This past legislative session, the legislature passed HB1906 which temporarily increases the amount of unemployment insurance (UI) checks by $45 as well as raised the minimum insurance benefit amounts by drawing down the state's health UI trust fund. The $45 is temporary, however, and only extends to the end of the year. At first this was part of the Governor's plan to help stimulate the economy. As I pointed out, however, raising unemployment insurance benefits doesn't fall under the category of economic stimulus. It's just increasing government benefits.
According to the Employment Security Department, the March forecast shows a 24% bump in the cost of the temporary!
benefit. The Department uses these forecasts to guesstima!
te costs and November's forecast showed a $187 million cost for the $45 temporary increase in UI benefits (through 2011) but now that has been updated to $231 million. Again, this is off of the March forecast, so the June forecast released last week will most likely increase these costs. ESD won't have that information available for a few weeks.
True, a $231 million hit to a reserve fund of $3.7 billion is not a huge amount. But the latest ESD Economic Update also contains information that based off of this year's 1906 and 5963 legislation, the trust fund could dip as low as 11.7 months by calendar year 2011 -- or $2.4 billion. This would put the tru!
st fund below the DOL recommended levels.
Why is this a concern? Because unforeseen expenses can lead to tax increases. And since employers pay 100% of UI premiums do we really want to make the cost of labor even more expensive?
Washington should apply for its share of federal high-speed rail stimulus funds for safety improvements such as grade crossings and signaling systems, but not for new trains that will obligate taxpayers to pay millions of dollars in annual subsidies, says a new study written by WPC adjunct scholar Randal O'Toole.
∙ Initial funding commits the nation to a program whose eventual costs!
could exceed $1 trillion. This doesn’t count overruns, operating subsidies, and rehabilitation costs.
∙ Outside of the Boston-to-Washington and Philadelphia-to-Harrisburg routes, Amtrak short distance trains lose an average of $37 per passenger and Amtrak expects the states to cover most of these operating losses.
∙ A hidden cost of rail is that it must be rebuilt about every 30 years. This means construction could leave states obligated to fund billions of dollars in rehabilitation costs.
∙ The fact that American freight railroads are profitable while European passenger lines are not suggests that freight, not passenger, is the highest and best use of a modern railroad in most places.
∙ It is far more cost-effective to save energy by encouraging people to drive more fuel-efficient cars than to build and operate high-speed rail.
∙ Considering the energy required for rail construction, improvements in auto and airline energy ef!
ficiencies, and the high energy cost required to move trains a!
t higher speeds, high speed rail will have little to no environmental benefit.
∙ Upgrading the 280 rail miles in Washington to 110-mph standards would cost nearly $1 billion.
∙ The average Washingtonian will take a round trip on high-speed rail once every 8.5 years.
∙ For every Washingtonian who rides high-speed rail once a month, more than 100 Washington residents will never ride it.
The US House of Representatives released its 850 page bill for health care reform today. Although the details at the margin are different than the Kennedy-Dodd bill in the Senate, there are some fundamental similarities:
* A government-run health insurance exchange.
* A government-option health insurance plan to "compete" with private insurance.
* Subsidies for the purchase of health insurance up to 400% of the federal poverty level.
* Guaranteed issue - i.e. anyone, regardless of prior illness, must be offered health insurance.
* A cap on out-of-pocket expenses.
* An individual mandate - everyone must have health insurance.
* An employer pay-or-play with a penalty fee of 8% of payroll. To avoid the fee, employer- sponsored plans must meet minimum benefit and contribution requirements set by the government.
The one glaring item not addressed in the bill is how to pay for all of this government-run health care. As the House leadership has stated, however, everything is "on the table" - read increase taxes and further deficits.
Now that the reform proposals in Washington, D.C., are actually coming out on paper, the taxpayers of the nation are starting to understand the real impact of these broad sweeping health reform plans. The debate is just now starting as more people understand the restrictions of liberty and the costs of government controlled health care.
