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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.

Judge rules for OFM in dispute with Eyman

September 11, 2009 in Blog

Thurston County Superior Court Judge Richard Hicks has rejected Tim Eyman's legal challenge of I-1033's fiscal impact statement prepared by the Office of Financial Management (OFM). This means OFM's I-1033 analysis will be included without alteration in the voters' pamphlet.

According to OFM, 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. 

These tables (click link) show the year-by-year revenue growth, I-1033 fiscal growth factor and forecasted property tax rebates pro!
jected by OFM.

Yesterday the Washington Research Council released its analysis of I-1033. Here is the Council's conclusion:

Passage of Initiative 1033 would reduce revenues available to state, city and county budgets in
the coming years. Revenues in excess of the limit would be returned to property taxpayers as relief in the following year, beginning in 2012. Also, the pattern of property tax relief may well be lumpy.

The state’s recent experience with I-601 may be instructive. In its early years, the initiative successfully kept a lid on state spending. Over time, lawmakers repeatedly amended the initiative. Some analysts argue that the ability to amend voter-approved initiatives gives lawmakers the flexibility necessary to adapt to changing fiscal conditions. Others argue that the statut!
ory initiatives here, unlike the constitutional measures in ot!
her states, make it too easy for legislators to circumvent the will of the voters. Typically, legislators have been reluctant to overturn or make substantial amendments in initiatives in the years immediately after passage.

The effects of I-1033 on cities and counties will likely vary considerably. Some communities have substantial population growth, while others have plateaued or even fallen into decline. Economic conditions, property valuation, taxing authorities, and demand for public services are far from uniform across local governments in our state.

Initiative backers say there’s a simple remedy to a too-tight limit: Ask the voters to loosen the restraints. Opponents, on the other hand, object to ballot-box budgeting, which can frustrate long-range planning, delay decision making, and add another layer of election costs to tight budgets. That philosophical debate has been ongoing since well before the 1993 vote to adopt I-601 and is unlikely !
to end this year with I-1033.

However I-1033 plays out over time, the immediate effect will be to hold revenue growth below current projections for the state’s major governments during the anticipated economic recovery, while providing uneven property tax relief beginning in three years.

The Washington Policy Center will be releasing its review of I-1033 in the coming weeks.

OFM responds to Eyman's I-1033 fiscal note challenge

September 10, 2009 in Blog

Earlier this week I mentioned Tim Eyman's lawsuit against the Office of Financial Management (OFM) to change
the details in the fiscal note the agency created for the voters'
pamphlet for Initiative 1033.

Here is a copy of OFM's response to Eyman's lawsuit.

Of note from OFM's brief:

Virtually every argument that Plaintiffs advance to take issue with OFM's stated assumptions rests on rules of statutory construction, contrasts Plaintiffs' interpretation of the measure with OFM's interpretation, appeals to the exercise of "logic", or acknowledges ambiguity in the measure. Endeavoring to resolve ambiguities in a proposed law surely entails the exercise of judgment and discretion. And even where Plaintiffs alternatively claim that the scope of I-1033 is clear, the language of the measure belies the meaning that Plaintiffs !
would give to I-1033.

For example, one of Plaintiffs' principal claims is that there is no basis in I-1033 for OFM's assumption that "general fund revenue" for purposes of I-1033 is confined to "taxes, fees and other governmental charges." According to Plaintiffs, "taxes, fees and other governmental charges" are merely illustrative of "general fund revenue" under I-1033. Inexplicably, in making this claim, Plaintiffs fail to note the measure actually defines "general fund revenue" and defines it in a manner entirely consistent with OFM's fiscal impact statement assumptions as to the scope of "general fund revenue."

One of Eyman's complaints is that the "Fiscal Impact Statement erroneously assumes that the initiative's
reference to 'taxes fees or other governmental charges' limits the
types of revenue included within the revenue limit applicable to the
state."

Here is the declaration of Julie Murray, Legislative Director for OFM, describing the process OFM used to build the fiscal impact statement in question.

Here is the declaration of Shane Hamlin, Assistant Director of Elections for the Secretary of State, disputing Eyman's claim that there is still time to change the voters' pamphlet if the Judge orders OFM to create a new fiscal impact statement.

The hearing to resolve this dispute is scheduled for 9 a.m. on Friday.

Eyman sues OFM over I-1033 fiscal note

September 8, 2009 in Blog

As reported by The Olympian, Tim Eyman is suing the Office of Financial Management (OFM) to change the details in the fiscal note the agency created for the voters' pamphlet for Initiative 1033. I-1033 would create a new revenue
limit for the state and several local governments with the goal of
annually reducing property taxes. As required by law, OFM conducted the fiscal impact statement on I-1033.

