Washington Policy Blog

A Whale of a tale, or two.

April 21, 2010 in Blog

An article from this morning’s Seattle Times highlights efforts being made by King County to encourage the recycling of plastic bags.  The efforts by the County include at least one local school having a contest to see which grade could collect the most bags.  The winning grade collected more than 12,000 bags to earn a pizza party. 

However, the article quotes one of the winning third graders as saying if you don’t recycle, “it all goes in the water and hurts animals.”

Certainly it is an honorable goal to recycle.  In fact, we have previously highlighted this policy recommendation for policymakers as an alternative policy approach to a bag tax or outright ban.

But obviously the quoted third grader has been misinformed about the magnitude of the impact that trash, like plastic bags, has on the environment.  Such misinformation can come from many sources. 

Take for instance the recent news reports concerning the stomach contents of a gray whale that washed ashore in the Seattle area.  Having never personally seen, nor do I care too, the stomach contents of a whale I was a bit surprised to hear what was found.

One report includes the following headline found in the Seattle Times, which reads, “Beached whale’s stomach found to be full of fresh trash.”  No other clarification is offered in the Times article to clarify what is meant by the claim that the stomach was “full of fresh trash.”  (Note – It was noted in the comment section of today’s article that the Times ran an Associated Press story yesterday that cited the 2 percent number, but they opted to deleted or omit this fact when penning today’s article and headline.)

However, another report from The Olympian tells a different story regarding the trash found in the whale.  The article states:

“The 37-foot-long whale had more than 50 gallons of undigested stomach contents, including more than 20 plastic bags, small towels, surgical gloves, sweatpants, duct tape, pieces of plastic and a golf ball….The debris, while abundant, represented about 1 percent to 2 percent of the stomach contents, which consisted mostly of algae….There is no sign that it caused the whale’s death.”

Any amount of trash found in the stomach contents of an animal is alarming, but 2 percent hardly equates to “full of fresh trash.”

While the misinformed third grader probably didn’t get her information from the misleading Times headline, it should serve as an example of how important it is to provide complete information when reporting the news.

Are Washington's Environmental Policies Helping Or Hurting?

April 21, 2010 in Blog

During the past five years, environmental policy has become one of the centerpieces of every political campaign and is highlighted regularly by elected officials. For the past five years (excluding 2010) the Washington Conservation Voters have chosen their list of "Environmental Priorities" and the Senate Majority has a web page specifically touting their successes during the past five years.

Once the legislation is passed, however, few go back to see if the policies actually achieve the promised results.WPCEnviroScorecard

During the past five years, the legislature has enacted more than two dozen environmental policies ranging from climate change, to clean water and banning flame-retardant compounds. While these policies receive significant attention while being considered by the legislature, few of them are later audited to determine if they are achieving the intended results.

For Earth Day 2010, we have examined the environmental policies passed by the legislature and governor during the past five years to determine when they have succeeded and when they have failed. The results are mixed, but in too many cases the programs are off track and the policies have either already failed or are likely to fall short. Considered together, these environmental policies are likely to do more damage to the environment than good.

You can read the whole report here: Five Years of Environmental Policy: Are We Making A Difference?

Will Earth Day be More Successful than Earth Hour?

April 21, 2010 in Blog

For the fourth year in a row, WWF sponsored Earth Hour, an effort to get people around the world to turn off their lights to symbolically demonstrate the need to use less energy to fight climate change. While the effort is considered symbolic, there are numerous claims that the effort actually saves significant amounts of energy.

For instance, on the Earth Hour Wikipedia page, it is claimed that "Vietnam electricity demand fell 500,000 kWh during Earth Hour 2010," and "The Philippines was able to save 611 MWh of electricity during the time period, and is said to be equivalent to shutting down a dozen coal-fired power plants for an hour," and "Toronto saved 900 megawatt-hours of electricity. 8.7% was saved if measured against a typical March Saturday night."

We examined energy use in Washington state related to Earth Hour to see if these trends were repeated here. We looked at electricity data from various parts of the state and found that energy use actually increased during Earth Hour compared to similar Saturdays and to the Friday and Sunday surrounding the event.