Today the Puget Sound Business Journal (subscription required to read the whole article) ran an op-ed by Ana
Castro, a small business owner in White Center, on why small businesses need a
government-run health care option in order to offer “choice” in the
I will agree with Ms. Castro that small business owners
often think of their employees as family, and that the price of health care has
seen an extensive rise over the past decade. But Ms. Castro is severely
misguided if she thinks a government-run option will provide the choice she
First off, it’s always disappointing to see proponents of a
particular policy option whip out the preemptive ad hominem attacks. When Ms.
Castro says “In a smear campaign designed to kill reform, the insurance
industry’s public relations machine will try to scare us about a ‘government
takeover’ of health care, long waits and rationed care,” she is basically
saying that any debate, any position counter to her position, is a smear
campaign not worth listening to. So much for high-minded debate.
Secondly, Ms. Castro asserts, “For small businesses like
mine that currently have no good choices, the public plan would compete with
private insurers to lower costs across the board and guarantee coverage we can
count on.” If Ms. Castro were paying attention over the last decade in which
premiums skyrocketed, she would have to acknowledge that one of the main
reasons for these cost increases was greater government involvement (at the
state level) in the insurance market. How many insurance companies operated in
Washington in the 1990s? How many are there today?
The lack of choice does indeed cut down on competition. And competition is
good. At least Ms. Castro and I would agree to that.
Third, let’s address government “competing” in the
marketplace. I am curious how government will efficiently, and fairly, compete
in a marketplace it regulates. How will the government throwing around its weight affect innovation in research and development in the private sector?
Fourth, we cannot simply sweep aside the “cost” factor.
Again, Ms. Castro’s bromides include floury language such as “Our health care
system will work best when everyone has the opportunity to fairly contribute to
health care…” But she does not mention that $1 trillion in additional national
debt to insure 16 million people and that this costs does not include the public plan she is pushing.
The bottom line is that small businesses are hurting and
need help in this important area. And Ms. Castro and I agree that competition
is one of the keys towards health care reform – small businesses need more
choices than they are offered now. But a government-run plan will not meet
those needs and in fact, most likely deprive millions of Americans of their
private insurance plans and increase the load on the public plan, therefore
increasing costs and reducing choice even further.
Washington Congressman Brian Baird (D) once again introduced a resolution this week calling for a 72 hour review period on legislation. Baird's House Resolution 554 is co-sponsored by Rep. John Culberson of Texas (R). Here is the full text of the proposal as introduced on June 17:
Amending the Rules of the House of Representatives to
require that legislation and conference reports be available on the
Internet for 72 hours before consideration by the House, and for other
SECTION 1. PURPOSE.
The purpose of this resolution is to:
(1) Modernize the operations of the House of
Representatives using information technology that has transformed and
increased the efficiency of many aspects of American society such as
financial services and markets, transportation, manufacturing,
agriculture, and commerce with consumers and businesses.
(2) Slow the explosive growth of the
$11,000,000,000,000 national debt of the United States, reduce
excessive annual budget deficits, and control the size and scope of
government by ensuring that there is adequate scrutiny of proposals for
new and amended laws, taxes, and expenditures.
(3) Enhance public participation in American democracy
and improve the quality of proposed legislation by allowing the
opportunity for its review by State and local government officials,
small business owners, large business leaders, journalists, scientists,
academics, labor leaders, nonprofit organization leaders, authors of
weblogs, and interested citizens.
(4) Help restore public trust in government and enhance
respect for the House of Representatives and the Congress by ensuring
that their operations are conducted with the openness, order, and
dignity befitting the world's oldest democracy.
SEC. 2. AMENDMENTS TO RULE XIII REGARDING AVAILABILITY OF LEGISLATION AND REPORTS.