According to Eyman's lawsuit:

  • The Fiscal Impact Statement erroneously assumes that the initiative's reference to "taxes fees or other governmental charges" limits the types of revenue included within the revenue limit applicable to the state;
  • The Fiscal Impact Statement erroneously assumes that government charges for publications and documents are not included in the revenue limit;
  • The Fiscal Impact Statement is misleading in excluding "grant and loan repayments", "indirect and prior cost recoveries," and "unclaimed property" because it gives the impression that revenues to the applicable funds will not be treated as revenues to the applicable funds;
  • The Fiscal Impact Statement is erroneous in excluding "federal and state direct and indirect grants" from the revenue limits applicable to counties and cities;
  • The Fiscal Impact Statement is erroneous and misleading in excluding from the revenues of counties and cities "charges for contracted services performed by counties and cities" and "charges for enterprise activities that are not governmental in nature;"
  • The Fiscal Impact Statement is erroneous and misleading in excluding "inter-fund and inter-departmental charges;" and
  • The Fiscal Impact Statement's assertion that this measure is applicable to towns is erroneous.

In an August 21 letter, OFM Director Victor Moore noted:

OFM's role in interpreting the statute extends only to developing assumptions to estimate any projected increase or decrease in revenues, costs, expenditures, or indebtedness that the state or local governments will experience if the ballot measure were approved by state voters. Only a court of law can definitively interpret a statute, and therefore, all relevant factors used for our estimates, including areas of statutory interpretation, are clearly identified as assumptions within the fiscal impact statement.

In addition, prior to submitting the statement to the Secretary of State's Office, OFM provided the assumptions to the Attorney General's Office (AGO) for its review in accordance with the statute referenced above. The assumptions were returned to OFM unchanged. The AGO did not suggest or require any changes and found no flaws in th!
e assumptions as presented. For these reasons, we believe our fiscal impact statement assumptions do not require revision.

A hearing has been scheduled for 9 a.m. Friday.

Senator challenges press on public records exemption

September 1, 2009 in Blog

Yesterday the state Sunshine Committee voted 8-1 to recommend the Legislature repeal its exemption to the public records act for legislative records. State legislators are currently the only officials in the state with this exemption. The lone no vote was Sen. Adam Kline, Chair of the Senate Judiciary Committee.

Reporting on the vote Crosscut notes:

In this state, the 2007 Legislature passed a law that shields
journalists from having to reveal their sources in court. Kline was
prime sponsor of that shield-law Senate bill. Representative Lynn
Kessler, another Sunshine Committee member, was prime sponsor of the
identical House version, which became law.

Kline says he asked journalists on the Sunshine Committee “why [a
source's identity] should be confidential to them and not to us.” He
says he didn't get an answer. “ There is no difference,” he says. “They admit it by their silence.”

Kline readily concedes that some communications from constituents are “venal,” but he thinks the public interest in protecting potential whistle blowers outweighs the public interest in exposing people who, say, try to buy votes. Kline reasons that some people who have sensitive information won't come forward if they know their identities can be made public. Is that speculation? Of course, Kline says. But he suggests it is also speculative that the lack of a shield law before 2007 kept sources from communicating with journalists. “I feel that those people [who provide sensitive information to legislators] need to be shielded just as they are when they go to a news reporter,” he says.

The press, however, did answer the Senator's question at the Sunshine Committee hearing yesterday. Here is the exchange between Sen. Kline an!
d Rowland Thompson, Executive Director of Allied Daily Newspapers of Washington:

Sunshine Committee votes to repeal legislative records exemption

August 31, 2009 in Blog

At long last the state Sunshine Committee voted to repeal the Legislature's exemption from the public records act. Committee Chair Tom Carr originally proposed the resolution on March 18. By a 8 to 1 vote:

The
Committee recommends that the legislature eliminate the Legislative
exemption, which excludes from public scrutiny personal records of the
legislature, including e-mails, correspondence, except when designated
as a public record by a “official action of the Senate or House of
Representatives.” Every other legislative body in the state of
Washington is fully subject to the public records act. There is no
principled reason why the state legislature should be exempt. 

Implementing this recommendation would require amendment of RCW 42.56.010(2) as follows: "Public record" includes any writing containing information relating to the conduct of government or the performance of any governmental or proprietary function prepared, owned, used, or retained by any state or local agency regardless of physical form or characteristics.

This change addresses the Legislature's
double standard when it comes to compliance with the public records
law. Now it is up to the Legislature to act on the Sunshine Committee's recommendation next session.

Voting yes: Thomas Carr, Senator Pam Roach, Representative Lynn Kessler, Rowland Thompson, Ken Bunting, Patience Rogge, Ramsey Ramerman, and Frank Garred.

Voting no: Senator Adam Kline

Additional Information
Legislative records exemption vote postponed again

UPDATED: Did TABOR destroy Colorado?

August 28, 2009 in Blog

This November Washingtonians will vote on Initiative 1033. The measure is sponsored by Tim Eyman and would create a new revenue limit for the state and several local governments with the goal of annually reducing property taxes.

Due to the similarities between I-1033 and Colorado’s Taxpayer Bill of Rights (TABOR), opponents of I-1033 have sought to compare the impact of TABOR in Colorado to what voters can expect to happen in Washington if I-1033 is enacted.

Without debating the details of I-1033, it is worth considering the claims about TABOR's impact in Colorado.

