State union members took to the streets today in Olympia to demand a pay raise. The unions are currently in negotiations with Governor Gregoire on the state's 2009-11 collective bargaining agreement. Oddly enough, The Olympianquotes some of the union members chanting: "Dino Rossi has got to go!"
Last week the unions were encouraging members to "tell the Governor State Employees are hurting and need a fair contract!"
"Resist political pressure from public sector unions Public sector unions occupy a unique position within our governing system. They represent one part of government (public employees) which is organized to lobby another part of government (the legislature).
Employers and unions in the private sector operate under the unyielding discipline of the market. Union leaders know that if their demands cause the company to go under, everybody loses. Government, however, cannot go out of business. There is no natural limit to the demands that public union leaders can make on the treasury, especially since each expansion of government spending generally increases the amount of monthly dues paid to the union.
In the private sector, unions negotiate directly with the owners and managers of a company. If company stockholders are unhappy, they can take their investment elsewhere. In government, the “owners” are the taxpayers. They have no involvement in negotiating with public sector unions, and they also have no choice about paying for whatever conditions, salary or benefits the legislature has agreed to provide.
Public employees should receive fair compensation for the work they do, and it is in the public interest to attract hard working, talented people to public service. But government is about more than providing high paying jobs and generous benefits. If a government program or service no longer makes sense, policymakers who respect taxpayers should end it, and devote the savings to effective programs, or to reducing the tax burden on citizens."
The Yakima Herald has joined with The Everett Herald in endorsing our recommendations to restructure statewide elected policy offices. From Sunday's Yakima Herald (in-part):
"It was a timely coincidence that on the same day Gregoire issued her freeze order, the Washington Policy Center released a policy brief touting the advantages of electing fewer state agency heads. In the place of nine separate elections, the center advocates electing the governor and lieutenant governor as a team and also leaving attorney general, state treasurer and state auditor on the ballot. The rest would become Cabinet positions appointed by the governor.
There are a couple of good arguments advanced for such reorganization. The most visible in this election year is that a cluttered statewide ballot would be shortened in the future.
Take a look at this year's primary election. The gubernatorial election aside, the other eight statewide elected positions on the ballot feature a total of 28 candidates in the Aug. 19 primary. They will be winnowed to 16 for the Nov. 4 general election, but that's still a lot of people to get to know in casting an informed ballot for someone who will head a state agency.
The other advantage of making more of them appointive Cabinet positions, the policy center notes, is that there is actually more accountability when agency heads are changed with election of a new governor."
Here isThe Everett Herald editorial from last week.
Now Walker is taking his message of fiscal reform to a big screen near you. Here is an email he sent last week about this effort:
Some of you have heard me mention our forthcoming feature documentary, "I.O.U.S.A." A few of you may have even had the chance to see an early version of it. The film tells the story of America's large and growing fiscal challenge, how the richest country in the world came to be in the position we are in today, and what could happen to us if we don't do something about it soon. It covers our nation's four key deficits: budget, savings, balance of payments/trade, and worst of all, our leadership deficit.
The film is fact-based, nonpartisan and nonideological, and it features a number of candid appearances, including by Warren Buffett, Alan Greenspan, Paul Volcker, my Foundation's chairman Pete Peterson, Sens. Kent Conrad and Judd Gregg, former Treasury Secretaries Paul O'Neill and Robert Rubin, former CBO chief Alice Rivlin, Rep. Ron Paul, my Fiscal Wake-Up Tour colleague Bob Bixby, and myself.
For one night, August 21, the film will show in about 400 theaters around the country -- with our own special version of a "bonus track!" Immediately following the movie itself, audience members everywhere will be treated to a 45-minute town meeting on the US economy with Buffett, Bill Novelli of AARP, Bill Niskanen of the CATO Institute, Pete and I. We'll be coming to you live by satellite from Omaha. You can find out more about this very special town meeting, submit your own question to the participants, and locate the showing in a theater near you at www.IOUSAtheMovie.com.
Starting on August 22, the film will run in 10 cities for at least one week. Those cities also are listed on the movie's website: www.IOUSAtheMovie.com.
I hope you will take the time -- and take your family and friends! -- to see the film. It's as clear an explanation of the four deficits threatening our economic future as you'll find anywhere. Nothing is more important than educating the public about this looming crisis and building the political will in Washington to enact change.