(a) Clause 4 of rule XIII of the Rules of the House of Representatives is amended--
(1) in its side heading, by inserting `legislation and' before `reports';
(2) in paragraph (a) by striking subparagraph (1) and inserting the following new subparagraph:
`(1) Except as specified in subparagraph (2), it shall not
be in order to consider in the House a measure or matter until 72 hours
(excluding Saturdays, Sundays and holidays except when the House is in
session on such a day) after the text of such measure or matter (and,
if the measure or matter is reported, the text of all accompanying
reports) have been made available to Members, Delegates, the Resident
Commissioner, and the general public pursuant to subparagraph (3).';
(3) by adding at the end of paragraph (a) the following new subparagraph:
`(3) Without further amendment before floor consideration,
the full text of the measure or matter and each committee report
thereon shall be posted continuously by means of the Internet in such a
manner that they are conveniently accessible using existing technology,
anonymously and at no cost, in a format that is searchable by text.';
(4) in paragraph (c), by striking `the third calendar
day' and inserting `at least 72 hours' and by striking `on' and
(b) Rule XIII of the Rules of the House of Representatives is further amended--
(1) in clause 5(b), by striking `and the Resident
Commissioner' and inserting `the Resident Commissioner, and the general
(2) in clause 6(c), by striking `or' at the end of
subparagraph (1), by striking the period at the end of subparagraph (2)
and inserting `; or', and by inserting before the period `a rule or
order proposing a waiver of clause 4(a) of rule XIII or of clause 8(a)
or 8(b) of rule XXII, unless a question of consideration of the rule is
adopted by a vote of two-thirds of the Members voting, a quorum being
SEC. 3. AMENDMENTS TO RULE XXII REGARDING AVAILABILITY OF CONFERENCE REPORTS AND AMENDMENTS REPORTED IN DISAGREEMENT.
Clause 8 of rule XXII of the Rules of the House of Representatives is amended--
(1) by striking subparagraph (a) and inserting the following new paragraph:
`(a)(1) It shall not be in order to consider a conference
report until 72 hours (excluding Saturdays, Sundays and holidays except
when the House is in session on such a day) after the conference report
and the accompanying joint explanatory statement have been available to
Members, Delegates, the Resident Commissioner, and the general public
pursuant to subparagraph (2).
`(2) Without further amendment before floor consideration,
the full texts of the conference report and the accompanying signed
joint explanatory statement shall be posted continuously by means of
the Internet in such a manner that they are conveniently accessible
using existing technology, anonymously and at no cost, in a format that
can be searched by text.';
(2) in paragraph (b), by striking subparagraphs (1) and (2) and inserting the following new subparagraphs:
`(1) It shall not be in order to consider a motion to
dispose of a Senate amendment reported in disagreement by a conference
committee until at least 72 hours (excluding Saturdays, Sundays and
holidays except when the House is in session on such a day) after the
report in disagreement and any accompanying statement have been
available to Members, Delegates, the Resident Commissioner, and the
general public pursuant to subparagraph (2).
`(2) Without further amendment before floor consideration,
the full texts of a Senate amendment reported in disagreement and any
accompanying statement shall be posted continuously by means of the
Internet in such a manner that they are conveniently accessible using
existing technology, anonymously and at no cost, in a format that can
be searched by text.'.
SEC. 4. PROTECTION OF CLASSIFIED INFORMATION.
Nothing in this resolution or any amendment made by it
shall be interpreted to require or permit the declassification or
posting on the Internet of classified information in the custody of the
House of Representatives. Such classified information shall be made
available to Members in a timely manner as appropriate under existing
laws and rules.
SEC. 5. SENSE OF THE HOUSE REGARDING AMENDMENTS.
It is the sense of the House that, with the objective of
preventing circumvention of clause 4(a) of rule XIII of the Rules of
the House of Representatives that the Committee on Rules should develop
standardized policies and procedures to require that proposed
amendments (except those offered under an open rule) that are major in
size, scope, or cost be posted on the Internet for an appropriate
number of hours.
