The Department of Information Services (DIS) last week launched a YouTube site for the state. This is part of the state's effort to "incorporate Web 2.0 functionality that helps us expand our public outreach."
Earlier this year DIS put out a Request For Proposal (RFP) to provide the state with "a web search tool that assists with strengthening the relationship between lawmakers and their constituents by maximizing transparency of the work of government."
This effort is continuing but may run into budget pressures due to the state's fiscal outlook.
In the meantime the state's new searchable budget website is scheduled to go live next month. I had the opportunity to see a demo of the site and am happy to report it won't disappoint. We're encouraging the Governor's GMAP Office and the Office of Financial Management to enhance their websites to mimic the functionality of the pending searchable budget website. (WPC letters here and here)
It looks like the Governor has also caught the Web 2.0 bug; her office launched a redesigned website last week. The Governor noted in a press release:
“To be effective and responsive, state government must stay in tune with changing technologies. This new Web site provides opportunities for Washingtonians to easily find the information they need about how the governor’s office works on their behalf and readily provide feedback.”
After failing to pass a $25 billion bailout of the auto industry, Congress is now asking for a business plan so they know how the money will be spent.
"Until they show us the plan, we cannot show them the money," Speaker Nancy Pelosi, D-Calif., said at a hastily called news conference in the Capitol.
This wasn't part of the original request, but now Congress feels they need an indication of what the money will be used for. What is interesting is that they think they can be a better judge of a future business plan than auto industry execs. They have no experience in this area but since they are elected, they feel that such things are in their purview. Not that the current execs are doing well, but when facing a difficult and complex problem turning to people who have less experience and understanding (and less personal financial stake) isn't typically a good solution.
This is, of course, the problem with government involvement in business -- once the "public" has a stake, these businesses must answer to the "public" interest, whether that makes sense or not.
What might Congress decide is in the "public" interest? Here's the LA Times' idea:
If the US government—on behalf of the people—is going to spend considerable sums of public money and incur public debt to keep these institutions alive, let's insist on returns that benefit society as a whole, not merely Big Three shareholders, management, and employees. What might these public benefits be? Well, for one, isn't it time for Detroit to turn out a car that gets at least 100 miles per gallon—and to do it in three years?
Apparently the Times and the Congressional leadership believe changing the laws of physics is as easy as changing the law. It is worth considering that the LA Times editors expertise in engineering is why they work in the newspaper industry. Perhaps we should demand that the car can fly too.
All of this reminds me of a passage from one of my favorite books, Magnetic Mountain by Stephen Kotkin. He writes of another government effort to plan an industry without an understanding of the industry itself:
Some sense of the unreality of the situation can be gleaned from the fact that although there was little sense of how to design such a steel plant, a conference was convened on the time frame for the completion of the factory's construction. The debate proceeded over two alternatives, five years or seven years. [One planner] felt that building the factory within five years would constitute a miracle, but an official informed him that three and a half years was "all the party could afford." The pronouncement was followed by a temporary suspension of the discussion. When discussion resumed, the options had been reduced to either six years or three.
As poorly as the Big Three have done, what makes Congress think they have the ability to make better decisions given their lack of experience and knowledge about the auto industry, especially if they try to do so while simultaneously serving the "public interest" by adding unreasonable mandates and goals? Why will it turn out any differently than the story above?
The front page in today's Seattle Times has an article on the transportation budget and how lawmakers suggest "the bad economy won't stop" projects. Consider this quote from the article:
"We're not impacted by the shortfall in the operating budget," said Rep. Judy Clibborn, D-Mercer Island, chair of the House Transportation Committee. "Our projects are moving forward as scheduled."
Actually, the Office of Financial Management recently released its quarterly revenue forecast
for the transportation budget. It shows that over the next 16 year
construction horizon, (an important time frame for the Nickel and TPA
gas tax projects) transportation revenues are $1.352 billion lower than
projected from the baseline, which was updated during the 2008
legislative session. And this does not yet include the labor and
material cost increases that are expected to drive the shortfall even
And the suggestion that transportation projects are "moving forward" is not true. Earlier this year, we released a study, Despite Claims, Gas Tax Projects Are Not on Track, that shows how the legislature delayed several Nickel and TPA projects so far beyond their original completion dates that you have to wonder whether they will be completed at all, especially with the Nickel is scheduled to sunset.
