Washington Policy Blog

Why Innovation is more sustainable than regulation

August 3, 2010 in Blog

Last Thursday, WPC held its annual environmental conference, highlighting the ways the free market more effectively promotes environmental sustainability than political regulation. Below are the presentations from WPC’s Brandon Houskeeper discussing the Growth Management Act and Environmental Director Todd Myers discussing why our current environmental approach is failing and how to get the state on track to real environmental sustainability.

Brandon Houskeeper discusses the Growth Management Act:

Todd Myers discusses effective environmental stewardship and why innovation is more sustainable than regulation:

Seattle Girds for Possible Teachers Strike

August 2, 2010 in Blog

Last week Seattle Schools Superintendent Dr. Marie Goodloe-Johnson told me the District’s collaborative negotiating process with the teachers union (the Seattle Education Association), in place since April, had broken down.  The Seattle School District is in the midst of a lengthy collective bargaining process on a new teacher contract that will determine the personnel costs taxpayers will have to pay in the years ahead.

Bus union defends higher pay instead of expanded service promised to voters

July 30, 2010 in Blog

In the August issue of the Amalgamated Transit Union (ATU) Local 587 newsletter, there is a lot of attention given to WPC and our recent reports on King County’s ability to deliver the bus service promised to voters after the last two sales tax increases.

Once you get past the partisan, inflammatory and personal attacks, union leaders aggressively defend the higher pay for bus drivers, which has risen about 60 percent since the tax increases. This is twice the rate of inflation over the same time period.

A driver's union leader says this:

“Bus Drivers [sic] wages have tracked King County inflation for twenty years, but little more. The working conditions inflicted on Drivers [sic] is so distasteful that METRO could not hire an adequate number of Driver [sic] in a good economy offering the wages and benefits that they did.”

I’m not sure these union leaders realize it, but in their haste to defend the higher wages, !
they precisely prove my point. The last two sales tax increases that Metro officials promised would deliver 1.28 million hours of new bus service have instead been used to increase wages for union bus drivers.

This is not a liberal or conservative issue. Nor is this a rant against how much money a bus driver makes. Metro drivers work hard and should be paid for it. This is simply about the ability of County officials to deliver the bus service they promised to voters after the last two sales tax increases.

Seattle and other school districts lack fiscal discipline

July 29, 2010 in Blog

Yesterday's well-reasoned Seattle Times editorial by Lynne Varner, "Seattle Schools Lack Fiscal Discipline," starts with the statement that "the district is stuck in a culture of lax indifference when it comes to taxpayers' money." 

Lynne's got it exactly right. 

Governor to request new budget deficit tools

July 29, 2010 in Blog

Next month Governor Gregoire will decide whether to call a special session or issue across-the-board cuts to deal with the state's current budget deficit. With the reluctance of lawmakers to agree to a special session (despite the request for one by Sen. Zarelli) the Governor will likely issue across-the-board cuts of between 3 and 5 percent.

As we pointed our earlier this month, this option does not allow the Governor to leave a reserve meaning she could be forced to issue additional across-the-board cuts again in September and November depending on what happens with the state's revenue forecasts.

Aside from the inability to leave a reserve, th!
e across-the-board cuts option treats all spending equally and doesn't provide the opportunity to make strategic or rational decisions on which programs are more important than others.

This is why the Governor should be provided more budget deficit tools, especially with a part-time Legislature.

It appears the Governor will actively seek these tools next session. According to The Olympian:

Gregoire said the law allowing across-the-board cuts is too blunt and she would like it amended next year. “I don’t think this is the right tool for a governor. The last time we used it was 1991. I think it is a ridiculous tool,” Gregoire said, referring to a lack of discretion on priorities that she would like a governor to have in situations like this one.

The National Conference of State Legislatures reports !
that Governors in at least 10 states have more flexibility to respond to a budget deficit than Gregoire.

