Jmercier

Governor's budget proposal

December 18, 2008 in Blog

There will be a lot written and said about the Governor's budget in the coming days. We will hear a lot about drastic cuts and how the state will cease to function because of the Governor’s proposed changes. One point that may get lost in the debate but shouldn't is the fact that despite very real reductions in some programs, overall state spending will still be higher biennium over biennium if the Governor's budget is adopted.

That's right - the overall budget will still grow over previous cycles.

General Fund State Spending Growth
(Dollars in Millions)

Budget

Expenditures

$
Increase

%
Increase

1999-01

$21,046.7

$1,887.8

9.9%

2001-03

$22,548.8

$1,502.1

7.1%

2003-05

$23,671.7

$1,122.9

5.0%

2005-07

$27,766.1

$4,094.4

17.3%

2007-09*

$29,412.0

$1,645.9

5.9%

2009-11*

$30,579.0

$1,167.0

4.0%


*As proposed by Governor 12/18/08

How is this possible? Despite the economic situation state revenues are still projected to grow biennium over biennium though at a slower rate than initially thought but it is growth nonetheless. This is in contrast to the 2001-03 budget cycle when revenues actually decreased from the 1999-01 levels.

General Fund State Revenue Growth
(Dollars in Millions)

Budget

Revenue

$ Increase

% Increase

1999-01

$21,262.1

$1,642.0

8.4%

2001-03

$21,140.7

<$121.4>

<0.6%>

2003-05

$23,388.5

$2,247.8

10.6%

2005-07

$27,772.0

$4,383.5

18.7%

2007-09

$28,626.6

$854.6

3%

2009-11

$30,070.4

$1,443.8

5%

We'll have more to say about the Governor's budget after we've had time to read it line-by-line. Assuming the Governor effectively prioritized and selected those programs demonstrating the best results, she should fight hard for her proposal and not let the Legislature use it as a floor for budget discussions. She should also fight legislative efforts to raise taxes.

The Governor is absolutely correct when she said today: "No way to tax your way out of this problem. We have to live within our means."

Obama should bring government transparency into the 21st century

December 17, 2008 in Blog

The Examiner (Washington, D.C.) published our op-ed today on the need for President-elect Obama to make fundamental reforms to improve government transparency and accountability. I teamed up with Patrice McDermott, Director of OpenTheGovernment.org, to write the op-ed.

It is based on the national 21st Century Right to Know Coalition's recommendations to Obama published last month.

Here is an excerpt from the op-ed:

Even if secrecy was not on the rise, President-elect Obama would still face significant challenges in making government more transparent. At t!
he root of the problem is that government is still grounded in a 20th century (some might even say 19th century) approach to openness. Yet today’s interactive technologies make it possible to make quantum leaps forward in improving transparency.

Transparency is a powerful tool to demonstrate to the public that the government is spending our money wisely, that politicians are not in the pocket of lobbyists and specials interest groups, that government is operating in an accountable manner, and that decisions are made to ensure the safety and protection of all Americans. Effective transparency means that the public has access to accurate information in a timely manner. With today’s technology, it also means such information should be available in searchable formats, making it easier for commercial or government search engines to sift through mountains of material . . .

Obama has many transparency models he can pull from. For example, immediately upon!
taking office in January 2007, Florida Governor Charlie Crist!
issued an executive order on government ethics that created a new Office of Open Government; ordered training on public records, open meetings, and records retention; required comprehensive reviews of agencies’ performance in providing the public access; and directed agencies to use plain language to make information more understandable. The Crist order is a perfect example of laying out a policy vision for government transparency in a manner that conveys the importance of the issue.

Even though Washington State is ahead of the curve when it comes to open government, there are many recommendations from the 21st Century Right to Know Coalition's report in Chapters D & E that are
applicable for the state.

These recommendations were discussed at a meeting in Baltimore back in September.  Here is a copy of the full report: 21st Century Right to Know Recommendations

Your budget recommendations

December 15, 2008 in Blog

The Governor asked and you answered.

I've spent the last few hours reviewing the volumes of budget recommendations provided to the Governor in response to her request for suggestions. So what have you been saying? Here is a sampling:

  • Don’t ask for federal bailout money.
  • Cut salaries versus layoffs.
  • Get the state out of the liquor business.
  • Increase state employee health care cost sharing.
  • Promote more telecommuting and more teleconferencing.
  • Merge state agencies with similar responsibilities (L&I/ESD).
  • Eliminate prevailing wage.
  • Consolidate state offices to save on rent.
  • Simplify and streamline all processes, such as contracting. Make things easier to accomplish, not more difficult.
  • Eliminate all state travel except field and work with the public.
  • Re-negotiate the union contract and eliminate pay raises for all employees – managers, elected officials, everyone for the next 4 years.