Today's Washington Post "About 250 Teachers Are Given Pink Slips," by Bill Turque discusses District of Columbia Chancellor Michelle Rhee's plans to layoff 80 experienced, tenured teachers who were notified by administrators that they had 90 days to improve their teaching or face termination. The process is considered so cumbersome and time-consuming that administrators have only terminated a handful of employees each year for poor performance.
Michelle Rhee is clearly determined to improve the quality of her teaching staff, as she knows that the research consistently shows that placing an effective teacher in the classroom is more important than any other factor, including class size, in raising student achievement. A good teacher can make as much as a full year's difference in students' learning growth. Students taught by a high-quality teacher three years in a row score 50 percentile points higher than students of ineffective teachers. Students taught by a bad teacher two years in a row may never catch up.
Defenders of the status quo claim that it is possible to easily remove ineffective teachers. Would that that were so. If this were true, a school district the size of Seattle would be certainly removing more than a handful of teachers every year, wouldn't you think?
Fortunately, there is accurate information on the Seattle School District available to provide an answer to this question. The McKinsey Report to the Seattle School Board dated January 30, 2008, which is part of the Superintendent's Strategic Plan for Excellence, indicates on page 18 that of the 3220 teachers in the district, 8 teachers were put on probation and 7 teachers were dismissed.
These numbers reveal that it is not easy to remove ineffective teachers from Seattle's classrooms.
Here are some suggestions for questions to ask your school district: How many ineffective teachers has your district put on probation or dismissed in the last year? What is your school superintendent doing to negotiate changes to the union contract to streamline the process for removing ineffective, tenured teachers, without jeopardizing the due process rights of teachers?
Perhaps one of the things most taken for granted about today's state revenue forecast is the fact that no one is fighting over the numbers. When the state's nonpartisan revenue forecast committee issues its projections you don't see dueling press releases from partisans claiming that the numbers are wrong and the state should instead base its projections on the source of a political party's choosing.
Unfortunately the same can't be said about the debate occurring in Washington D.C. concerning the nonpartisan Congressional Budget Office's (CBO) projection on the cost of the health care reforms being considered. As noted by The Hill:
"Democratic leaders are growing frustrated with Senate Republicans and the Congressional Budget Office (CBO) for clouding prospects for timely passage of the healthcare overhaul by way of their critiques . . .
Democratic leaders have also grumbled about the CBO, which released an analysis Monday that may result in Senate Finance Committee Chairman Max Baucus (D-Mont.) delaying action on his panel. CBO has reportedly scored the Finance Committee’s proposals at $1.6 trillion, forcing Baucus to chop the package by $600 billion . . .
Growing frustrations with CBO have spurred some Democrats to consider shelving cost estimates from the agency and using projections from another source, such as the Office of Management and Budget (OMB), which is part of the Obama administration . . .
Peter Orszag, the director of Office of Management and Budget, however, has downplayed the possibility of using projections from his agency instea!
d of CBO.
'CBO scoring is going to be used in t!
his process,' Orszag said late Wednesday."
The whole point of nonpartisan forecasts is to help remove politics from the process and provide accurate information to the public and lawmakers. If those numbers get in the way of speedy action and instead force more thoughtful debate, the only losers are politicians --- not the taxpayers they serve.
Despite a drop in projected revenue, the state's top economist Dr. Arun Raha believes the worst is over. According to Raha the "free fall in the economy is behind us . .. decline in revenue is moderating."
That said, today's news creates additional pressure on the state budget. For the first time since the 2001-03 biennium (impacted by the 9/11 terrorist attack), traditional General Fund revenue collections are projected to be negative biennium over biennium as shown here:
2001-03: $21,141 million (0.6% decrease)
2003-05: $23,389 million (10.6% increase)
2005-07: $27,772 million (18.7% increase)
2007-09: $27,706 million (0.2% decrease)
2009-11: $27,692 million (0.1% decrease)
The impact of this is a reduction in the amount of reserves available for the state to weather any unforeseen bad news. 2007-09 reserves are reduced to $218 million. 2009-11 reserves are reduced to a paltry $53 million, Both reserves are well below one percent of expenditures (a 10 percent reserve is recommended).This includes the constitutional rainy day account.