Last year I met with officials from the Office of Financial Management (OFM) to discuss this type of reform. At the time OFM said it was considering proposing the following changes to state law to define what the Governor could do:

1.    List programs to which the Governor could not make reductions in allotments.

2.    List program areas in which reductions in allotments would not exceed a certain percent (i.e. 10%)

3.    List program areas in which reductions in allotments would not exceed a certain percent (i.e. 7%)

4.    List programs areas in which reductions in allotments would not exceed a certain percent (i.e. 5%)

5.    List program  areas in wh!
ich reductions in allotments would not exceed a certain percent (i.e. 2%)

6.    Create a joint legislative committee to whom reports of actions under this section is provided.

A simpler solution would be to authorize the Governor to make discretionary cuts (instead of across-the-board) to eliminate a projected deficit and leave up to a one percent reserve. Reductions in programs for the independently elected statewide officials could be contingent on approval from those officials.

This broader deficit reduction authority for the Governor would help incentivize lawmakers to leave an adequate reserve that can weather all but extraordinary drops in revenue while providing the Governor the flexibility to swiftly address a deficit in an intelligent manner.

Peter Goldmark's Shifting Position on Forest Certification

July 27, 2010 in Blog

Last month, Lands Commissioner Goldmark complained that a judge's decision allowing the Okanogan PUD to place power lines on state land, over Goldmark's objections, would harm the value of school trust lands. He claims the decision will reduce revenue to Washington's schools. We noted Goldmark's plan to certify state trust forest lands using a system designed by environmental activists known as Forest Stewardship Council (FSC), would do far more harm, cutting school revenue by about 30 percent according to his agency's own numbers.

Now, Goldmark has shifted his position on the issue. In an interview on TVW last month, he argued that our claim is "Not based in fact at all." In our blog poston the issue on June 8, we made two claims: 1) Goldmark "is advocating increasing the amount of state forest certified under the Forest Stewardship Council" and 2) this would "reduce the amount of timber harvested, and revenue to the schools, by an estimated 25 percent." Though it comes from his own agency, Goldmark may not like the second claim, but he only appears to be disputing the first claim.

In September 2008, when he was running for office, Goldmark was clear that he would seek FSC certification. In the video below from a campaign stop in Bellingham, he says (text begins at 6:00 in the video):

"Unlike Mr. Sutherland, who is supporting Sustainable Forestry Initiative certification, which is basically an industry sham, FSC stands for something that is real, which provides for better sustainable management of our state lands while delivering more value for our state. There is more value in the retail marketplace for FSC than there is for SFI, about 8 to 9 percent. And I will work hard to certify all the state’s forests in a progressive manner so we manage our state’s forests sustainably and we get more revenue stream for school construction.”

So, Goldmark makes three points in the speech: 1) Sutherland isn't committed to certification, 2) SFI is "an industry sham," and 3) He will "work hard to certify all the state's forests" using FSC.

He seems to have changed his position on all of these things. In the TVW interview last month, Goldmark responded to the piece we wrote. Beginning at 10:50 in the video, he says the following about his position on FSC certification:

“Well, I find this very fascinating, because my predecessor, who Todd Myers often is the advocate for, actually was the first to adopt FSC certification on trust lands. In 2008, when he was the commissioner at the time, actually had certified roughly 144,000 acres of state trust lands to FSC standards. So he started the whole process. My approach is that if FSC can deliver more value for the trust beneficiaries and attain greater ecological protection at the same time, I’m more than happy to go forward with it.  But, actually this is a false accusation on the part of Mr. Myers. As you can see I am not the first commissioner to certify trust lands and I have not certified any further trust lands to FSC standards, but I am looking for ways to acquire more value for the trust beneficiaries and if FSC certification can achieve that added value or any other certification, I am happy to proceed."

uote>

Here Goldmark makes three points: 1) Sutherland was the first to seek certification, 2) Goldmark is willing to certify using "any other certification" which would include SFI and 3) Goldmark hasn't certified any further lands under FSC and will do so only "if FSC can achieve added value." These are directly at odds with what he said in 2008.

It is unclear what he thinks is a "false accusation" on our part. In context of the video, it seems Goldmark argues that our claim that he is seeking FSC certification is false, since now he only wants to do so "if" it adds value. He seems to have made a significant shift away from his campaign position to one that is in line with Sutherland's policy. It would also be a refinement of the position he announced earlier this year in the Goldmark Agenda, where he wrote his administration would "Increase the amount of land with Forest Stewardship Council (FSC) certification..."