But after bridging $3.8 billion, the Legislature is probably out of
tricks. They will either have to outright cancel some projects or fund
them from a different revenue source, like the general fund. Both of
which are highly controversial.
Given the $5 billion general fund deficit and the $1.3 billion revenue shortfall in the transportation budget, transportation projects are in trouble.
The Washington State Auditor’s Office is revamping its Web site, www.sao.wa.gov. We are asking citizens, audit clients and interested parties to provide feedback on the usability of our existing Web site and suggestions for our new Web site. The brief survey is available at http://www.surveymonkey.com/s.aspx?sm=4rnLG0uBAXDY8uaa9S11hg_3d_3d and closes at 5 p.m. on Dec. 4. Thank you for your time and assistance in improving the Washington State Auditor’s Web site.
Though the shock of yesterday's revenue forecast will not soon fade a great opportunity is at hand if lawmakers will rise to the occasion. The unsustainable spending growth of the past is being brought back to reality by the economy. If state officials respond by enacting a meaningful constitutional spending limit next year we may be able to avoid future headlines of multi-billion dollar deficits.
Consider what may have been had I-601, the 1993 voter-approved spending limit, not been eviscerated by lawmakers in 2005. During I-601's heyday (1993-2005), state spending growth averaged just under 8 percent per budget. Assuming an even more liberal 10 percent budget growth since 2005, state spending today would be $1.2 billion lower.
Projected General Fund State spending based on 10 percent growth since 2005 (Dollars in Millions)
Actual General Fund State spending growth since 2005 (Dollars in Millions)
The Big Three have spent the last few days asking for an additional $25 billion in federal money on top of the $25 billion they got earlier this year to re-tool their factories. The irony is that many of the same people advocating the bailout are also the ones trying to kill automobiles.
Those on the left argue that the Big Three are too big to fail and that allowing them to go bankrupt would cause economic hardship. Robert Tracinski of Real Clear Markets finds this gem of a quote that sums up the position of many arguing for the bailout:
Susan Helper, a professor of "regional economic development" at Case Western Reserve University tells the New York Times "From a social point of view, even if GM is not providing a return on investment, it is still providing a lot of good jobs."
The problem is that while we're looking to spend $25 billion to save the auto industry, we're also taking steps to kill the auto industry -- $22 billion just for Sound Transit in the Puget Sound. Let's be clear that the goal is not simply to increase options but, in fact, to force people out of their cars.
For example, when I told the Seattle P-I that to effectively reduce CO2emissions from cars we needed to focus on improving the fuel efficiency of cars rather than mandating behavioral change to reduce vehicle miles traveled (VMT), I received a sharp rebuke. Doug Howell of the National Wildlife Federation accused me of relying on "miracles," saying:
There are two fundamental ways to reduce global warming pollution from transportation: cleaner vehicles and fewer of them. Transportation is nearly half our pollution problem. Cleaner vehicles and fuels can reduce much of the problem. But no matter how we do the math, there is no way for Washington to reach its climate goals without reductions in VMT. This argument holds true for Hummers and hybrids. The bonus: Strategies to reduce VMT also create efficiencies that benefit commuters and businesses.
Put simply, unless we force people out of their cars, we'll never achieve the CO2 reductions we want. I think Doug is simply wrong because 1) he underestimates the pace of technological change and 2) he overestimates the ability of government to force people to change their behavior (witness the fiasco known as the Seattle "Car Free Days" program). There are a couple of other fundamental problems with that view, but I'll leave it there for now.
The Sightline Institute, an ideological traveler of the National Wildlife Federation notes that there is an additional inconvenient truth: forcing reductions in VMT means, fundamentally, getting the poor off the road so the rich can cruise. In discussing comprehensive road tolling to get people off the road they note that:
The "losers" would include people priced off the roadway—folks who’d prefer to drive, but can’t afford to—as well as those who would keep on driving, but pay more in tolls than they receive in time benefits.
