Washington Policy Blog

The cost of government is going up this year. During the 2008 Legislative Session, lawmakers proposed over $200 billion in fee and tax increases. Of that, they imposed $768 million in increases over a ten-year period.

State senators proposed 46 bills (including companion bills) that would increase state taxes or fees. The initial versions of these proposals sought to raise $215.4 billion in revenue over a ten-year period. Of these proposals, the legislature adopted five, raising $13 million in fees or taxes.

State representatives proposed 36 bills (including companion bills) that initially sought to raise $98.8 billion in fees or taxes over a ten-year period. The legislature ultimately adopted nine of these bills, raising $755 million in fees or taxes. In total the legislature enacted 14 bills raising fees and taxes by $768 million over a ten-year period.

For a list of the tax and fee increases proposed and enacted in 2008, click here.

Carl Gipson noted below that, in response to higher gas prices, drivers are purchasing smaller cars and manufacturers are building more efficient cars. In the medium- and long-term, this will increase efficiency, driving down demand.

In the short-term, drivers are also responding by finding ways to conserve. The chart to the right compares the number of gallons sold in Washington for January, February and March for each of the last three years. In every case the number of gallons sold is lower in 2008 than in 2006.

In January 2006, a gallon of gas cost $2.25. In January 2008 the cost had risen to $3.13 a gallon. The total number of gallons sold fell by 1.5%. Note that this is not the per capita usage, but total gallons sold. So, the reduction occurred even as the number of drivers in Washington increased.

The same trends are evident for February and March. The cost of a gallon of gas rose 85 cents from February 2006 to February 2008 and total demand fell 1 percent. For March, the cost rose by $1.03 and demand fell 2.2 percent.

The simple lesson is that people, responding to prices, are finding big and small ways to conserve and become more efficient. They do this more effectively than government because only they know what is possible and the easiest ways to conserve. Economics is often described as the system of allocating scarce resources. Environmentalism is borne of a concern about scarce resources. The response of drivers to increasing scarcity of oil, reflected in prices, shows how effective this system is.

This is not an argument for $5 gas. Prices should be set by the supply and demand for scarce resources, not by think tank wonks or politicians. Millions of people, responding to market signals and incentives, make decisions that reduce fuel use and associated carbon emissions. It is a system that not only preserves individual freedom and choice, but does so in a way that promotes prosperity and environmental stewardship.

Lest you think that the people are sovereign and that government is instituted to serve the people, Mayor Nickels is here to set you straight.

In announcing his effort to get people out of their cars, the Mayor announced today that "Seattleites are aware of the perils of climate pollution, and they want to do their part."

Not enough apparently.

Since Seattleites aren't doing their part enough, even though they want to, the Mayor announced today that he will be closing some roads this summer for use by bikes and pedestrians only, to increase gridlock on remaining roads and the pain of driving your car.

People of Seattle...get with it! You are getting in the way of the Mayor's agenda.

We've been sounding the alarm (along with others) about the serious spending problems facing the nation and the lack of attention our elected officials are paying to this growing fiscal disaster. Now come projections out of the Congressional Budget Office (CBO) on what further delay means to taxpayers and the economy. The following is from a CBO letter dated yesterday to Rep. Paul Ryan (R-WI):

"Under current law, rising costs for health care and the aging of the population will cause federal spending on Medicare, Medicaid, and Social Security to rise substantially as a share of the economy. If tax revenues as a share of gross domestic product (GDP) remain at current levels, that additional spending will eventually cause future budget deficits to become unsustainable. To prevent those deficits from growing to levels that could impose substantial costs o!
n the economy, the choices are limited: Revenues must rise as a share of GDP, projected spending must fall, or both."

Let's assume that tax increases are the preferred solution for the powers that be to resolve this self-inflicted spending problem. How large of a tax increase are we talking about? 

"With no economic feedbacks taken into account and under an assumption that raising marginal tax rates was the only mechanism used to balance the budget, tax rates would have to more than double. The tax rate for the lowest tax bracket would have to be increased from 10 percent to 25 percent; the tax rate on incomes in the current 25 percent bracket would have to be increased to 63 percent; and the tax rate of the highest bracket would have to be raised from 35 percent to 88 percent. The top corporate income tax rate would also increase from 35 percent to 88 percent. Such ta!
x rates would significantly reduce economic activity and would!
create serious problems with tax avoidance and tax evasion. Revenues would probably fall significantly short of the amount needed to finance the growth of spending; therefore, tax rates at such levels would probably not be economically feasible . . .

