The Congressional Budget Office (CBO) scored the Senate Financial Committee health care reform bill this week. Never mind the fact the bill is only a summary and is not in legislative language, which made the CBO disclaim the cost of an actual final bill.
Total cost is reported at $829 billion with $81 billion in savings over the first ten years. Unfortunately, as published in a Micheal Cannon report for CATO, the cost would be closer to $2 trillion over the first ten years. So why the difference?
First, the CBO omitted $75 billion in new federal spending and $33 billion in unfunded mandates on state governments. Second, the nonpartisan CBO assumed Congress would allow the "sustainable growth rate" cuts in Medicare provider reimbursement starting in 2012. Congress has never let this happen. And finally, the CBO omitted the cost of the individual and employer mandates which represent 60% of the cost of Massachusetts' health care reform.
Therefore, to do the math: $829b + $75b + $33b = $937 billion (which is 40% of some number).
40% x N = $937 billion N = $937 billion divided by 0.4 = $2.34 trillion.
So the Baucus bill is not budget neutral, let alone a deficit reducer. Instead, it is a colossal budget breaker that has the potential of bankrupting this country in just the first decade of application.
Tim Eyman's initiative that would limit government spending could hurt Washington's credit rating, which would cost the state tens of millions of dollars, state Treasurer James McIntire says . . . McIntire said credit ratings consider numerous factors, including initiatives like Eyman's.
"They want to know how your economy is doing, they want to how your revenues are doing, they want to know what your balance sheet looks like...and they ask about things like initiatives," he said in an interview. "Any!
thing that restricts taxes or spending, that's going to have a long-term structural impact to come to resolution about financial management, is something that they worry about."
Credit raters like Moody's say "Voter initiative activity adds element of fiscal uncertainty,” and is a challenge for the state, but the adoption of a tax or spending restriction did not make Moody's list of things that would reduce the state's credit rating. According to Moody's July 10 report on Washington's credit outlook:
What would change the rating - UP
Sustained trend of structural budget balance, plus restoration and maintenance of strong reserve levels.
Economic expansion and improved industry diversification.
Reduction of debt ratios to levels closer to Moody's 50-state medians.
What could change the rating - DOWN
Deeper and longer recession that restrains consumer confidence, leading to prolonged revenue weakness and employment erosion.
Protracted structural budget imbalance.
Increased reliance on one-time budget solutions.
Cash flow narrowing, leading to strained liquidity.
Failure to adopt plan to cover expenditures once federal fiscal stimulus monies are no longer available.
Perhaps the reason adoption of a tax or spending restriction didn't make the list is the fact Washington already has both. In fact, the state's credit rating didn't drop after passage of I-601 (tax and spending restriction) in 1993 or I-960 (tax restriction) in 2007.
Based on the criteria described by Moody's, it looks like the biggest devil for the state’s credit rating will be whether or not the state lays out a plan for balancing the budget once the federal bailout funds are gone and stops resorting to one-time fixes.
average vanpool passenger traveling between Tacoma and Seattle would save about
28 percent in annual commuting costs compared to taking a bus, 45 percent compared
to taking Sounder Commuter Rail and 61 percent compared to driving a car.
In April, Congressman Dave Reichert applied for a $600,000
appropriation for a feasibility study to determine whether a commuter rail
system could connect the cities of Maple Valley and Covington with Auburn. Much
like Sound Transit’s Sounder Commuter Rail, the proposed route would use
existing BNSF rail tracks. The application claims there are five cities
interested in pursuing the federal money for the study: Covington, Maple
Valley, Black Diamond, Enumclaw, and Auburn.
Connecting suburban communities with transit is important,
but research shows that commuter rail is the worst option. To put it more simply,
low ridership does not justify the cost.
We don’t have to look further than our own back yard and Sound
Transit’s poor performance at running a commuter rail system. Even with using
existing BNSF tracks, the Sounder is extremely inefficient.