There is one problem with this logic. If someone is continuing to drive even when they pay more in tolls, they are deciding that, in fact, they are receiving more in time benefits than the cost of tolls. The "cost" of something varies from person to person. The concept that there is a single true cost of something is emblematic of a viewpoint that believes government can calculate and impose the best strategy.
In the end, the logic of these activities is that we need to spend $25 billion to save an industry that we are spending $22 billion locally to kill and the result will be to allow the rich (driving big cars) more space to drive the open road.
"We need to put people to work here in the state of
Washington," said Sen. Mary Margaret Haugen, D-Camano Island, chairwoman
of the Senate Transportation Committee. "If we're going to create jobs we
ought to be doing it right here. I'd rather be putting people to work than
paying out unemployment."
Except, taxpayers don't pay taxes to create jobs--Taxpayers pay taxes to fund vital public services. Given that the newly projected general fund budget deficit is about $5 billion and the
anticipated shortfall in transportation revenues is currently $1.4 billion, it's unlikely the state will have any additional money to give the contract to build the Port Townsend-Keystone ferries to Todd Shipyards.
When the desire to spend public resources on functions that do not belong to government threatens those functions that do, taxpayers end up with neither.
Today's headlines will likely read: "State revenue down $1.9 billion." This is the news coming out of the state revenue forecast. What is important to remember, however, is despite this decrease, revenue is still projected to grow by 5% in the next budget cycle and revenues are still expected to be higher in the current budget than the past. This fact is demonstrated in the table below.
General Fund State Revenue Growth (Dollars in Millions)
Source: Washington State Economic and Revenue Forecast Council
This does not mean the state isn't facing a real problem. The reduced revenue growth for the current budget means that the state is now facing a potential $413 million cash deficit due to the spending levels adopted (not including budget reserve account).
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 . . .
With today's economic news, now is the time for Washingtonians to become actively involved and offer their recommendations to state officials on how to build a sustainable core function focused budget.
Often, spending transportation taxes is tied to agendas that don't have any relationship to specific performance measures, like congestion relief. This concept was highlighted in an audit conducted by the Washington State Auditor's Office.
Across the country, spending is too often tied to political agendas and
the wishes of influential constituencies, not objective measures of public
need, such as safety and congestion relief.
As policymakers look at
maintaining and expanding transportation infrastructure, they need to make
decisions based on proven, meaningful benchmarks. Otherwise, as we have seen in Washington State, the spending may not
have any relationship to the one solution taxpayers want most: congestion
In a message few in D.C. thought they'd hear, South Carolina Governor Mark Sanford is telling the federal government NOT to bail out the states. Here is an excerpt from Sanford's Wall Street Journal op-ed:
I find myself in a lonely position. While many states and local governments are lining up for a bailout from Congress, I went to Washington recently to oppose such bailouts. I may be the only governor to do so.
But I suspect I'm not entirely alone, as there are a lot of taxpayers who aren't pleased with Christmas coming early for politicians. And I hope these taxpayers make their voices heard before Democrats load up the next bailout train for states with budget deficits . . .
In 2008 bailouts became the first resort. Over the past year the federal government has committed itself to $2.3 trillion (including the tax rebate "stimulus" checks of last February) to "improve" the economy. I don't see how another $150 billion now will make a difference in a global slowdown. We've already unloaded truckloads of sugar in a vain attempt to sweeten a lake. Tossing in a Twinkie will not make the difference.
However, there is something Congress can do: free states from federal mandates. South Carolina will spend about $425 million next year meeting federal unfunded mandates. The increase in the minimum wage alone will cost the state $2.6 million and meeting Homeland Security's REAL ID requirements will cost $8.9 million.
The following report compiles individual Priorities of Government (POG) Result Team priorities for state activities. These Result Teams of agency, OFM and other executive staff were charged with making choices based solely the activity performance and alignment with evidenced-based strategies for achieving each of the ten statewide results.
This information is advisory to the Governor as she develops her 2009-11 budget for the state. It does not represent any final budget decisions.