Anything that you're willing to do to spread the word about the film would be greatly appreciated.
UPDATED (10:32 a.m. 8/11): After consulting with OFM, $356 million has been added to Washington's FY 2007 expenditures.
After scouring through financial reports for all 50 states, it's painfully clear why no one else has attempted to do a side by side comparison of spending increases for each state - it's like trying to compare the DNA of siblings. You'd think they'd be comparable but they aren't even close.
That said, I think I've put together the closest thing possible to an apples to apples comparison of each states' total budget growth (all expenditures). Unfortunately, this means I had to stop with FY 2007 since that is the last year available for state Comprehensive Annual Financial Reports (CAFR).
Using the "Total Primary Government Expenses" line item from each state's FY 2007 CAFR, here is the table I came up with (dollars in thousands):
I called West Virginia to see how they were able to stay essentially flat in spending. The answer: In 2005 they fully privatized their Workers Compensation program.
One of the reasons why the spending increase percentage was so high for Louisiana and Mississippi is related to Hurricane Katrina relief.
A caution for Washington, for 2007 there is a disclaimer that says "health insurance programs is zero starting in 2007 due to fund reclassifications." In 2006, that spending was estimated at $1.2 billion. I’m waiting to hear back from OFM to learn if that spending has been captured elsewhere to see if the comparison with 2003's spending is apples to apples. I'll update the table if necessary.
Judging from the budget outlooks for the states, spending has been outpacing revenue resulting in the current spending deficits being reported.
"Make no mistake; red ink stained the budget long before the economy slowed. In March 2007, the members of the Coalition of Washington Business Organizations (COWBO) wrote to state senators:
' ... the state cannot continue to spend more than it takes in. Increasing spending 15 percent while revenues grow 7.5 percent is not responsible. Coming on the heels of a 2005-2007 budget that increased Near General Fund State spending 13 percent, this budget virtually guarantees substantial shortfalls in the foreseeable future.'"
"The WPC suggests lightening voters' load by reducing the number of statewide elected policy posts to five, and having candidates for governor and lieutenant governor run jointly, just as those who run for president and vice president do. Voters would also still elect the attorney general, treasurer and auditor, "watchdog" offices that should be made nonpartisan, because voters don't expect politics to influence how they're run. (Voters would also still elect judges.)
The other currently elected offices would be appointed by the governor, just as the heads of Cabinet-level offices are now.
Generally, we like the idea. Why, for instance, does it make sense to elect the lands commissioner, but not the secretary of transportation? Why elect a state schools superintendent when key policy issues regarding education are decided in the legislative process?"
Click here to read our full report recommending the changes.
In response to unsustainable budget increases and the then largest tax increase in state history, voters in 1993 adopted Initiative 601 (I-601) to restrict the growth of the budget and place restrictions on tax increases.
Reviewing state spending increases before and after I-601 took effect, it is clear the measure was successful in limiting the size of state spending increases. This is true at least until the law was amended by the legislature in recent years, changing the calculation of the spending limit established by the voters in 1993. The table below shows a 30-year trend in state spending increases.
Here's another way to look at state spending increases since 1980.
Unfortunately, little is left of I-601's original taxpayer protections. In fact, the Senate Majority Leader is currently suing to have the tax restrictions on the books since 1993 thrown out by the State Supreme Court.
Since state officials have shown little desire to leave I-601 in place, it may be time to push for a constitutional amendment to limit the growth of spending to inflation and population growth. Reasonable budget limits similar to those of Initiative 601, but as part of the state constitution, would protect taxpayers and bring greater discipline to public finances. The recent adoption of the constitutional rainy-day amendment could serve as the model for putting I-601 into the constitution.
Back to state spending increases, how does Washington compare nationally? Great question.
In the coming days we'll post a blog comparing Washington's spending increases since 2003 with the rest of the nation to see how we rank.
Just in time for the 2008 Primary we've released a report recommending a change in the number of statewide elected policy offices.