Here are additional recommendations and WPC's suggestions.

Many thanks to the Governor's office for responding so quickly to my records request and providing this information.

Deficit not that bad . . .

December 15, 2008 in Blog

. . . so says Speaker of the House Frank Chopp. According to the Tri-City Herald:

House Speaker Frank Chopp said Washington's projected deficit may not be as bad as it looks.

Chopp,
a Seattle Democrat, was in the Tri-Cities on Friday for a forum with
the Columbia Basin Badger Club, a local group that grills politicians
and newsmakers on political issues without taking sides.

Several
club members from the audience of about 75 asked Chopp about the state
budget, which officials estimated in November would face a $5.1 billion
shortfall in the upcoming biennium.

But Chopp said
the doom-and-gloom prophecies include estimates for $1 billion in
spending on new programs, which seems unlikely given the current
revenue picture.

"In fact, we won't do that now," he said.

Some programs -- like the idea of offering all-day kindergarten -- will have to wait until the economy turns around, he said.

Chopp
identified several ways he expects the Legislature will look at
slashing spending so it doesn't have to borrow money to balance the
budget.

Among those were cutting programs added to the budget in
recent years that aren't working, like a job search program through the
Employment Security Department that has only a 5 percent success rate.

"We're going to wipe that out," Chopp said.

Kudos to the Speaker for putting the budget discussion into context. It is also important to remember that state revenues are projected to be $855 million higher in the current budget than the last and $1.4 billion higher for the next budget.

General Fund State Revenue Growth
(Dollars in Millions)

Budget

Revenue

$ Increase

% Increase

1991-93

$14,862.2

-

-

1993-95

$16,564.6

$1,702.4

11.5%

1995-97

$17,637.7

$1,073.1

6.5%

1997-99

$19,620.1

$1,982.4

11.2%

1999-01

$21,262.1

$1,642.0

8.4%

2001-03

$21,140.7

<$121.4>

<0.6%>

2003-05

$23,388.5

$2,247.8

10.6%

2005-07

$27,772.0

$4,383.5

18.7%

2007-09

$28,626.6

$854.6

3%

2009-11

$30,070.4

$1,443.8

5%


Source: Washington State Economic and Revenue Forecast Council

It will be very interesting to see what the Governor proposes this Thursday when she releases her budget. Last week WPC sent the Governor our suggestions for budget reform. Here is an excerpt from our letter:

Washington Policy Center would like to offer its assistance in light of the state’s budget outlook. We appreciate your commitment to balance the 2007-09 and 2009-11 budgets without raising new taxes and fees. We share your belief that this is a unique opportunity to rethink what the government does and how it delivers vital services to the public.

Our organization stands ready to help in any way that you find useful to bring about the fundamental budget ref!
orms in which you have expressed interest . . .

To offer constructive suggestions, we have enclosed our “Do not buy list,” which we adapted from your 2009-11 Priorities of Government report, as well as a list of eight reforms that we believe will help put the state on the path toward a sustainable performance-based budget.

To read the full letter click here.

Review of state's 470 boards and commissions

December 10, 2008 in Blog

I'm a little late on this post but last week the Joint Legislative Audit and Review Committee (JLARC) released a pre-audit report reviewing the state's 470 boards and commissions. According to the report: "At the beginning of this project, no single list identified all of Washington’s boards and commissions."

Thanks to the work of JLARC, there is now a good description of each board and commission starting on page 25 of the report. Included are details on when it was created, authorizing statute, costs, and number of meetings.

Another nugget from the report is Appendix 2 - Statute Summary: 

The Legislature has declared that boards and commissions have been:
• Created in excessive numbers;

• Created without legislative review or input and without a!
n assessment of whether there is a resulting duplication of purpose or process;

• Duplicating duties of existing governmental entities, creating additional expense, and obscuring responsibility; and

• Difficult to control in terms of growth because of the many special interests involved.

Accordingly, the Legislature established a process found in Chapter 43.41 RCW to eliminate redundant and obsolete boards and commissions and to restrict the establishment of new boards and commissions (RCW 43.41.220).