I haven't had a chance to digest the information yet but here is a sampling of the "low" priorities identified:
Early Learning Programs
National Board for Professional Teaching Standards
Student Achievement Fund
Rail Passenger Operations
Public Transportation - Congestion Mitigation and Transit Efficiency
Roadside and Landscape Maintenance
Health Insurance - Adults between 100-200% of poverty level
At a very lively meeting of the state's Sunshine Committee today, the members adopted a recommendation concerning public record exemptions for "work product" and "attorney-client privilege." By a 7-3 vote, the members approved the following resolution submitted by Ken Bunting:
BE IT RESOLVED THAT: It is the sense and intent of this committee that the state of applicable law in Washington state, on the attorney-client privilege and the work-product rule as they relate to open government matters, should be essentially what it was before the state Supreme Court’s 2004 Hangartner ruling and its 2007 Soter ruling.
Next step is for the Legislature to weigh in on this contentious issue.
In other open government news, the 21st Century Right to Know Coalition (WPC is a member) released today its recommendations to President-elect Obama on how to improve federal government transparency. As noted by OMB Watch:
As President-elect Obama's transition team gets to work, OMB Watch has teamed with dozens of organizations and individuals to provide key recommendations on government openness, reform of the regulatory process, and government performance issues. Started well before the 2008 elections, the projects that produced these recommendations brought together diverse groups of people to work on some of the most pressing problems and concerns that will face Obama when he takes office in January 2009.
OMB Watch convened a group of hundreds of individuals and organizations from across the political spectrum to put together recommendations on government openness, information, and other transparency issues. The recommendations stress the need for the Obama administration and Congress to move the federal government's information disclosure and sharing policies and processes into the 21st century, which includes the efficient, effective use of modern Internet technologies. The recommendations fall into three categories: National Security and Secrecy; Usability of Information; and Creating a Government Environment for Transparency. The group has also lifted up a number of the recommendations as issues the Obama administration should tackle during its first 100 days.
Based on this editorial by Port Commissioner John Creighton and Port CEO Tay Yoshitani, taxpayers in King County might think the Port of Seattle is making the tough and responsible financial decisions required in a tough economic climate. They even say this:
In response, we're tightening our belt throughout the port, cutting
overhead spending, leaving some chairs empty and deferring certain
projects. But we must continue to invest in projects that generate jobs
and help the port thrive in a fiercely competitive global market.
The Port of Seattle thinks the best way to get the economy moving again is to make the cost of owning a home more expensive. This seems to contradict the state's plan to make home ownership less costly.
Further, over half of the Port's tax revenue will go toward paying for past financial obligations. Given the Port of Seattle's recent audit history, the tax increase is more of a bailout, rather than an economic stimulus.
Back in June there was a lot of angst about oil prices and the fault was laid at the feet of "speculators" who some accused of driving prices up. Here is what New Jersey Governor and Obama ally Jon Corzine said at the time:
"I think everyone believes there's too much speculation in the oil markets," said New Jersey Gov. Jon Corzine, an Obama ally who announced the proposals in a conference call with reporters. "A lot of the price of oil, I think, people put at the doorstep of speculators bidding up and holding supplies off the market."
Oil prices have fallen from $145 to $60 a barrel in six months, the fastest decline in history. Without government regulation.
Back in June I wrote that such government regulation would be risky and that I had more faith in consumers and oil purchasers to find the proper price because "speculators risk their own money." Those who bought oil at $140, or more, a barrel are not very happy right now. Consumers reduced their demand, oil consumption fell, oil purchasers became nervous about being overextended and prices fell.
During a campaign it is understandable that candidates would pander, promising to solve the issue du jour with resolute government action. The case of oil "speculation," however should be an object lesson to politicians who jump at the chance to add permanent and costly government regulation rather than allowing the aggregated decisions of millions of people to adjust prices.
The ultimate irony, however, is that Obama's supporters who wanted to crack down on speculators because of the oil price spike will now lament that cheap oil is encouraging people to drive more. Don't be surprised when those same folks call for an increase in gas prices to fight climate change.