. . . I'd put money on the State Supreme Court dismissing Senator Lisa Brown's tax lawsuit on procedural grounds. At today's Court hearing on the constitutionality of I-601, the Justices spent most of their time questioning whether the way Brown filed her lawsuit is something they can rule on. In particular, Justice Barbara Madsen expressed concern with the Senator's attempt to have the Court inject itself in the legislative process of passing a bill.
If the Court does ultimately pass on deciding the constitutionality of a 2/3 vote requirement for tax increases, the clearest way to resolve this issue once and for all is for the Legislature to put on the ballot a constitutional amendment and allow the voters to decide.
While reviewing state personal service contracts back in July, a $50,000 lobbying contract for the University of Washington (UW) caught my attention. Unfortunately, the information listed on the Office of Financial Management's website didn't disclose what the lobbying was for so I asked the UW for a copy of the contract. Nearly two months from my first request, I finally received a copy of the contract today.
Turns out the $50,000 contract is for a consultant "to provide legislative drafting and fiscal analysis related to the 2008 request for state financial assistance to remodel Husky stadium." The contract was originally to expire March 31, 2008, but its terms have been extended until June 30, 2009.
The contract further notes the "consultant will be paid $175 per hour for his services, and receive reimbursement for associated reasonable expenses, including travel costs."
The Washington Times earlier this week published an insightful op-ed by Terry Neese of the National Center for Policy Analysis on the need for labor law reform. Specifically, she is advocating for laws that allow private sector companies to explore more options regarding "comp time" for employees.
There is no question that many workers today feel pinched by rising commodity prices, an economy that is growing slower than we would like, and the pressure to do more with fewer resources. This is often what happens in a down market. But Neese points out that one thing private-sector employers can do to help is to look to the federal government, which is making inroads to allow employee flexibility and alternatives to the 40-hour workweek -- especially for working parents or those caring for their elderly parents.
She says that,
"According to a recent survey by Money Magazine and Salary.com, stressed workers aren't the most productive workers...Workers who expressed satisfaction at work had substantially better conditions across the board, with easier unscheduled time off, flexibility and better telecommuting options."
One of the key worries from employers, however, is that workers are more prone to kick back and relax while at home instead of working. But the opposite is true, according to the survey. Mostly, because satisfied workers put in a lot more hours than others.
Our state government and private sector employers would do well to explore such options for their employees as well. I believe that the more employers take on the task of meeting employee needs while increasing productivity, the less likely we are to see ridiculously obtuse laws like our paid family leave bill (long term funding still pending).
Some people might be wondering how changes in teacher salaries affect the monthly union dues they must pay. It works like this: union officials set the amount of dues and notify school payroll administrators. Administrators subtract the dues from teachers' take-home pay and transfer it to a designated bank account. This year union officials set the rate at $78 per teacher per month, a 2.2% increase compared to last year. This figure includes payments to union officials at the national, state and local level.
Once the strike is over, if officials increase monthly dues at the same 14.1% rate as the pay increase they are requesting from the district, union officials would receive an additional $12,362 a month, or $445,032 more over the life of the three-year contract. Total teachers' union dues paid over three years would be $3.6 million.
On September 9, 2008, the State Supreme Court will consider Senate Majority Leader Lisa Brown's lawsuit seeking to have the 2/3 vote requirement for tax increases ruled unconstitutional to make it easier for state officials to raise taxes.
Last week I asked spokespeople for both Governor Gregoire and Senator Rossi if they support a 2/3 vote requirement for tax increases and if yes, would they support placing them in the Constitution like was done with the rainy day reserve from I-601.
Here are the official responses:
Gregoire* - “I think it’s a moot issue because I think it [tax increases] ought to go to a vote of the people.”
Rossi spokesperson - "Dino believes in upholding the will of the people and does support I-601’s 2/3 vote requirement. He would be supportive of a constitutional amendment to require a 2/3 vote for tax increases."
Based on these responses, it appears that both Governor Gregoire and Senator Rossi support WPC's recommendation to amend the Constitution to require either a 2/3 vote of the legislature or voter approval for tax increases.
*These comments were made on 8/27 during a KIRO 710 radio interview. On 8/29 a spokesperson for Gregoire said to refer to this interview in response to my question for an official position.
Bearing signs saying “No Contract? No School!" officials at Bellevue union officials have led teachers on strike, closing classrooms to 16,000 area students.