Often, politicians find policymaking very different than campaigning, and this may be the case with Goldmark's position on forest certification. If he sticks to the new position he outlined on TVW, it is unlikely he will certify any additional state lands due to the high cost. If this is the case, we wholeheartedly agree with his new position which would limit any reduction in revenue for schools.

Senator calls for special session

July 27, 2010 in Blog

With the prospect of Congress sending Washington another bailout all but dead the Senate's top Republican budget writer is calling on the Governor to call a special session to balance the budget. According to Senator Joe Zarelli a special session is the superior choice to issuing across-the-board cuts for the following reasons:

  • The budget is not "one size fits all"
  • Long-term savings best achieved via a special session
  • Only way to leave a reserve is through a special session

Zarelli says there are only two reasons not to call special session:

  • "One, political expediency.  No legislator, in an election year where the public is apparently as discontent as recent polls have shown (SurveyUSA July 23rd poll: 72% disapprove of job Washington state Legislature is doing vs. 17% approve), wants to be called away from the campaign trail into a highly-publicized, and likely very unpopular, second special session.
  • Two, legislative incompetency. If it became clear that legislators were simply not up to the task of making reductions, then it would be incumbent upon the governor to balance the budget via any means at her disposal."  

One more reason may be the fact that lawmakers would be unable to raise funds for their campaigns while in session.

When considering the state's short and long term budget health, none of these reasons trump the need for a rational response to the problem.

As we highlighted earlier this month a special session is the only option to address the deficit while leaving a reserve to weather additional drops in revenue.

Assuming the Legislature built a prioritized list of spending when developing the budget the solution should be as simple as focusing on those activities at the bottom of the list that just made the cut. Of course, if this type of prioritization didn't occur the solution ma!
y prove to be more elusive. This wouldn't, however, exempt lawmakers from the responsibility to build such a list now. 

Ultimately the Governor should be provided more budget deficit tools, especially with a part-time Legislature. To provide more flexibility the Governor could be authorized to make discretionary cuts (instead of across-the-board) to eliminate a projected deficit and leave up to a one percent reserve. This would help policy makers avoid the current dilemma of whether to call a special session to deal with future deficits.

No surprise--Washington state eliminated in early round of Race to the Top competition

July 27, 2010 in Blog

Today, Arne Duncan announced the short list of 19 states which have made the first cut-off in the second application for Race to the Top funding.  Washington is not included.  Washington, which did not even try to compete in the first round, has now failed to make it past the gate in the second round of this competition.

Public records lead to big salary changes for officials in California city

July 27, 2010 in Blog

In case you ever wondered the value of a robust public records law consider Bell, California as exhibit A. Using public records The L.A. Times discovered that several city officials in the city of Bell were taking home outrageous salaries. According to the Times:

"Bell, one of the poorest cities in Los Angeles County, pays its top officials some of the highest salaries in the nation, including nearly $800,000 annually for its city manager, according to documents reviewed by The Times.

In addition to the $787,637 salary of Chief Administrative Officer Robert Rizzo, Bell pays Police Chief Randy Adams $457,000 a year, about 50% more than Los Angeles Police Chief Charlie Beck or Los Angeles County Sheriff Lee Baca and more than double New York City's police commissioner. Assistant City Manager Angela Spaccia makes $376,288 annu!
ally, more than most city managers."

Less than a month after the Times broke this story the Bell city council agreed to take a 90% pay cut from their $96,000 annual salaries with the Mayor and Vice Mayor agreeing to serve out their terms without pay. Several city officials also resigned.

While one can only wonder what type of thinking led these public servants to think this type of compensation was appropriate, all other elected officials in California have been served notice that they are but a public records request away from being held accountable to their constituents.

At least when it comes to state government salaries in Washington, a public records request is not needed. Every two years the Office of Financial Management publishes a Personnel Detail Report with salary information. Here is the report for 2009 a>.