The Legislature also finds that the “continued proliferation of both statutory and non-statutory groups of this nature without effective, periodic review of existing groups can result in wasteful duplication of effort, fragmentation of administrative authority, lack of accountability, plus an excessive and frequently hidden financial burden on the state.” (RCW 43.88.500)

Furthermore, the Legislature finds t!
hat a lack of current and reliable information about boards an!
d commissions hinders the effectiveness of legislative oversight and review these entities. Therefore, the Legislature has created a central clearinghouse in the Office of Financial Management (RCW 43.88.500).

It looks like the need for each of the state's 470 boards and commissions should also be part of the current budget savings debate.

State searchable budget website live @ noon tomorrow

December 2, 2008 in Blog

The new searchable budget website authorized by SB 6818
(Promoting transparency in state expenditures) will be launched tomorrow by the Legislative Evaluation and Accountability Program
Committee (LEAP) and the Office of Financial Management (OFM). SB 6818
was based on Washington Policy Center’s (WPC) recommendation for the
state to adopt a searchable budget website. It passed the legislature
unanimously in 2008.

The website is Fiscal.wa.gov (will be live at noon on 12/3).

The
searchable budget website provides an unprecedented level of
interactivity allowing users to create their own budget reports to
compare state spending over time.

This website is a great resource for citizens regardless of the level of their budget expertise. From the green eyeshade policy analyst to the casual observer, users
can create a customized look at how our tax dollars are being spent.

Included on the website are details on:

  • state expenditures by fund or account
  • expenditures by agency, program, and subprogram
  • state revenues by source
  • state expenditures by budget object and subobject
  • state agency workloads, caseloads, and performance measurements.

The
budget website also links to performance information on the Government
Management Accountability and Performance (GMAP) website and OFM’s
website on personal services’ contracts.

To help build on
the success of Fiscal.wa.gov, WPC sent letters to GMAP and OFM
encouraging these agencies to enhance their websites to mirror the
functionality of the new budget website. This effort could also serve
as a template for creation of a tax transparency website. Earlier this
year WPC released a proposal for a ‘Taxation Disclosure Act’ similar to
SB 6818.  

We are hopeful that state officials will
build on the success of the new budget website and also make details on
taxation more transparent to help citizens learn more about what
government decisions mean to their pocketbooks.

If
adopted by state officials, the tax transparency proposal would set up
an online database where users could find their state and local tax
rates (such as property and sales taxes) by entering their zip code,
street address, or by clicking on a map showing individual taxing
district boundaries. An online calculator would let citizens determine
their total tax burden and which officials are responsible for which
parts of it.

Additional Information
Governor signs Washington Policy Center proposal for searchable budget website
Taxation Disclosure Act
GMAP website letter
OFM website letter

No need for $11 in savings for every $1 spent?

December 1, 2008 in Blog

One of the biggest surprises from the recent Priorities of Government report is the recommendation to discontinue the state's performance audit program enacted by the voters in 2005. What makes this proposal so difficult to understand is the fact that according to the State Auditor the ratio of cost savings to audit cost so far has been $11 to $1.

Rather than looking for ways to eliminate a program with these types of returns one would think state officials would instead be fast tracking any audit recommendations yet to be implemented.

an style="font-size: 13px; font-family: Arial;">Here is a sampling of the state's editorial boards on this controversy:

One change worth discussing, however, is to focus the program more on state versus local performance audits. Local performance audits add good value (example Port of Seattle audit). After all taxpayers savings are taxpayer savings whether state or local but the bigger bang for the buck may be realized by digging deeper into state programs and spending.

What shouldn't be on the table, however, is eliminating performance audits. Now more than ever the state needs to be looking at ways to improve the economy, efficiency and effectiveness of every tax dollar spent.

State launches YouTube site

November 24, 2008 in Blog

The Department of Information Services (DIS) last week launched a YouTube site for the state. This is part of the state's effort to "incorporate Web 2.0 functionality that helps us expand our public outreach."

Earlier this year DIS put out a Request For Proposal (RFP) to provide the state with "a web search tool that assists with strengthening the relationship between lawmakers and their constituents by maximizing transparency of the work of government."

This effort is continuing but may run into budget pressures due to the state's fiscal outlook.  

In the meantime the state's new searchable budget website is scheduled to go live next month. I had the opportunity to see a demo of the site and am happy to report it won't disappoint. We're encouraging the Governor's GMAP Office and the Office of Financial Management to enhance their websites to mimic the functionality of the pending searchable budget website. (WPC letters here and here)  

It looks like the Governor has also caught the Web 2.0 bug; her office launched a redesigned website last week. The Governor noted in a press release:

“To be effective and responsive, state government must stay in tune with changing technologies. This new Web site provides opportunities for Washingtonians to easily find the information they need about how the governor’s office works on their behalf and readily provide feedback.”  

