Initiative 960, The Taxpayer Protection Act, loomed large this session as some lawmakers proposed but ultimately failed to adopt any of their tax increase bills. Adopted by the voters in 2007, I-960 (among other things) re-affirmed state law requiring state tax increases be adopted with a two-thirds vote in the Legislature. This threshold proved too high a hurdle for proponents of tax increases to overcome. As a result at least one State Senator has already gone on the record signaling her intention to repeal the law.
TVW's Inside Olympia has the scoop in this video interview with Senator Jeanne Kohl-Welles (D-Seattle):
This coming Monday, May 11th, marks the opening of the 3rd Annual Tech Policy Summit. This years' Summit will consist of panels on everything from broadband innovation to federal stimulus funding for technology infrastructure as well as the future of Internet regulation.
You might ask yourself why a free-market think tank cares about this issue. Well, if you are reading this blog then you may be affected by In!
ternet or telecommunication regulations being debated both nationally and in Washington state. How we access information, how this information is regulated and the convergence of technological innovation and government intervention will play a massive role in determining our society's future -- both from a social (Facebook, etc.) and commercial (Amazon, etc.) aspect. Personal technology and access to that technology has revolutionized how our society functions, brings a new level to government transparency, and it is important we do not lose sight of the potential for even greater growth. Innovation remains the key.
I'll be attending the conference, this year held in San Mateo and blogging about the forums. You can also follow me via Twitter at: @carlgipson, or #tps09.
• Sec 124 (3): Creates a bounty for audit savings to restore performance audit funding – this is a violation of yellow-book standards and the intent of I-900 (budget also raids $29 million from dedicated performance audit account).
• Sec 128 (9): $40,000 for Spanish TV.
• Sec 128 (27): $300,000 is raided from the dedicated Auto Theft prevention account for CTED to “contract with a community group” for community building (organizing).
• Sec 134: $513,000 for Hispanic affairs commission.
• Sec 135: $487,000 for African American affairs commission.
• Sec 141: $3,622,000 (all funds) for Office of Minority and Women Business.
148: $209,323,000 (all funds) for Liquor Control Board. !
• Sec 152: $9,548,000 (all funds) for Public Employment Relations Commission.
• Sec 153: $4,465,000 (all funds) for Department of Archeology and Historic Preservation.
• Sec 155: $117,122,000 (all funds) for state trade and convention center.
• Sec 215: $6,915,000 (all funds) for Human Rights Commission.
• Sec 501: $50,000 for OSPI is “provided solely for developing and disseminating curriculum and other materials documenting women's role in World War II.”
• Sec 619: $6,736,000 (all funds) for state Arts Commiss!
• Sec 620: $5,228,000 for state Historical Society.
• Sec 621: $3,267,000 for Eastern Washington Historical Society.
Here are some other policy decisions from the budget worth keeping an eye on:
• Sec 303 (4): State parks commission “shall actively pursue transferring ownership of state parks to local governments, tribes, or other entities that have expressed an interest in operating the park.” (Report due on 12/1/09)
• Sec 307 (9): Fish and Wildlife “shall dispose of all fixed wing aircraft it currently owns . . . Disposal of the aircraft must occur no later than June 30, 2010.”
• Sec 308 (8): Natural Resources “shall dispose of the King Air aircraft it currently owns. Disposal of the aircraft must occur no later than June 30,!
• Sec 402 (3-4): “The stat!
e patrol shall implement a cost recovery method to fully recover costs for operating the two king air airplanes. Users of the plane, including the state patrol and the governor's office, shall be charged an appropriate amount to cover all operating and maintenance costs of the plane. The state patrol shall report on this method, the rates being charged, total operational expenses, and information regarding usage of the planes to the office of financial management and the appropriate committees of the legislature. The 2010 legislature will review the use of king air planes by the executive branch and the adequacy of funding in this budget regarding maintaining and operating the planes to successfully accomplish their mission.”
• Sec 605 (7): “By September 1, 2009, the state board for community and technical colleges, the higher education coordinating board, and the office of financial management shall review and to the extent necessa!
ry revise current 2009-11 performance measures and targets based on the level of state, tuition, and other resources appropriated or authorized in this act and in the omnibus 2009-11 omnibus capital budget act. The boards and the office of financial management shall additionally develop new performance targets for the 2011-13 and the 2013-15 biennia that will guide and measure the community and technical college system's contributions to achievement of the state's higher education master plan goals.”
• Sec 612 (1): “Within the funds appropriated in this section, the higher education coordinating board shall complete a system design planning project that defines how the current higher education delivery system can be shaped and expanded over the next ten years to best meet the needs of Washington citizens and businesses for high quality and accessible post-secondary education. The board shall propose policies and specific,!
fiscally feasible implementation recommendations to accomplish the goa!
ls established in the 2008 strategic master plan for higher education. The project shall specifically address the roles, missions, and instructional delivery systems both of the existing and of proposed new components of the higher education system; the extent to which specific academic programs should be expanded, consolidated, or discontinued and how that would be accomplished; the utilization of innovative instructional delivery systems and pedagogies to reach both traditional and nontraditional students; and opportunities to consolidate institutional administrative functions. The study recommendations shall also address the proposed location, role, mission, academic program, and governance of any recommended new campus, institution, or university center. During the planning process, the board shall inform and actively involve the chairs from the senate and house of representatives committees on higher education, or their designees. The board shall report the findings an!
d recommendations of this system design planning project to the governor and the appropriate committees of the legislature by December 1, 2009.”