This past session the legislature changed the definition of the General Fund to include additional accounts. By adding those new accounts the revenue forecast is essentially flat as shown here:
2005-07: $29,785 million (17.3% increase)
2007-09: $29,812 million (0.1% increase)
2009-11: $29,834 million (0.1% increase)
Meanwhile, the Chair and ranking member of the House Ways and Means Committee told the Association of Washington Business (AWB) they see no reason for a special session. As reported by Jason Hagey:
"State Reps. Gary Alexander, R-Olympia, and Kelli Linville, D-Bellingham, agree that Washington legislators should not convene for a special session this year, despite growing budget woes.
Linville told a meeting of the AWB’s Governmental Affairs Council that Gov. Chris Gregoire should use her limited authority to trim the budget enough to get through until January when the Legislature meets again for a regular session."
"blockquote" style="margin-left: 40px;">"If at any time during the fiscal period the governor projects a cash deficit in a particular fund or account as defined by RCW 43.88.050, the governor shall make across-the-board reductions in allotments for that particular fund or account so as to prevent a cash deficit, unless the legislature has directed the liquidation of the cash deficit over one or more fiscal periods . . ."
Whether or not the Governor takes this action it is clear that additional reforms to the state budget will be needed to help put the state back on a sustainable spending path.
For the last decade, the United States Congress has wisely chosen to prohibit states and local governments from imposing taxes on Internet access. As the Internet developed during the 1990s, one of the chief worries at the time, as established non-tech businesses integrated the world wide web into their daily activities was, "will we have to start paying for each email?"
If anyone wonders what government-run health care reform will look like, look no further than our current Medicaid program. Because of severe cost over-runs and the accompanying decrease in physician reimbursements, patients are experiencing the predictable decrease in provider participation.
The Wall Street Journal reports children in the Medicaid program are finding it much more difficult to see doctors. Even when appointments are made, the wait times are nearly unacceptable compared to traditional times in this country.
Access to a waiting list is not the same as access to health care.
The Healthy Building Network makes this claim today:
It Bears Repeating: PVC Elimination May Be the Most Significant Contribution You Can Make to Homeland Security
What is the link? PVC manufacturers use about 40 percent of the chlorine in the US and terrorists could, so the claim goes, get that chlorine and launch an attack. They cite a GAO study for this claim. The GAO says that replacing chlorine with other compounds "potentially could lessen the consequences" of a terrorist attack. Nothing like three caveats ("potentially could lessen") to really take the steam out of a claim.
It is also worth pointing out the total number of terrorist attacks worldwide using chlorine is almost zero. One counter terrorism blog notes:
The use of chlorine in terrorist attacks, however, is relatively rare. In 1997, a serial bomber detonated several chemical bombs containing chlorine across Sidney’s eastern suburbs that injured some three dozen people. In Japan, on the third anniversary of the Sarin gas attacks on the Tokyo subway system, a chlorine-like gas was found in three beer cans in the Kasumigaseki subway stations. Other than that, reports of the use of chlorine in terrorist attack are sparse.
So, the "most significant contribution" to homeland security is to ban a chemical whose use is "sparse" and follow a policy that "potentially could lessen" the impact of an attack. If this is the best argument they've got, they need to go back to the drawing board.
The American Public Transportation Association (APTA) has released its most anticipated quarterly ridership statistics. As I suggested before, transportation analysts have been eagerly waiting for the first quarter reports to see whether the spikes in passenger demand during 2008 would last since fuel prices and employment rates have fallen.
Nationally, overall ridership during the first quarter of 2009 is down 1.17% from the first quarter of 2008. Heavy Rail is down 1.77%. Light Rail is up 1.78%. Commuter Rail is down 3.03%. Buses are down 1.22%.
