of 2009;

3. essential for preventing loss of life, addressing imminent issues of public safety, or avoiding immediate and catastrophic loss of state property; or

4. necessary for the governance of mandato!
ry activities.

OFM will use this information as part of consideration of the Governor’s 2010 supplemental budget proposal. We may ask for additional data or decision packages as necessary to expand on policy outcomes and other implications. A designation of “mandatory” or “non-mandatory” does not automatically translate into any particular budget decision. We know that many agencies will not have any activities that are considered mandatory under this narrow definition. This information is being requested because it is clear the state will need to focus on the most essential services as the budget is further adjusted to new revenue projections.

52% opted to donate to state parks in September

October 22, 2009 in Blog

Earlier this month the Washington State Parks and Recreation Commission announced motorists had contributed $1.4 million to state parks by opting to donate $5 on their vehicle license renewals. As explained by State Parks:

In the new donation program, vehicle owners’ license tab renewal notices have an automatic $5 donation added to the total due. Those who do not wish to make the donation simply subtract it from the total due, as outlined on state Department of Licensing renewal notices and payment coupons.

The Legislature projected that State Parks would need $28 million in donations over the two-year budget period starting July 1, to make its budget and keep state parks open. The program started with September renewals, leaving only 22 collection months instead of!
24. Because of this, the agency needs to collect an average of $1.25 million each month over two years to meet its budget. The September 30 total includes donations that were made in July and August – from people who paid their September renewals early and from some who made donations under the preceding donation program.

Thanks to the number crunchers at the Department of Licensing we now can see the raw numbers of those contributing through their vehicle renewals to state parks (link shows County numbers by month).

Parks Fee Donations - State Total

Month 2009

Number of donations

Pool of eligible vehicles

Percent opting to donate

January

8,134

406,466

2.0%

February

7,219

379,520

1.9%

March

11,667

481,693

2.4%

April

14,174

467,157

3.0%

May

16,427

489,211

3.4%

June

18,649

551,772

3.4%

July

16,040

488,398

3.3%

August

92,900

428,940

21.7%

September

213,905

408,703

52.3%

Total

399,115

4,101,860

9.7%

Despite the dramatic increase in the number of motorists contributing to state parks, the new opt-out provision has not been without controversy.

In fact, whether opt-in or opt-out, it is difficult to see the nexus
between motor vehicles and fees for state parks. Perhaps some of these
proposals for park funding should be considered instead: Securing the Future of Washington's State Parks

DOR publishes report comparing Washington's state and local tax ranking

October 22, 2009 in Blog

The Department of Revenue (DOR) today published an updated comparison of state and local tax rankings. According to DOR's press
release:

Washington ranks 26th highest nationally in state and local taxes as a percentage of personal income, and 32nd highest in property taxes, according to newly released federal data covering Fiscal Year 2007.

Washingtonians paid $109.25 in state and local taxes per $1,000 of personal income, compared to a national average of $113.32. Of that, $29.25 went to property taxes, compared to a national average of $34.04.

Washington ranked 15th in state and local taxes per capita at $4,269, $35 more than the national average of $4,234. Washington ranked 27th per capita in property taxes at $1,143, $129 less than the national average of $1,272.

The FY 2007 figures do not reflect the current downturn in the economy, which largely won’t show up until the Fiscal Year 2009 information is available for all states.

The Department’s annual report, Comparative State/Local Taxes, is ba!
sed on data published by the Census Bureau and Bureau of Economic Analysis. The full report is available here

Here are a couple of tables of note from the report:

State Auditor reviews Commerce's fee use

October 21, 2009 in Blog

The Joint Legislative Audit and Review Committee (JLARC) held a public hearing this morning to discuss the State Auditor's performance audit of the Department of Commerce's use of fees. The performance audit found:

  • Commerce does not follow best practices to identify programs that could charge fees, which could provide the state with additional revenue.
  • Some user fees are not established in accordance with state law and others are not accounted for or used in accordance with state law.
  • Commerce could reduce general fund spending by between $2.2 million and $2.4 million or more over five years if fees were charged for four programs.