Part of the union dispute is over teacher pay.But in Bellevue money is not a problem.This year taxpayers are generously providing Bellevue school administrators with $164 million, or about $10,000 per student, to educate children.A typical classroom of 25 students, for example, receives $250,000 in funding.Obviously, much of this money never makes it to the classroom.
One drain on District resources are mandatory union dues.The union security clause requires teachers, within 30 days of hire, to join a designated union as a condition of employment. Any teacher who does not agree to monthly deductions faces termination.
The monthly dues transfer is a major item in school district budgets.For April 2008, Bellevue school officials transferred $111,600 to five union bank accounts.That number breaks down as follows.
Bellevue Education Association (the teachers’ union) $87,677
International Association of Machinists and Aeros …..430
International Union of Operating Engineers…………..4,413
Maintenance Employees Association ………………..130
Service Employees International Union …………… 18,946
Total monthly dues transferred ……………………$111,596
In the 2006-07 school year, Bellevue officials transferred a total of $933,880 in monthly dues to unions.
Considering the importance of the work society is asking them to do, school teachers should be paid a lot more.If most education funding actually reached the classroom, Bellevue could pay its teachers on average $100,000 per nine-month academic year, and still have $125,000 per classroom available for all other operating expenses.
Instead, school districts should adopt a system in which principals are allowed to hire teachers and pay much higher salaries.A commonsense salary policy would end disruptive labor disputes, maintain classroom access for children, attract top talent to teaching and, finally, actually pay school teachers what they deserve.
"After much thought and in light of our nation's economic struggles, I have decided the cost of living raise, which you were scheduled to receive on September 1, 2008, is not appropriate at this time. My decision affects all agency directors under my control in addition to the Senior Staff of the Governor's Office . . . I take this step because I believe you and I should make a clear statement to the people of Washington: we understand that many families are not rece!
iving pay raises while coping with high food and fuel prices, and other financial challenges."
So what "statement" are Bellevue teachers sending taxpayers and students by breaking the law?
On Crosscut, David Brewster questioned whether Sound Transit's first phase, which won voter approval in 1996, is one of the "word's biggest boondoggles?" He compares the agency's initial promises to voters with the fact they are now billions of dollars over budget and many years late.
While Sound Transit's troubles are well documented, the philosophy that led to the agency's woes is even more outrageous. Brewster says:
Are you shocked? If so, consider that most of these projects are in
fact wildly popular, even if the public had to be gulled to go along
with building them. It's standard practice to low-ball cost estimates,
in order to get the bond issue passed, and then to add on costs as
politics requires and the public demands more than the bare-bones model.
So basically, the publisher of Crosscut is saying that taxpayers shouldn't be "shocked" when large public works transportation projects run late and over budget. In fact, according to Brewster, voters and taxpayers should somehow expect and appreciate being misled:
Meanwhile, voters confronted with bond issues for such
mighty plans might keep in mind the same rule of thumb that works when
you call an architect to remodel your house: Double the budget and
double the estimated time. And remember, it's usually worth it, if you
somehow get it built.
Ummm, this is not entirely analogous....unlike a homeowner hiring an architect, taxpayers do not have the option to stop the flow of money when things go wrong.
Nevertheless, according to Brewster, deliberately underestimating costs and overestimating revenues to sweeten the appearance of a large public works transportation project is ok and we should be thankful for not being told the truth because the means will always justify the ends....right???
The PI reports ST2 will cost $22.8 billion and be completed by 2023. Applying Brewster's new methodology means that voters should expect ST2 to cost $45.6 billion and not be completed until 2038.
So do you still think moving less than one percent of all trips by the year 2038 is worth $45.6 billion?
An interesting tid-bit from the Financial Times yesterday. Apparently, one of Europe's largest investment managers, Henderson Group, is considering moving its corporate headquarters, and tax base, to Ireland. Why? Taxation policy.
Ireland's corporate tax rate is 12.5%, compared to the UK's 28%. That is a substantial difference.
According to the Tax Foundation, if Henderson Group relocates to the Celtic Tiger, it will join pharmaceutical firm Shire and a large media firm, United Business International, among others, to make the jump across the Irish Sea to a more business-friendly environment.
Interestingly enough, three years ago the Henderson Group issued a statement to shareholders saying in regards to tax planning that they would "...[perform] the delicate balancing act of paying neither too much nor too little tax to serve shareholders' interests while also demonstrating broader social responsibility."