Overall, King County is down 1.27%, with bus ridership falling 1.33%.
Bucking the trend is Sound Transit, whose overall ridership is 8.04% higher. But Sound Transit officials shouldn't get too excited because their ridership didn'!
t peak until the last quarter of 2008. Looking at Sound Transit's daily demand in 2009 reveals average weekday boardings have fallen nearly 3% from 2008. This suggests that barring another spike above the average, Sound Transit's ridership will be lower in the next quarterly reports.
As I said before, most agencies ended 2008 with large increases in transit use. The
larger demand placed pressure on budgets and had policymakers calling
for higher taxes to expand service. The larger demand also had some
suggesting that society had fundamentally shifted behavior away from
the personal automobile, which has federal officials calling for
massive spending increases in traditional transit and high speed rail
with the next reauthorization bill.
The early data however, suggests the spike may have been temporary and travel behavior has not fundamentally shifted. Motorists are simply reacting, quite predictably as fuel prices and the economy fluctuate.
With the threat from federal budget deficits growing each day, it appears the President is turning to the promise of performance-based budgeting as a solution.
Consider this June 11 memo to agency and department heads issued by President Obama's budget director Peter Orszag:
"Our goal is to build a transparent, high-performance government capable of addressing the challenges of the 21st century. The American people deserve a government that works, where the public interest is prioritized, where the impact of government spending is transparent and held to high, objective standards, and where results and good management matter . . . To be successful, we must focus resources on our highest national priorities, including investments in health reform!
, clean energy, and education. At the same time, we must enforce fiscal discipline, making sure that we invest in what works, do not waste taxpayer dollars on programs that do not work or are duplicative, and improve performance across the board."
One of the ways Orszag hopes to accomplish this is to focus agency attention on high-priority performance goals:
"Identification of agency high-priority performance goals is a first step toward developing the President’s agenda for building a high-performing government. There will be regular reviews of the progress agencies are making to improve performance in priority areas including problems they encountered and plans to address those problems. To prepare for these reviews, each agency is asked to identify a limited a number of high-priority goals and begin to define the strategies and means to achieve them . . . The agency goals identified for this !
purpose should generally have:
High direct value to the public or reflect achievement of key agency missions, as opposed to being focused on internal agency management or other administrative priorities.
Congressional authorization and appropriations required for successful implementation; though additional legislative changes may also be identified to contribute to success.
Coordination, operational, or other implementation challenges including across multiple agencies that once resolved, will likely lead to improved effectiveness or efficiency.
Performance outcomes which can be clearly evaluated, and are quantifiable and measureable in a timely fashion.
Significant challenges unlikely to be overcome without a concerted focus of agency resources."
Perhaps with an eye towards the spending problem in D.C., the memo goes on to direct agencies to prepare two alternative budget requests based on a freeze in spending and a five percent reduction.
Whether or not the President's proposed budget next year actually reflects this process, the information provided by agencies in response could prove to be invaluable for Congressional budget writers --- should they take the initiative to review it.
As we've previously recommended, Washington state lawmakers should also focus on agency performance when making budget decisions. Providing those who control the purse strings with this type of information allows them to make informed decisions on which purchases will deliver the highest results for taxpayers and those who rely on essential services.
The nonpartisan Congressional Budget Office (CBO) released a preliminary estimate of the cost of the major Democratic health care reform bill yesterday. The Kennedy-Dodd Plan would increase the deficit by $1 trillion over the next ten years.
Once the plan was fully up and running, the CBO projects 39 million people would obtain insurance through the government-run health insurance exchange. Unfortunately (but predictably), the CBO estimates at least 10%, or about 15 million individuals, would switch from employer paid coverage to the government plan. In addition, coverage from other private sources would fall by at least 8 million. Hence, the government plan would decrease the number of uninsured by a net of only 16 million. This is truly a small number for the enormous cost.
As if this wasn't bad enough, the CBO estimate does not even include the cost of the proposed Medicaid expansion proposed in the bill.