The following table compares the expenditure per passenger
mile of commuter rail with other intercity transit modes.
The operating cost for the Sounder to move a single
passenger is .60 cents per mile. Accounting for capital costs, expenditures climb
to $5.39 per mile. When compared to other intercity transit modes, commuter
rail is three times more expensive than Sound Transit buses, six times more
than county buses and 27 times more expensive than vanpools.
It gets worse.
Another performance measure that reflects the social
benefits of transit is farebox recovery ratios, or the relationship between how
much operating expenses users and taxpayers cover. Traditional bus systems
generally recover about 20 percent of their operating costs from users, while
taxpayers subsidize the remaining 80 percent.
To look at it another way, consider the public must cover
their share of operating expenses with a subsidy, generally through increases
in sales taxes. This subsidy can vary based on the efficiency of a particular
transit mode and by the farebox recovery policy implemented by the legislative
body of each agency. The following table compares the operating costs per
boarding, operating revenues per boarding and the public subsidy required per
boarding for vanpools with other transit modes between 2002 and 2007.
Six Regional Vanpool Agencies
Sound Transit Buses**
Six Regional Bus Agencies
Sounder Commuter Rail
cost per boarding
revenue per boarding
subsidy required per boarding
Between 2002 and 2007, the public paid about $1.26 for every
vanpool trip made in the Puget Sound region. In comparison, the public paid
$5.13 in operating costs for every passenger trip on Sound Transit’s buses and $10.66 in operating costs for every
passenger trip made on the Sounder Commuter rail. The differences are even greater when capital costs are included.
Based on the region’s experience with commuter rail, building
a similar system between Auburn and Maple Valley does not make sense. Research
shows that the biggest influence on ridership is density. There are some
exceptions but generally transit ridership is less than 1 percent of all
commuters in areas with less than 10,000 people per square mile. Transit
ridership rises to 3 percent with densities between 10,000 and 25,000 people
per square mile; and 8 percent when the density is above 25,000 people per
square mile. The density of Maple Valley is less than 2,000 people per square
costs and market potential in the Puget Sound region shows that vanpools are a
successful and more efficient option with moving longer, intercity commuters.
Instead of spending more public money to connect cities with commuter rail policymakers
should look toward vanpools as the most efficient alternative.
Last week a number of companies that stand to benefit from federal cap-and-trade legislation announced they were leaving the U.S. Chamber of Commerce over disagreements about the Chamber's strong stand against climate legislation. The rift demonstrates that some believe more profits are to be made by promoting government regulation that channels business to them than the creative destruction that occurs in a free market.
Today, another name was added to the list: Apple. In withdrawing from the US Chamber, Apple's Vice President wrote "Apple supports regulating greenhouse gas emissions, and it is frustrating to find the Chamber at odds with us in this effort."
There is an irony to this decision. While Apple's headquarters are in the US, their products are assembled in China, where no serious greenhouse gas regulations are likely anytime soon. Thus, no matter what the US decides about climate policy, Apple will likely avoid much of that cost.
So, the question is this: will Apple bring their production to the US, where we emit 25 percent less CO2 per unit of production than China, or will they continue to manufacture in a high carbon country?
The Open Government Task Force created by State Auditor Brian Sonntag and Attorney General Rob McKenna met this morning to discuss alternative ways to enforce the state's open government laws. Currently the only option available to citizens is to file a lawsuit if they disagree with an agency's opinion on whether a record should be disclosed.
Opening the meeting State Auditor Brian Sonntag noted there has to be a better way for citizens to access government records without having to resort to lawsuits. Attorney General Rob McKenna agreed highlighting the fact that every other area of law has an administrative mechanism for addressing concerns. The reason is administrative mechanisms are faster and more cost effective than relying solely on court relief. Unfortunately, Washington lacks this type of recourse!
for enforcement of the state’s open government laws.