For instance, when looking at energy use during the recent Earth Hour weekend, we found that energy went up on all three days during the 8 p.m. hour, fell during the 9 p.m. hour on Friday and Sunday, but not on the Earth Hour Saturday. Here is the data on the change in energy from 8 p.m., before Earth Hour, and 9 p.m., the middle of Earth Hour (energy data is available by hours, so the actual data covering 8:30-9:30 p.m. is not available):

Date Change in Usage
Friday, March 26 -1%
Saturday March 27 (Earth Hour) 1.20%
Sunday, March 28 -1.90%

The other issue is whether energy use on every Saturday goes up during that hour when compared to typical Fridays and Sundays. So we also looked at the Saturdays before and after Earth Day. This data covers a separate part of the state, so it doesn't match perfectly. It is very similar, however, indicating that results across the state are alike. Here are the results:

Date Change in Usage
Saturday, March 20 0.45%
Saturday, March 27 (Earth Hour) 3.13%
Saturday, April 3 1.98%

So, we do use energy later on Saturday than on Friday or Sunday, but the increase in energy use in Washington went up more on the Earth Hour Saturday than either Saturday before or after.

This is more evidence that environmentalism has become as much about symbolism as about sustainability. People feel good that they are making a difference without actually making a difference.

North Thurston School District may be violating civil rights of students hoping to go to Aspire Middle School

April 20, 2010 in Blog

The Olympian reports today that the North Thurston School District is denying students placement in the new Aspire Middle School on the basis of race.  This appears to be a violation of their civil rights under RCW 49.60.400, which states:

 1) The state (which includes school districts) shall not discriminate against, or grant preferential treatment to, any individual or group on the basis of race....

Details on when tax increases take effect

April 20, 2010 in Blog

The Department of Revenue has created a website with details on all the tax increases that passed this year. Here is DOR's press release:

Several tax changes will take effect as early as May 1, assuming Governor Chris Gregoire signs into law a tax package sent to her by the Legislature.

2ESSB 6143 temporarily increases the business and occupation tax rate on services beginning May 1.  Another bill, ESHB 2493, increases cigarette and most other tobacco taxes May 1.

The legislation also extends the sales tax to candy and bottled water beginning June 1, increases the beer tax starting June 1, and imposes a carbonated beverage tax effective July 1.  All the tax changes expire on July 1, 2013, except the ones on candy and tobacco products.

While the tax changes are contingent on the governor’s action, the Department of Revenu!
e is notifying businesses ahead of time so they can prepare for them.  Detailed information on each tax measure is being posted at http://dor.wa.gov.

The service tax increase to 1.8 percent of gross income from 1.5 percent affects all service businesses except hospitals and scientific research and development activities.  The “services and other business activities” classification includes businesses such as attorneys, architects, engineers, physicians and private investigators. 

The measure includes a permanent doubling to $70 a month of the small business B&O tax credit that will allow services to gross up to about $80,000 annually without incurring any additional B&O tax liability, and in some cases paying lower taxes.  About 74,000 service businesses out of a total of 137,000 companies will benefit from the increase in the credit.

2ESSB 6143 also temporarily suspends a sales tax exemption affecting livestock nutrien!
t management, repeals a property management salary exemption, !
limits the bad debt deduction on retail sales, requires corporate boards of directors to pay tax on their fees, directs the Department to deny abusive tax avoidance schemes, addresses several court decisions affecting taxation, and sets minimum nexus standards affecting out-of -state companies doing business in Washington.

The Governor is scheduled to sign several tax bills Friday at 1:30 p.m.

Government reform commission in budget

April 20, 2010 in Blog

Not possessing the speed reading skills of our lawmakers who managed to read and digest the 344 page budget within hours before voting, I am slowly making progress reading each line of the budget bill.

There are many interesting things we'll highlight in the coming weeks but one that warrants special attention is the creation of a government reform commission. Check out Section 717 of SB 6444:

Budget snapshot

April 19, 2010 in Blog

Now that lawmakers have finally adopted a 2010 supplemental budget, is state spending going up or down?