The State Auditor's Office is also in the process of redesigning its website and is soliciting suggestions.  

Auditor wants your web suggestions

November 20, 2008 in Blog

Message from the State Auditor's Office:

The Washington State Auditor’s Office is revamping its Web site, www.sao.wa.gov. We are asking citizens, audit clients and interested parties to provide feedback on the usability of our existing Web site and suggestions for our new Web site. The brief survey is available at http://www.surveymonkey.com/s.aspx?sm=4rnLG0uBAXDY8uaa9S11hg_3d_3d and closes at 5 p.m. on Dec. 4. Thank you for your time and assistance in improving the Washington State Auditor’s Web site.

 

Time for a real spending limit

November 20, 2008 in Blog

Though the shock of yesterday's revenue forecast will not soon fade a great opportunity is at hand if lawmakers will rise to the occasion. The unsustainable spending growth of the past is being brought back to reality by the economy. If state officials respond by enacting a meaningful constitutional spending limit next year we may be able to avoid future headlines of multi-billion dollar deficits.

Consider what may have been had I-601, the 1993 voter-approved spending limit, not been eviscerated by lawmakers in 2005. During I-601's heyday (1993-2005), state spending growth averaged just under 8 percent per budget. Assuming an even more liberal 10 percent budget growth since 2005, state spending today would be $1.2 billion lower.

Projected General Fund State spending based on 10 percent growth since 2005
(Dollars in Millions)

Budget

Spending

$ Increase

% Increase

2003-05

$23,671.7

-

-

2005-07

$26,038.9

$2,367.2

10%

2007-09

$28,642.8

$2,603.9

10%

Actual General Fund State spending growth since 2005
(Dollars in Millions)

Budget

Spending

$ Increase

% Increase

2003-05

$23,671.7

-

-

2005-07

$27,766.1

$4,094.4

17.3%

2007-09

$29,838.2

$2,072.1

7.5%

If state officials really want to get off the boom and bust budget roller coaster a meaningful constitutional spending limit modeled after I-601 is the solution.

Revenue down but also up

November 19, 2008 in Blog

Today's headlines will likely read: "State revenue down $1.9 billion." This is the news coming out of the state revenue forecast. What is important to remember, however, is despite this decrease, revenue is still projected to grow by 5% in the next budget cycle and revenues are still expected to be higher in the current budget than the past. This fact is demonstrated in the table below.


General Fund State Revenue Growth
(Dollars in Millions)
 




























































Budget


Revenue


$ Increase


% Increase


1991-93


$14,862.2


-


-


1993-95


$16,564.6


$1,702.4


11.5%


1995-97


$17,637.7


$1,073.1


6.5%


1997-99


$19,620.1


$1,982.4


11.2%


1999-01


$21,262.1


$1,642.0


8.4%


2001-03


$21,140.7


<$121.4>


<0.6%>


2003-05


$23,388.5


$2,247.8


10.6%


2005-07


$27,772.0


$4,383.5


18.7%


2007-09


$28,626.6


$854.6


3%


2009-11


$30,070.4


$1,443.8


5%



Source: Washington State Economic and Revenue Forecast Council


This does not mean the state isn't facing a real problem. The reduced revenue growth for the current budget means that the state is now facing a potential $413 million cash deficit due to the spending levels adopted (not including budget reserve account).


According to the Budget and Accounting Act - RCW 43.88.110(8):

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 . . .

With today's economic news, now is the time for Washingtonians to become actively involved and offer their recommendations to state officials on how to build a sustainable core function focused budget.

SC Governor to DC: Don't bail us out

November 17, 2008 in Blog

In a message few in D.C. thought they'd hear, South Carolina Governor Mark Sanford is telling the federal government NOT to bail out the states. Here is an excerpt from Sanford's Wall Street Journal op-ed:

I find myself in a lonely position. While many states and local governments are lining up for a bailout from Congress, I went to Washington recently to oppose such bailouts. I may be the only governor to do so.


But I suspect I'm not entirely alone, as there are a lot of taxpayers who aren't pleased with Christmas coming early for politicians. And I hope these taxpayers make their voices heard before Democrats load up the next bailout train for states with budget deficits . . .


In 2008 bailouts became the first resort. Over the past year the federal government has committed itself to $2.3 trillion (including the tax rebate "stimulus" checks of last February) to "improve" the economy. I don't see how another $150 billion now will make a difference in a global slowdown. We've already unloaded truckloads of sugar in a vain attempt to sweeten a lake. Tossing in a Twinkie will not make the difference.