The Task Force's heavy hitters (including House Majority Leader Lynn Kessler, Rep. Chris Hurst, Rep. Joel Kretz, and Sen. Bob Morton) heard a presentation from Terry Mutchler, Executive Director of Pennsylvania's Office of Open Records. Mutchler described how Pennsylvania's administrative process works for citizens and agencies to resolve public records dispute.
The administrative review processes in other states was also discussed at the meeting. Working with the Attorney General's Office I reviewed the public records laws in the states with administrative options for citizens and created this handout for the Task Force.
Here is a sampling of how enforcement of open government laws !
works in those states:
Kentucky - Attorney General review of records dispute and subsequent opinion has the full force and effect of law.
Nebraska - If an agency ignores the opinion of the Attorney General that a record should be disclosed, the Attorney General must sue the agency on behalf of the citizen if requested.
New Jersey - Government Records Council offers mediation services to resolve records disputes.
North Dakota - If an agency ignores the opinion of the Attorney General that a record should be disclosed, the agency or public official is personally liable.
Next up for the Open Government Task Force is working on a draft report laying out its recommendations for the Legislature to consider next session.
The House State Government committee held a work session today focused on how to improve agency efficiency. Rep. Sam Hunt, Chair of the committee, opened the meeting by asking, "What do we do to make government more efficient?"
One of the solutions provided by the Governor's Office is for agencies to spend more time on their core missions versus "back office" activities. Here is the info from one of the Governor's handouts:
Governor Gregoire wants state government to meet the demands of the 21st century economy. One key to success is for state agencies to focus on their core missions.
Reduce the size of government
Provide 21st century customer service
Streamline agencies and operations to get best value for cost
The goal is to better serve the public with a more nimble and efficient government. The public will continue to receive service from the experts in the field, and departments will receive the same: business services from the agency expert in the field. It’s the old example: why should the head of DSHS have to be a real estate guru as well as a social services expert?
We will align our systems to achieve economies of scale and improve efficiency across the spectrum of government.
This is a matter of aligning programs and positions, not judging the people in them. The driving force behind this is maximizing limited resources. The work people in central service fields do is valuable and needed. State agencies must have email to function. The question is whether an agency should be running its own email system when taxpayers are also funding a Department of Information Services.
We know it will be hard. Change when resources are scarce is diffi!
cult. We know savings may not be instant, and the steps have to be incremental. But difficulty is not an excuse for the status quo. Constant improvement is a hallmark of successful organizations.
We are committed to it. The governor has made this a priority, and so has the cabinet. We’re accepting the challenge and expect to meet it.
Also discussed was the joint effort between the State Auditor and the Governor to review ways to improve agency efficiency.
In need of extra cash? The state is holding $700 million in unclaimed property - some of which may be yours. According to the Department of Revenue:
Three million current or former Washington residents have a stake in $700 million in unclaimed property being held by the Washington State Department of Revenue. You may be one of them.
Their names are listed in the Department’s searchable online database, http://claimyourcash.org, as having unclaimed property turned over to the state by businesses, generally after they have had no contact with the holder for three years.
Unclaimed property includes items such as uncashed paychecks, rent and utility deposits, refunds, escrow funds, dormant bank accounts, stocks and bonds and even the contents of safe deposit boxes.
The Department mails claim forms to the last-known addresses of potential claimants after they receive the property, but oft!
en the individuals have moved and no forwarding address is available.
During Fiscal Year 2009, the Department returned $45 million to 88,000 claimants, yet the number of people with potential claims continues to grow.
Revenue Director Cindi Holmstrom said the odds of someone finding unclaimed property have grown steadily over the years, are now literally 50-50, as the Department continues its efforts to educate businesses on the legal requirements to turn over unclaimed property.
“We’ve made it as easy and simple as possible for people to search for and claim their property,” Holmstrom said. “Our goal is to return as much of this property as possible to the rightful owners.”
Click here to see if the state is holding your unclaimed property.