One way to improve this resource is to provide the information in a searchable database like this one in Oregon

With compensation being one of the largest cost drivers for government services, it is important that these details be transparent so that elected officials and taxpayers can see the full picture when making decisions about how to balance budgets.

Schools overhire when times are good and lay off when times are bad

July 22, 2010 in Blog

Marguerite Roza, the highly respected researcher on education finance, in "Teacher Layoffs May Be Linked to Hiring Spree",reports that schools nationwide have been increasing staffing at a rate over double the rate of student enrollment increase.

Thomas B. Fordham Institute finds Washington State's English standards still weak, new math standards strong

July 21, 2010 in Blog

States, including Washington, are moving fast to adopt the Common Core Standards Initiative, a state-led effort to align what students across the nation are learning. 

Today, July 21st, the Thomas B. Fordham Foundation released their analysis of state standards across the nation.  This analysis compares the strength of each state's standards in English and math to the new Common Core Standards.

Sound Transit officials missed their ridership target by a mile!

July 21, 2010 in Blog

During this one year anniversary of light rail, Sound Transit officials keep bragging about how they have carried six million riders since it opened. That is about 16,000 trips per day.

In 1996, Sound Transit officials promised voters the line would be complete by 2006 and carry about 107,000 trips per day. That means Sound Transit should be celebrating its four year anniversary, carrying over 100 million trips by today.

Sound Transit officials missed their ridership target by a mile!

State Auditor weighs in on budget reforms

July 21, 2010 in Blog

State Auditor Brian Sonntag has on op-ed in the Seattle Times today highlighting some of the long-term costs facing taxpayers as well as offering his ideas for budget reform.

From the op-ed:

"Our work at the Office of State Auditor uniquely positions us to understand the state's broad financial condition. For example, we know even in good economic times as well as bad, the state has not systematically funded all its long-term financial obligations.

This raises serious concerns about the state's ability to meet future funding commitments without significant action.

Long-term challenges include:

  • The two oldest employee pension systems — Public Employment Retirement System (PERS) 1 and Teachers Retirement System (TRS) 1 — have a combined unfunded liability of more than $8 billion. That means the state doesn't have money set aside to pay that much in promised benefits to pensioners in those two systems. This was brought on by continuous underfunding and recent investment losses. Since the plans are made up of the longest-serving public employees and teachers, it won't be long before the bill comes due.
  • An $11 billion unfunded liability in workers' compensation funds that pay cost-of-living increases to disability pensions for injured workers and their dependents.
  • A $4 billion liability in the health- and life-insurance benefits paid to retired public employees without any accumulation of revenue to pay for it.

Unless these and other long-term financial obligations are dealt with, state government cannot sustain itself."

Here are the Auditor's budget reform recommendations:

"We can no longer balance the state budget by nibbling at the edges, reducing some services and imposing some additional taxes.

We must move beyond just tackling the latest cash-flow crisis. We
must set a long-term vision for the state. For that, we need big
thinking, bold ideas and courageous action.

We need to set a new normal for state government in which:

  • Government sets priorities based on citizen expectations.
  • Government pays only for the priority programs and services it can afford, and reduces or eliminates what it can't.
  • We create a centralized financial-management system to provide
    needed and effective oversight and accountability over all state
    expenditures and financial activities.
  • We end the 'bow wave.' We've seen too many instances when new programs are created without a means to pay for them.
  • We establish comprehensive strategic planning to guide all
    programs and functions using a consistent long-term vision to meet the
    core mission of the state.
  • We make a strong commitment to open, transparent government and ensure citizens are better-informed and listened to."

Have your own ideas for reforming the state budget? Submit them on the Governor's budget recommendation website and add them to the more than 1,000 citizen recommendations to date.

Yes, Seattle has a "Geek Week." Yes, you should attend...

July 20, 2010 in Blog

Seattle has been blessed to be a major player in the high-tech industry for the last several decades. Its impact is mammoth on the greater Seattle region, both economically and socially. But what about some of the more pertinent public policy aspects to the high-tech industry and how it affects entrepreneurship, innovation, privacy, etc.?