On August 19, 2008, Washingtonians will vote in the state’s first top-two primary election. Not counting local races, voters will be asked to decide which candidates will advance to the November ballot for nine separate statewide offices. These offices are:
1. Governor; 2. Lieutenant Governor; 3. Secretary of State; 4. Treasurer; 5. State Auditor; 6. Attorney General; 7. Superintendent of Public Instruction; 8. Commissioner of Public Lands and; 9. Insurance Commissioner.
Other than the nine elected positions, all other senior officials in the executive branch are appointed by the governor. They make up the governor’s cabinet and include many key positions, many as important as some elected offices.
The Secretary of State, Superintendent of Public Instruction, Commissioner of Public Lands and Insurance Commissioner are policy offices, much like those currently in the governor’s appointed cabinet. Direct election of these offices does not necessarily create greater public accountability, because most Washingtonians don’t know the names of these officials.
The Treasurer, Auditor and Attorney General, however, carry out an oversight role, working to ensure government agencies are following the law. It is because of this distinction that independent election of these offices makes sense.
As “watchdog officials,” it makes sense for the Treasurer, Auditor and Attorney General (if provided enforcement power) to function as nonpartisan offices as is the case for State Supreme Court Justices. In fact, bills have been introduced over the past few years at the request of the State Treasurer to make that office subject to nonpartisan elections.
According to State Auditor Brian Sonntag: “Citizens certainly don’t expect partisanship in an office like this. The work of the State Auditor is about government accountability and transparency, not politics. Our audits are – and should be – independent and fair without even a hint of bias.”
With fewer statewide elected offices, voters would choose the five highest state officials in four elections, as follows:
1. Governor and Lieutenant Governor 2. Attorney General 3. State Treasurer 4. State Auditor
If problems arise with public education, insurance regulation, or management of public lands, voters would know that the solution lies with the governor, who could change the top managers of these policy areas at any time. If the governor fails to use his or her appointment powers to improve the management of these departments, voters could take that failure into account at election time.
Reducing the number of statewide elected offices would shorten the length of the ballot and more importantly, focus public accountability in a way that people can understand and remember. This would increase accountability both during a governor’s term and in election years when voters are assessing candidates for the state’s top offices.
The U.S Government Accountability Office (GAO) released a report yesterday focusing on the federal government's use of performance management. According to the report:
"According to GAO surveys, since 1997 significantly more federal managers report having performance measures for the programs they manage. However, despite having more performance measures available, federal managers’ reported use of performance information in management decision making has not changed significantly, as shown below.
For the collection of performance information to be considered more than meaningless paperwork exercises, it must be useful to and used by federal decision makers at all levels—including Congress. To reach this state, GAO believes that the next administration should promote three key practices that we have identified in our work over the last 10 years:
(1) demonstrate leadership commitment to results-oriented management;
(2) develop a clear 'line of sight' linking individual performance with organizational results; and
(3) build agency capacity to collect and use performance information.
In addition to encouraging agencies to employ these practices, the next administration should: (1) adopt a more strategic and crosscutting approach to overseeing governmentwide performance; (2) improve the relevance of performance information to Congress; and (3) build agency confidence in assessments for use in decision making."
These conclusions are very important for Washington State as well. We've made progress towards focusing on performance results with the adoption of independent performance audit authority for the State Auditor and monitoring agency performance with the GMAP reform. The key now is to put these tools together and to start budgeting based on the performance outcomes identified and holding government accountable to delivering those results.
The Olympian this morning highlights the ongoing problem with forcing state employees to join a private organization as a condition of employment with the state. According to the article:
"The largest state employee union is suing up to 1,900 of the workers it represents for unpaid dues.
'We pursued those folks after many years of trying to persuade them to pay their fair share,' said Tim Welch, spokesman for the Washington Federation of State Employees.
The lawsuits are the latest chapter in an ongoing dispute over mandatory union dues for state workers, which began in 2005 as part of the first contracts to set pay and benefits.
The lawsuits have been filed for months, but a conservative think tank recently found the total number of sued workers listed in the meeting minutes of a federation local.
The union represents about 40,000 state government and college employees. Dues are a percentage of salary, up to $76.50 a month . . .
The union asked the state to fire workers for not paying dues in 2006, turning in a list of 779 potential candidates. Just six workers were terminated before a lawsuit and public protest by the workers prompted the union to drop its demands."