The United States faces serious long-run budgetary challenges. If action is not taken to curb the projected growth of budget deficits in coming decades, the economy will eventually suffer serious damage. The issue facing policymakers is not whether to address rising deficits, but when and how to address them. At some point, policymakers will have to increase taxes, reduce spending, or both. Much of the pressure on the budget stems from the fast growth of federal costs on health care. So constraining that growth seems a key component of reducing deficits over the next several decades. A variety of evidence suggests that opportunities exist to constrain health care costs both in the public programs and in the health care system overall without adverse health consequences, although capturing those opportunities involves many challenges."

So what do the current presidential candidates plan to do about this? As noted by former U.S. Comptroller!
General David M. Walker, they aren't saying. Voters should demand an answer before it is too late. 

The State Auditor today officially released a performance audit on government compliance with the Public Records Act. So what does public records compliance have to do with government spending and efficiency? Consider some of the recent taxpayer payouts for government violations of the law:

"In recent years, court cases in which state agencies and local governments have been assessed fines and penalties have been specifically related to the entities’ improperly withholding public records and/or delaying release of the records. We did not identify litigation that was based on entities’ practices other than improper denials or excessive delays. In addition to penalties, attorneys’ fees, and costs awarded by the court, the entity also bears it own legal costs of the litigation. Accordingly, minor court awards can be expensive if the legal costs associated with the !
litigation are considered as well. Examples of recent lawsuits include:

• The Department of Corrections settled a lawsuit for $65,000 in late 2007. A Tacoma man made public records requests at 10 government agencies for information about employee health insurance coverage. The Department said it could not electronically redact the requested records and offered to provide paper copies at a cost of $8,900. A Thurston County judge ruled in this case that the Public Records Act does not require agencies to provide records in an electronic format. However, the agency ultimately provided the records electronically to the requestor.

• The Department of Corrections settled another public records lawsuit earlier in 2007 for $541,000. Prison Legal News, a watchdog newspaper, requested records in 2000 and disagreed with DOC regarding the documents withheld and the time it took to provide the records requested. The Thurston Co!
unty Superior Court order supported the position of the Depart!
ment and, on appeal, that decision was supported by the Washington Court of Appeals. After a favorable decision from the two lower courts, the Supreme Court reversed their decisions and ordered the documents to be released. DOC was ordered to pay statutory penalties, attorney fees and costs incurred over the 7 years it took for the case to pass through the appellate process. The case involved issues over exemptions in the Public Records Act.

• In 2006, the City of Spokane settled a case for $299,000 involving its refusal to release public records regarding financing of a parking garage. At the time, it was thought to be the largest public records-related settlement in the history of the 1972 Public Records Act.

• A state Court of Appeals judge in 2007 fined the King County Executive $123,000 for failing to comply with the state’s Public Disclosure Act. A Seattle businessman took a case to court in 2000 after the !
Executive’s office failed to respond to a 1997 public records request for documents regarding the public financing of Qwest Field. A King County Superior Court judge originally fined the Executive $5 per day for each day it failed to produce the requested records. The Act allows up to $100 per day. The case was still being resolved at the time of the audit.

In addition to the financial expense of being involved in a legal dispute involving public records, failing to respond properly to public records requests can erode the public’s overall trust and regard for the entity and government in general."

To view the full audit and recommendations for improvements, click here.

Tomorrow, presidential candidate Sen. John McCain will be in Seattle to discuss his cap-and-trade proposal to reduce greenhouse gases and fight climate change. Some, however, aren't happy and will be protesting.

The State Democratic Party will be attacking McCain's effort to "boost his faux 'maverick bona fides,'." (By the way, the letters from "faux maverick bona fides" can be rearranged to spell "Scuba Rove Affixed A Mink" which can only be some secret code.) How they will be doing it, however, is interesting.

According to the Tacoma News Tribune, "The plan is to hire an airplane that will carry a special message to Republican John McCain, and everybody else who is paying attention." Maybe the banner will say "McCain: Faux Maverick Bona Fides."

So the way they are going to attack John McCain for his climate change plan is to hire an airplane to fly around in circles burning fuel. If that doesn't demonstrate a contrast, I don't know what does.