However, there is something Congress can do: free states from federal mandates. South Carolina will spend about $425 million next year meeting federal unfunded mandates. The increase in the minimum wage alone will cost the state $2.6 million and meeting Homeland Security's REAL ID requirements will cost $8.9 million.

Meanwhile The Heritage Foundation last week published this report: Why Government Spending Does Not Stimulate Economic Growth


UPDATED: Here is a video of Governor Sanford's testimony before Congress.

Your turn to play Governor

November 14, 2008 in Blog

Governor Gregoire is calling on Washingtonians to send her ideas on how to build the state's next budget: According to the Governor's website:

If you have ideas for budget savings in state government, we want to hear from you. We want to know your opinion on:

  • What government programs should we sacrifice to ensure that we can continue to provide the essentials to the people of our state?

  • What ways can we reform state government to provide services more efficiently and cost-effectively?

  • What government functions and programs might be better handled in the private sector or the nonprofit arena?

Are you up to the challenge? If yes, check out our Policy Guide for Washington State for ideas before sending the Governor your recommendations.

Hat tip: Sam Taylor

2009-11 Priorities of Government Final Report

November 13, 2008 in Blog

The Office of Financial Management has just posted the 2009-11 Priorities of Government (POG) Report. According to OFM:

The following report compiles individual Priorities of Government (POG) Result Team priorities for state activities. These Result Teams of agency, OFM and other executive staff were charged with making choices based solely the activity performance and alignment with evidenced-based strategies for achieving each of the ten statewide results.

This information is advisory to the Governor as she develops her 2009-11 budget for the state.  It does not represent any final budget decisions.

I haven't had a chance to digest the information yet but here is a sampling of the "low" priorities identified:

  • Early Learning Programs
  • National Board for Professional Teaching Standards

  • Student Achievement Fund

  • Rail Passenger Operations

  • Public Transportation - Congestion Mitigation and Transit Efficiency

  • Roadside and Landscape Maintenance

  • Health Insurance - Adults between 100-200% of poverty level

  • SCHIP - Coverage over 200% FPL

  • Convention and Trade Shows

  • Film Office

  • Growth Management

  • Family Medical Leave Program

  • Washington's Lottery

  • Audits of Local Government

  • Motor Pool

  • Management, Accountability and Performance (GMAP)

  • Liquor Control Board

  • Public Printer

  • Performance Audits

For those budget geeks at heart, here are the full details on the POG team recommendations.

Sunshine Committee adopts attorney-client privilege recommendation

November 12, 2008 in Blog

At a very lively meeting of the state's Sunshine Committee today, the members adopted a recommendation concerning public record exemptions for "work product" and "attorney-client privilege." By a 7-3 vote, the members approved the following resolution submitted by Ken Bunting:

BE IT RESOLVED THAT: It is the sense and intent of this committee that the state of applicable law in Washington state, on the attorney-client privilege and the work-product rule as they relate to open government matters, should be essentially what it was before the state Supreme Court’s 2004 Hangartner ruling and its 2007 Soter ruling.

Next step is for the Legislature to weigh in on this contentious issue.  

In other open government news, the 21st Century Right to Know Coalition (WPC is a member) released today its recommendations to President-elect Obama on how to improve federal government transparency. As noted by OMB Watch

As President-elect Obama's transition team gets to work, OMB Watch has teamed with dozens of organizations and individuals to provide key recommendations on government openness, reform of the regulatory process, and government performance issues. Started well before the 2008 elections, the projects that produced these recommendations brought together diverse groups of people to work on some of the most pressing problems and concerns that will face Obama when he takes office in January 2009.

OMB Watch convened a group of hundreds of individuals and organizations from across the political spectrum to put together recommendations on government openness, information, and other transparency issues. The recommendations stress the need for the Obama administration and Congress to move the federal government's information disclosure and sharing policies and processes into the 21st century, which includes the efficient, effective use of modern Internet technologies. The recommendations fall into three categories: National Security and Secrecy; Usability of Information; and Creating a Government Environment for Transparency. The group has also lifted up a number of the recommendations as issues the Obama administration should tackle during its first 100 days.

The recommendations from the report were discussed at a meeting in Baltimore back in September.  Here is a copy of the full report: 21st Century Right to Know Recommendations

Though the report was written for President-elect Obama’s transition team, there are recommendations in Chapters D & E that are applicable for the state.