Yes.

Near General Fund spending is decreasing while total spending is increasing.

Here are details on Near General Fund spending, total spending, and Full-Time Equivalent (FTE) employees (click image to enlarge):

Budget snapshot
Here are additional details by biennium.

Many thanks to the staff at the Legislative Evaluation and Accountability Program (LEAP) Committee for providing these details. 

For additional budget information visit fiscal.wa.gov.

Is outsourcing "anti-government?"

April 16, 2010 in Blog

Many lawmakers have started blogs to keep their constituents informed on the issues of the day. One of the more policy focused blogs is Rep. Reuven Carlyle's (D-36). Rep. Carlyle has taken heat from his party's traditional allies for using his experience as a small business owner to advocate for usually taboo policies such as competitive contracting and privatization.

Responding to this criticism, Rep. Carlyle posted this blog entry yesterday: "Is there a progressive approach to privatization?"

The full post is worth reading. Here is a snap shot of the discussion:

"But some of the deeper, more holistic and thoughtful questions at the state level follow these lines: What is the highest value role for state employees regarding service delivery? When is the profit motive (ie outsourcing or privatizing a s!
ervice) a violation of the state’s fiduciary moral obligation to citizens? When can harm come from letting oversight of service delivery take second place to cost? Can we stop paying such a high price for low cost services? Do state employee-based services that may still be commodities add intangible value that should be captured? (such as jobs!)

The philosophical and policy foundation of my policy position is that as a general statement state government should not be in the business of delivering most commodity services. For example, the state purchases billions of dollars worth of concrete, steel, wood and other commodities for construction. Yet it would make absolutely no sense for the state to be in the concrete, steel or wood business. It’s just not a core competency. Cruise ships purchase more steaks than anyone else in the world, but they don’t go into the slaughter and meatpacking businesses . . .

Can state employees perform a service for less!
cost since they don’t have the profit motive and don’t ne!
ed to constantly deliver marginal savings? Yes. But can the marketplace improve quality and lower costs due to the insatiable need for innovation? Yes.

The larger systems challenge, of course, is to get the lower price along with the quality innovation. Never easy to do. But the bottom line is that when it comes to back-end, commodity services where efficiency really matters to reduce marginal costs the marketplace of the private sector is–in my view–going to be more successful than government.

In many ways my philosophical grounding in using the private sector more forcefully for back-end commodity services is driven by a belief that I want state employees overseeing the safety of foster youth and other fiduciary obligations where a profit motive is of no meaningful value to society. I want to use those tax dollars not to pay for back-end, commodity services like hosting servers but to send students to colleges, support foster youth, improve our s!
chools and much more.

The great challenge of leading our state is to find ways to get the best of both worlds: The fiduciary oversight of dedicated public employees doing high value people-oriented work along with the innovation and cost controls of the marketplace."

Well said.

With the state once again facing a multi-billion dollar deficit in the next budget, fundamental reforms are needed. This includes the utilization of competitive contracting and privatization of commercial activities. 

State Workers' Comp Supplemental Pension Fund Bailed Out

April 16, 2010 in Blog

The Department of Labor and Industries this month announced that one of the funds that comprise our state's workers' comp system required a short-term loan in order to mete out its statutorily-required benefits to pensioners. L&I needs to borrow $15 million from the $3.2 billion Pension Fund. The Department says it will fully repay the loan within 45 days and with interest. 

However, according to a document issued by L&I, another rate increase to employers is possible in the near future; even if they acknowledge that rate increases have damaging effects:

"Q: Is there an alternative to an inter-fund transfer?
A: A mid-year SPF rate increase would have been another way to deal with this shortfall. But this could have a detrimental effect on businesse!
s and workers who pay this insurance premium
." (emphasis added)

Why did this fund dry up? According to the Department it had to do with the substantial decrease in hours worked by employees -- a 6.4% decrease from Q3 2008 to Q3 2009. Since part of the workers' comp premiums are based on the number of hours worked, and because Washington lost well over 100,000 private-sector jobs, the fund took a hit.