There is nothing wrong with a private organization suing its voluntary members if it so chooses (though it may reduce its membership). The problem with this situation is the fact state workers who don't want to join this private organization are being forced to by their employer in order to keep their job.
As an employer the state should not be forcing individuals to join selected private organizations. However, if such a requirement does exist, the unions should be treated as public entities and be subject to all applicable laws and disclosure requirements. State workers and the public should be fully informed about union activity.
Also, automatic deduction from state worker paychecks should be ended. If government union leaders collected voluntary dues from their members, instead of resorting to mandatory automatic payroll deductions, they would be more responsive to their members’ needs and views. It would also encourage union officials to be more transparent and accountable for how they spend their members’ money.
If we are going to continue the current union/state contract scheme the legislature should reassert its authority over state employment policy to ensure greater accountability and transparency, and it should advance improvements that reduce costs while rewarding the excellent work of state employees. At a minimum state collective bargaining contracts should not be negotiated in secret. Taxpayers are ultimately responsible for funding these agreements. They should be allowed to monitor the negotiation process and to hold state officials accountable for their actions.
Danny Westneat writes a must read column today for elected officials titled "They call this tax restraint?"
"Remember when 2008 dawned? There were murmurings this was the year local government might give us a break from a ceaseless stream of tax ballot measures.
King County Executive Ron Sims, hardly known to suffer from taxophobia, said this year was 'a bad time to put out a tax' and 'there has to be a relief period.' The bad economy means government 'must proceed with caution,' seconded Seattle Mayor Greg Nickels.
City Council members reassured us that they, too, feel the pain of $4.50-a-gallon gas and $5 loaves of bread.
Here's what's coming at you as a result of all this caution and concern:
A $75 million Pike Place Market levy. A $146 million Seattle parks levy. A $17.6 billion, tri-county light-rail package. Roughly $300 a year, in total, for the average Seattleite."
Earlier this month Seattle Times editorial writer Joni Balter wrote an article titled "Do the city council members wear purple crushed velvet, too?"
"Average citizens have changed their behavior in response to the harsh economy, yes, even in Seattle, which is faring better than the rest of the country.
But there is one place where they are still partying like it's 1999 — Seattle City Hall.
Down at Fifth and James, the logic seems to be: Hatch an idea for something we need or want, then don't flinch. Ask voters to raise their property taxes and they probably will . . .
Most elements of the economic slowdown are beyond our control. We cannot slow the increase in price for gasoline and food. We cannot raise our own salaries. The mayor and council could, however, recognize people are having a hard time and take a break from constant piling on of the property tax.
They can, but they won't."
Sam Taylor writing for the Bellingham Herald has also been chronicling efforts in Whatcom County to raise taxes. Details here.
And at the state level the Senate Majority Leader is trying to make it easier to raise taxes by suing to have the taxpayer protections from the 1993 voter-approved I-601 thrown out.
Can't you feel the love for the taxpayer? Or maybe that's the love of your money by government.
The Seattle Timesran a report yesterday titled "How state spending rose $8 billion under Gregoire." The in-depth article provides a nice background on what has happened with the state budget under Governor Gregoire. One thing not discussed, however, is the impact of the voter-enacted tax and spending limit, Initiative 601, adopted in 1993. For example, the article says:
"Gregoire, though, certainly isn't the biggest spender in recent history. The budget grew 36 percent from 1981-84 under Republican Gov. John Spellman. And it soared 45 percent during Democratic Gov. Booth Gardner's second term, from 1989-92."
The context for state spending since 1993 is the fact I-601 has restricted how fast the budget could grow and limited the ability of lawmakers to increase taxes. At least until 2005.
There was a significant drop in the percentage increase in state spending after Initiative 601 took effect during the 1993-95 biennium. Up until the major changes to the law by the legislature and governor in 2005, these percentage increases were relatively stable. After 2005, the rate of spending increase rose sharply.
The other thing about the article worth noting is the selective respect paid by the governor to the will of the voters. Talking about I-728 and I-732 (education spending), the governor is quoted as saying, "I'm not one who disregards the voice of the people."
While a commendable position, the problem with this statement is that to fund I-728 and I-732 the governor and the legislature overrode, using an emergency clause, I-601 and I-402 (estate tax reduction). Further complicating this is the fact that both I-728 and I-732 were advertised to the people as not requiring tax increases.