According to I-1033 opponents:

In Colorado, core public structures deteriorated under TABOR. From 1992 to 2005, the state experienced significant decay in health care, K-12!
and higher education, transportation infrastructure, and other basic public services.

The opponents use a bevy of statistics to make their case.

As Mark Twain once noted, however, "There are three kinds of lies: lies, damned lies, and statistics."

Illustrating this observation, the Tax Foundation has come to a different conclusion about TABOR's effect in Colorado. In a report refuting some of the statistics cited, the Tax Foundation noted in 2005:

The state of Colorado is under assault. Opponents of Colorado’s
Taxpayer Bill of Rights (TABOR) are waging a well coordinated but
misleading attack on Colorado’s reputation. This attack takes the form
of a number of rankings and statistics that purport to show that the
Taxpayer Bill of Rights has decimated Colorado. These rankings and
statistics are based on the assumption that if Colorado ranks poorly on
things like the adequacy of prenatal care and education spending, then
Colorado is failing to adequately care for and educate its citizens,
and that the Taxpayer Bill of Rights must be to blame. A closer look at
the attacks shows that they fail to prove that the amount a state
spends on health care and education determines quality, and they also
fail to tell the whole truth about the rankings and statistics of the
state of Colorado [please see study and links below for details] . . .

Contrary to the assertions of its opponents, the Taxpayer Bill of Rights has not decimated Colorado. In other measures of fiscal standing, not mentioned by the opponents of the Taxpayer Bill of Rights, Colorado compares very favorably to other states. Colorado’s per capita tax burden is the tenth lowest in the nation, ranks as the 8th friendliest business-tax climate (the highest ranking of any state with a sales tax and a corporate and personal income tax), and ranks as the state with the 2nd highest level of economic freedom. It is simply inaccurate to say that Colorado is a sub-standard state based on selectively cited statistics and national rankings, and even more inaccurate to blame the Taxpayer Bill of Rights for any perceived inadequacies.

I-1033 opponents also note the voters in Colorado !
suspended TABOR in 2005, purportedly proving their dislike for the results provided. While this temporary suspension until 2010 did occur, TABOR remains popular in Colorado. In fact, an effort to permanently repeal the TABOR state tax refunds (Amendment 59) failed in 2008 with 55 percent voting against. This means the people of Colorado have decided that TABOR will be back to its full force and effect in 2010.

Does this mean that I-1033 is good or bad policy? That's a debate that will go on till election day but it shouldn't hinge on misrepresenting Colorado's TABOR.

Additional Information
TABOR: What Was Said vs. What Really Happened
Exposing TABOR Data Games
TABOR Benefits !
Colorado's Citizens: A Response to Misleading Video

Open Government Task Force Members

August 27, 2009 in Blog

State Auditor Brian Sonntag announced yesterday he is creating an Open Government Task Force with Attorney General Rob
McKenna. The purpose of the new Task Force
is to study and make recommendations on the creation of an
administrative board to rule on complaints of violations regarding the
state's open government laws. The Task Force meetings are scheduled for
October 5, 2009 and November 2, 2009 from 9 a.m. to 1 p.m. at the
Attorney General's Office in Olympia. Below is a list of the Task Force members:

Co-Chairs:
  • Rob McKenna, Attorney General
  • Brian Sonntag, State Auditor

Staff Contact:

  • Tim Ford, Open Government Ombudsman for Attorney General's Office

Task Force Members:

  • Paula Adams, Public Information and Records Officer for King County Department of Development and Environmental Services
  • Jim Doherty, Legal Consultant, Municipal Research and Services Center
  • Judy Endejan, Attorney, Graham and Dunn
  • Ruth Gordon, County Clerk for Jefferson County
  • Jerry Handfield, State Archivist for Secretary of State
  • John Hendrickson, Kenmore City Council Councilmember
  • Mary Hunt, Douglas County Commissioner District 3
  • Chris Hurst, State Representative, 31st District (member of State Government Committee)
  • Graham Johnson, (Executive Director of the Public Disclosure Commission 1974-1993)
  • Lynn Kessler, State Representative, 24th District – Majority Leader
  • Joel Kretz, State Representative, 7th District
  • Mark Lindquist, Pierce County Prosecuting Attorney
  • Louis Mitchell, Bremerton School Board of Directors
  • Bob Morton, Senator, 7th District
  • Shirley Nixon, Citizen Activist
  • Toby Nixon, President Washington Coalition for Open Government
  • Bob Partlow, Foster Parent Support and Recruitment for Department of Social and Health Services
  • Althea Paulson, Kitsap Regional Library Board Member
  • Kevin Phelps, Deputy County Executive & Executive Director of Operations & Infrastructure for Pierce County
  • Craig Ritchie, Attorney for City of Sequim
  • Rowland Thompson, Executive Director Allied Daily Newspapers of Washington

Here are additional details about the Open Government Task Force:

We [McKenna and Sonntag] 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 who 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.

The Task Force may consider the pros and cons of the open government enforcement efforts in Connecticut, New Jersey, and New York.