But that's not all. 

"Q: Did L&I raise premiums in the Supplemental Pension Fund in 2010?
A: The SPF premium rate was increased 16% in 2010, based on projected work hours and liabilities. This increase will help maintain the balance as money comes into the fund and is paid out. However, we expect to see other quarterly shortfalls in the SPF this year and in the first quarter of 2011 due to the depleted asset balance, depending on when reported h!
ours begin to increase as the state comes out of the recession!
." (emphasis added)

It is apparent that L&I is facing financial challenges, as are many state agencies. And while some will say the national economy is the cause of the fiscal problems, I would argue that the recession is actually showing the structural deficiencies in the system. Policymakers should use this crisis as an opportunity to reform the system so that the small business community will not have to fear mid-year rate increases or large future rate increases during tough economic times. 

But unfortunately, nothing was done to improve the system during the recently-concluded legislative session and so the business co!
mmunity is left to wonder, again, if another large rate increase is heading their way.

Update: Erik Smith over at Washington State Wire has a good run down on the situation from both labor and business perspectives.  

Workers' Comp fight for the ballot officially underway

April 15, 2010 in Blog

The Building Industry Association of Washington announced yesterday intentions to break up the state's monopoly of the workers comp system. The goal, according to BIAW, is to bring Washington in line with 46 other states that allow competition from private insurers in the industrial insurance market. 

In the wake of the 7.6% rate increase for 2010, the news that one of the big Workers' Comp funds stands a decent chance of becoming insolvent in the next few years, and the fact that Workers' Comp rates should have actually gone up almost 20% in order to actually p!
ay for its liabilities, BIAW will probably have some momentum behind its effort -- not to mention the fact that absolutely no reforms were even entertained during this last legislative session. 

The labor unions will come out hard and fast against this initiative, so expect a battle royale this fall.

Some background reading on Workers' Comp in Washington state:

NHTS: more people walk to work than use public transit

April 15, 2010 in Blog

The Federal Highway Administration has released its 2009 National Household Travel Survey. There is a lot of data here and the format is challenging to navigate.

I spent some time looking at person trips by mode and purpose. Specifically, mode share to work. 

Mode share

88.3% of all commute trips take place with a car or truck, while only 3.7% use transit. In fact, there are more people who walk to work than take transit. The Puget Sound region has about the same mode split, which is madness when you consider:

It is no wonder Seattle is the most congested city in America.  

Legislature Finds $15 Million For Political Poster Child While Environmental Projects Go Unfunded

April 14, 2010 in Blog

Today's Seattle Times reportsthat the state set aside $15 million from the Asarco settlement to help buy a gravel mine on Maury Island that has been a poster child for Seattle environmental activists. During the past few years, environmental activists have spent huge sums of money suing to stop the creation of a dock to move the gravel off the island. Both Lands Commissioner Peter Goldmark and King County Executive Dow Constantine made the issue a centerpiece of their campaigns, promising island residents that they would stop the project.

Politicians and environmental activists claim the dock is environmentally damaging. There's only one problem -- the scientists at the Puget Sound Partnership don't rank this project as a priority.

In their priority list for the South Central Area, the scientists at the Puget Sound Partnershp (PSP) do not mention the dock. Despite that, the state found $15 million to prevent it from being used. By way of comparison, $15 million is larger than the annual protection and restoration budgets for:

  • DOE - Local Gov't Stormwater Grants - $14
  • Washington Wildlife and Recreation Grants (WWRP) - $11
  • DOE – other direct spending - $11
  • Department of Fish and Wildlife (DFW) - $10
  • Puget Sound Partnership (PSP) - $9
  • Public Works Assistance Account (PWAA) - $5
  • Department of Natural Resources (DNR) - $4
  • State Parks - $3
  • Salmon Recovery Funding Board (SRFB) - $3
  • Conservation Commission - $2
  • Aquatic Lands Enhancement Account (ALEA) - $2

While the Maury Island dock is not a priority concern, the PSP does, however, list Quartermaster Harbor, on the other side of Maury Island, sandwiched between Vashon and Maury Islands. Quartermaster Harbor, which is part of a state aquatic reserve, is recognized as one of the most polluted places in the Sound. The Vashon/Maury Island Beachcomber reports that "Research five years ago showed that Quartermaster Harbor hosts the highest concentration in all of Puget Sound of an alga that causes paralytic shellfish poisoning."