" Without raising taxes, I-728 lets schools reduce class sizes, expand learning opportunities, increase teacher training, invest in early childhood education, and build classrooms for K-12 and higher education."
"We can afford to invest in our schools and our future without raising taxes or taking money away from other programs. I-728 is funded by lottery proceeds, surplus state revenues and by returning a portion of state property taxes to local school districts."
"I-728 is both necessary and fiscally sound. It invests surplus revenues in education without hurting the state budget."
"I-728 does not raise taxes. I-728 maintains ample reserves and funding for other state services."
"With a $1.1 billion surplus, let's use existing resources for more competitive salaries."
Statements opposing I-728 and I-732:
"I-732 adds no state revenue – it only consumes more of existing resources."
"I-728 would remove $2 billion from the state's general fund over the next six years."
"The governor's budget office projects basic expenditure needs will exceed state revenues in the next biennium. I-728 takes a bad budget outlook and makes it much worse, requiring cuts in services or tax increases to meet basic needs."
What's left of I-601 is now being challenged by the Senate Majority Leader in court.
The Department of Information Services (DIS) put out a Request For Proposal (RFP) on July 14 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 positive development seeks to implement the recommendations we made to the Director of DIS and the Governor's Chief of Staff at an April 23 meeting this year.
In a meeting with DIS last week to review the draft RFP, Director Gary Robinson indicated DIS hopes to re-design the state's web portal (Access Washington) and improve the search functions on state agency websites. The goal is to have this reform done by November.
"DIS is now soliciting Proposals from interested, best-in-class Search Tool vendors to update the tool which supports the Ask George search. DIS is seeking an offering that can improve the success and effectiveness of the Ask George search both on Access Washington and in the individual agency specific tailored searches. DIS is committed to providing a web search tool that assists with strengthening the relationship between lawmakers and their constituents by maximizing transparency of the work of government. The ideal solution is one that enables citizens’ access to government data in a manner that is straightforward and easy to use.
DIS will continue offering Ask George as a service offering to Washington state agencies, boards and commissions, local governments, tribal organizations and qualifying non-profits. Therefore, DIS intends to solicit qualified vendors to provide a licensed search application for a search tool that can quickly initially collect up to 3 million documents, and can easily be segmented into the agency specific tailored searches . . .
DIS is seeking an updated Search tool to provide a toolset to assist in the transparency of government. Search tools can provide assistance to constituents to be able to 'search' government information on web sites. Transparency will improve citizen access to information in government. The search tool function that DIS is seeking to acquire is a tool to assist in providing transparency."
This encouraging development builds on the successful adoption of WPC’s recommendation to create a searchable budget website earlier this year (SB 6818).
Kudos to DIS for moving forward with this effort to improve government transparency!
Earlier this year we pointed out a disagreement between the Governor's budget office (OFM) and the legislative committee tasked with keeping track of state spending (LEAP) on just how much the state is spending. LEAP maintained the state is spending $33.7 billion during the 2007-09 budget. OFM said it was actually $32.5 billion - a $1.2 billion difference.
Based on an article in the Spokesman Review this morning, it looks like OFM and LEAP are in agreement now:
"Spending: The main state two-year budget has risen 31 percent in four years, according to Gregoire's budget office, from $25.6 billion to $33.65 billion."
It looks like the new area of disagreement now centers on just how bad the state's budget outlook is. The nonpartisan staff of the Senate Ways and Means Committee say the state is facing a $2.7 billion spending deficit. While OFM isn't saying what its forecast shows, the Governor believes the Senate Ways and Means Committee is "overin!
flating" its deficit forecast.
Looks like the only way to resolve this new controversy is for OFM to put its numbers on the table.
Jason Mercier is Director of the Center for Government Reform at Washington Policy Center and is based in the Tri-Cities. He serves on the boards of the Washington Coalition for Open Government and CandidateVerification, and was an advisor to the 2002 Washington State Tax Structure Committee. Jason is an ex-officio for the Tri-City Regional Chamber of Commerce. In June 2010, former Governor Gregoire appointed Jason as WPC’s representative on her Fiscal Responsibility and Reform Panel.