Among the audit recommendations was the need for Commerce to use best practices identified by the U.S. Government Accountability Office to determine which government activities should be funded with user fees. Those best practices are:

  • Ensure programs benefit identifiable users
  • It is administratively practical to charge a fee
  • The users have the ability to pay
  • The program is not based on need or merit
  • No other program considerations cause fees to be inappropriate

As noted by the State Auditor, all of these best practices can be used by other agencies.

Here is the video of Commerce's testimony today responding to the audit:

The new fee policy Commerce is developing in response to the performance audit could serve as a good model for other agencies. Especially against the backdrop of the current budget situation, the state should have a fee policy based on best practices in place to help determine which services can be switched from general fund support to a direct user-fee model.

In other news, the State Auditor's Office announced last week its performance audit program has passed its first peer review. Here are the details:

"The State Auditor's Office performance audit program passed its first peer review since t!
he program, authorized by Initiative 900 in November 2005, began.

The performance audit program received the highest level of assurance that an external review team can give on a system of audit quality control.

The review was conducted under the auspices of the National State Auditors Association (NSAA) in conjunction with the National Association of State Auditors, Comptrollers and Treasurers (NASACT).

The letter from the peer review team is available here."

GAO: Nation's long-term fiscal outlook remains unsustainable

October 15, 2009 in Blog

The U.S. Government Accountability Office today released its Fall update on The Federal Government's Long-Term Fiscal Outlook. The prognosis is grim unless our elected officials in D.C. take action soon. From the report:

Weaknesses in the economy and financial markets—and the government’s response to them—have contributed to near-term increases in federal deficits, which reached a record level in fiscal year 2009. While a lot of attention has been given to the recent fiscal deterioration, the federal government faces even larger fiscal challenges that will persist long after the return of financial stability and economic growth. GAO’s simulations continue to show escalating levels of debt that illustrate that the long-term fiscal outlook remains unsustainable. In little over 10 years, debt held by the public as a percent of GDP un!
der our Alternative simulation is projected to exceed the historical high reached in the aftermath of World War II and grow at a steady rate thereafter . . .

Another way to measure the long-term fiscal challenge is the fiscal gap. The fiscal gap is the size of action needed—in terms of tax increases, spending reductions, or some combination of the two—for debt as a share of GDP to equal today’s ratio at the end of a certain period, such as 75 years. For example, under our Alternative simulation, the fiscal gap is 8.5 percent of GDP (or more than $62 trillion in present value dollars). This means that revenue would have to increase by about 47 percent or noninterest spending would have to be reduced by 33 percent on average over the next 75 years to keep debt at the end of the period from exceeding its level at the beginning of 2009 (40.8 percent of GDP).

Policymakers could phase in the policy changes so that the tax increases or spending cuts wou!
ld grow over time and allow people to adjust. However, the lon!
ger action to deal with the nation’s long-term fiscal outlook is delayed, the greater the risk that the eventual changes will be disruptive and destabilizing. Under our Alternative simulation, waiting even 10 years would require a revenue increase of about 58 percent, a noninterest spending cut of about 39 percent, or some combination of the two.

Perhaps it is time to bring back consideration of a federal balanced budget amendment to the Constitution.

9th Circuit Court of Appeals orders release of R-71 petitions

October 15, 2009 in Blog

The Ninth Circuit Federal Appeals Court has ruled for Secretary of State Sam Reed in the dispute whether or not to release the R-71 petitions in response to a public records request. Here is the Court's order

The court, after consideration of the record and briefs of the parties, and oral argument, has determined that the district court’s Order Granting Plaintiffs’ Motion for Preliminary Injunction (the “Preliminary Injunction Order”), filed September 10, 2009, relies on an incorrect legal standard and, therefore, must be reversed.

It is therefore ordered:

1. Appellants’ motion for a stay pending ap!
peal is granted and the Preliminary Injunction Order is hereby stayed, effective immediately, pending final resolution of these appeals.

2. An opinion setting forth the reasons for the court’s reversal of the Preliminary Injunction Order shall be issued expeditiously and in due course.

This decision should mean there will be quick resolution to yesterday's ruling in Thurston County Superior Court granting a temporary restraining order against Sam Reed concerning compliance with a public records request for copies of past initiative petitions.