The problem is that septic tanks surrounding the Harbor are failing, polluting the harbor. So, what has been done about this problem?

Despite working for years, there has no progress fixing the problem of septic tank failure. Last September the Beachcomber reported "After two years of effort, King County officials have made little headway in a far-reaching attempt to get homeowners along the western shore of outer Quartermaster Harbor to address failing septic systems that are fouling the wildlife-rich bay."

The County doesn't deserve all of the blame, the homeowners are not cooperating and politicians are not anxious to put pressure on voters and donors who helped them during the last campaign. This is a major reason that so much focus has been put on the gravel dock rather than a more significant environmental concern a couple miles away.

The final irony is that while $15 million has been lavished on a non-problem, a group looking to help clean Quartermaster Harbor is begging for volunteers. The Beachcomber reports that "The Puget Sound Restoration Fund, a small, highly regarded nonprofit that is undertaking the mussel research, wants volunteers. Islanders can help them collect native mussels to attach to the raft or even help build the raft."

For more information on how to help the Fund, visit www.restorationfund.org.

Not so fast on Fed plan to treat bicycles the same as auto use

April 14, 2010 in Blog

From the Washington Post:

WASHINGTON -- Transportation Secretary Ray Lahood,
a weekend bicyclist, might consider keeping his head down and his
helmet on. A backlash is brewing over his new bicycling policy.

LaHood says the government is going to give bicycling - and walking,
too - the same importance as automobiles in transportation planning and
the selection of projects for federal money. The former Republican
congressman quietly announced the "sea change" in transportation policy
last month.

"This is the end of favoring motorized transportation at the expense of non-motorized," he wrote in his government blog.

Not so fast, say some conservatives and industries dependent on
trucking. A manufacturers' blog called the policy "nonsensical." One
congressman suggested LaHood was on drugs.

Deficit déjà vu

April 14, 2010 in Blog

At her press conference yesterday Governor Gregoire was asked about the projected deficit for the 2011-13 budget. The Governor said they don't know yet what impact the budget and taxes adopted by the Legislature this weekend will have on the next budget but that another deficit is likely. Here is her exchange with reporters on this topic:

The Governor also said that future tax increases for education spending are likely, though they will probably show up as a ballot measure for the voters to approve.

As for the Back to the Future budget deficit, in February the Office of Financial Management produced this 4-year budget outlook showing a projected $2.1 billion deficit in 2011-13 assuming the Governor's smaller spending and tax package:

Budget outlook

Since the Legislature's plan spends and taxes more than the Governor proposed, OFM may update the February 4-year budget outlook in the coming weeks to get a better feel for the pending 2011-13 deficit. 

It will be interesting to see what reforms or tax increases will be proposed to solve that problem. It's unfortunate the Legislature used a full 30-day special session to enact a budget but failed to adopt policies to make it sustainable.

Sen. Brown vs. Sen. Brown

April 13, 2010 in Blog

A lot of strange things can happen when working until 1 a.m. in the morning, including the instance of arguing with yourself.

Consider the following sides of the debate Sen. Brown found herself on last night concerning whether a tax increase is permanent or temporary.

First was her floor speech on HB 2561 arguing that an amendment to describe the sales tax on bottled water as being "permanent" was misleading since there is no such thing as a permanent tax.

Then later in the evening was her floor speech on SB 6143 arguing that the job credits being passed were "permanent" but the tax increases "temporary."

In the same evening Sen. Brown argued that a change in tax policy is "permanent" when it is a tax credit but "temporary" when a tax increase.