Assuming the Henderson Group still has the goal of "broader social responsibility" in mind perhaps UK policymakers should take a look at the nation's corporate tax policies because apparently the cost of doing business is outweighing the social benefit from paying such high taxes.
Oh, and the United States' combined federal-state corporate tax rate? A robust 39.3%. Good thing Ireland is more than just a stones throw away.
Earlier this week I asked spokespeople for both Governor Gregoire and Senator Rossi if they support a 2/3 vote requirement for tax increases and if yes, would they support placing them in the constitution like was done with the rainy day reserve from I-601.
Though I haven't received an official response yet from the candidates, Governor Gregoire was on the Dori Monson show today (KIRO 710) and was asked the same question.
Here was the tail end of their exchange on this issue:
Dori: "Yes or no, do you support the 2/3 legislative majority for tax increases?"
Gregoire: “I think it’s a moot issue because I think it [tax increases] ought to go to a vote of the people.”
The full interview is worth listening to. Discussion about the budget deficit starts at 12:50 of the interview (audio here). The exchange on the 2/3 requirement for tax increases starts at 21:22 on the audio link.
I'll post the official responses from Governor Gregoire and Senator Rossi once I receive them.
The State Auditor's recent performance audit of state debt collection practices received numerous kudos today at a public hearing. Along with receiving congratulations from legislative members of the Joint Legislative Audit and Review Committee, the Director of the Office of Financial Management also thanked the auditors for their work.
". . . eight programs that need to improve their collection practices. If the eight programs reduce their delinquent account balances by a modest 5 percent, the state will collect approximately $15.6 million more per year. If they reduce delinquent account balances by 50 percent, they can collect an additional $159.7 million."
Rep. Gary Alexander and Sen. Phil Rockefeller encouraged the State Auditor's Office to expand this effort to review the practices of the state's higher education schools. The auditors agreed to look in that direction.
The Department of Revenue (DOR) received special recognition for not have any findings in the audit. It looks like DOR is really on the ball. Last year it received its 15th straight clean state audit.
On the ballot this
November will be Initiative 985 (I‐985), the Reduce Traffic Congestion Act of
2008. The measure is sponsored by Tim Eyman and is an effort to implement some of
the recommendations made in a recent performance audit conducted by the
Washington State Auditor’s Office (SAO).
·I‐985 would not
raise taxes and would generate about $1.7 billion for transportation
infrastructure every ten years.
increase the projected statewide budget deficit by about $290 million during the
next two year budget cycle and about $284 million in the 2011‐13 biennium.
reduce the state’s reliance on the fuel tax for transportation infrastructure.
·I‐985 would shift
the state’s current policy back toward one that ties public spending to traffic
·I‐985 would open HOV
lanes during non‐peak hours, which would reduce overall delay, because more
drivers would be able to pass through the system. It may also increase
congestion on sensitive direct access lanes and ramps.
·Opening HOV lanes
during non‐peak hours would also increase travel times for buses and cost
transit agencies higher fuel and labor expenses and the loss of up to $20
million in federal grant money.
expand the emergency roadside assistance program and could reduce minor
accident clearance times by nearly 10 percent.
synchronize most traffic signals and reduce travel times up to 20 percent on
major arterials and up to 7 percent overall.
protect toll revenues in the same way the Washington State Constitution
protects gas tax revenues.
A good in-depth article by Washington CEO magazine this month on the business-friendliness rankings being thrown around during this political season. The article touches on the list of rankings I cited in a blog post soon after Forbes Magazine released its updated rankings and placed Washington state as the 3rd best state for businesses.
Again, the point of all these different rankings should center on how to improve Washington's business climate, no matter what ranking we achieve from any of the dozen of rankings available.
"Gov. Chris Gregoire, locked in a close race for re-election, has repeatedly declined to say if she supports Brown's case. She says she's not familiar with the specifics.
'I know that everybody thinks that's surprising. I have not studied it,' Gregoire said in a recent interview."
With the State Supreme Court set to hear arguments about the case on September 9, there is still time for the Governor to study this issue and form an opinion.
This morning I asked spokespeople for both Governor Gregoire and Senator Rossi if they support a 2/3 vote requirement for tax increases and if yes, would they support placing them in the constitution like was done with the rainy day reserve from I-601. I'll post any responses I receive.
Perhaps this is a question that should also be asked at one of the upcoming gubernatorial debates.