• Sec 906: “The governor shall convene a work group consisting of representatives from the central service agencies and their clients to collaborate on methods for providing commonly needed services to state agencies, including, but not limited to: Human resource management, employee benefits, payroll, accounting, purchasing, information technology, real estate services, facility management, building and grounds maintenance, fleet management, printing services, and office mail distribution. The work group should consider the experience of other states and large organizations and should identify opportunities to improve service delivery and reduce costs, including, but not limited to: (1) Simplifying processes and gaining efficiencies; (2) Using a shared, common service model;(3) Centralizing se!
rvices or activities which may lead to consolidating or eliminating exi!
sting programs or state agencies; and (4) Revising agencies' authority or governance structures. The work group shall submit a proposal that improves the delivery of central services to state agencies, including changes to the current governance structure, organizational changes that improves and simplifies service delivery, and any statutory changes that may be necessary to the governor by October 1, 2009.”
• Sec 912: “As a management tool to reduce costs and make more effective use of resources, while improving employee productivity and morale, agencies may implement a voluntary retirement, separation, and/or downshifting incentive program that is cost neutral or results in cost savings over a two year period following the commencement of the program, provided that such a program is approved by the director of financial management . . . Agencies are required to submit a report by June 30, 2011, to the legislature and the office of!
financial management on the outcome of their approved incentive program. The report should include information on the details of the program including resulting service delivery changes, agency efficiencies, the cost of the incentive per participant, the total cost to the state, and the projected or actual net dollar savings over the 2009-11 biennium.”
In my previous post, I provided statewide school personnel numbers, to illustrate that our schools employ many employees (over half the total of 104,000 employees) who are not frontline classroom teachers.Even so, school districts are reporting that class sizes may have to increase because of teacher layoffs required by I-728 reductions.
This situation clearly illustrates what is wrong with school funding:local school managers, principals, have no control over their budgets. Principals receive staff from the school district, and are forced to run their schools with the staff that legislators and school district bureaucrats have decided meet school needs.In addition, principals are unable to reallocate staff and resources from outside the classroom to inside the classroom, so as to minimize the impact on student learning from reductions to hoped-for spending and the vicissitudes of the economy.
It is important to first point out that spending on public schools is increasing by 3%:from $15.16 billion in 2007-9 spending to $15.65 billion in the 2009-11 just- passed budget, propped up by nearly $ 1 billion in federal stimulus dollars.But even so, classroom teachers may be cut.
School districts receive funding based on fixed, inflexible staffing ratios (so many teachers and non-teachers per thousand students) and for spending programs based on categories (special education, vocational ed, compensatory education, transportation and others).Teachers and non-teachers are hired based on these legislative mandates and categorical spending streams, not based upon rational decision-making by a school principal.And when state tax revenues level off, requiring reductions to spending on unfunded initiatives like I-728 (class size reductions, extended learning for students, professional development for teachers and other purposes), school districts cannot easily s!
hift money from one silo of spending to another.So unfunded initiatives such as I-728 and I-732 (teacher pay increases) are the first to go, even if these programs can be shown to improve student learning.
Notice that the principals of our schools are nowhere to be seen in this discussion of cutting classroom teachers.This is so, even though the principal is the key person at a school in the position to evaluate and assess the contribution, effort and value of every public school employee, and to determine which staff members are critical to the mission of the schools and which are not.This is true even though he is the only manager who knows the name of every school employee and knows most intimately the needs of his school’s students.
This must change if we are serious about reforming our schools to meet the challenges of the future.We must put the principal in charge of his budget.If he or she is not up to the task, they must be trained to do so, or be removed from this key leadership role.
Imagine what could happen with a principal transformed from building-manager status to genuine instructional leader.A principal may, in his judgment, decide that instead of having a nurse on staff, students at his school are better served with two extra math tutors, or a social worker, or another classroom teacher.A principal may, in his judgment, wish to pay a bonus so that his most effective math teacher remains at the school in the classroom, teaching kids.A principal may decide that students need to go to summer school so as to retain learning gains, and provide teachers for that purpose.
Only the local school principal with the authority and power to act as an instructional leader can best decide how to deploy resources to create the best possible learning environments for the children at his particular school.Only a local school principal can determine whether the school district has sent too many “teaching support” or “educational staff associates” to “help out” at the school.My previous post reveals the numbers of such personnel on the payroll.
Schools, driven by legislative mandates and ruled by central school district bureaucrats stymied by legislative mandates, can instead lay off only the most recently hired and those hired with I-728 funding, regardless of their beneficial effects on student learning.
For those on Twitter, you can follow the Environmental Center @WAPolicyGreen.
We've noted the repeated failure of government to pick and choose correct "green" technologies as politicians work against economics and the wishes of people. Ecofads too often substitute for sound policy. The Seattle Weekly highlights one more example.
In "King County's 'Green Cab' Experiment Goes South," the Weekly notes that effort to get more "green" cabs in the county is now falling apart because the County ignored economic realities. In granting the green cab company special preferences, they also added some other rules:
"...the company is obliged to operate differently than other cab companies. Most cabbies are self-employed. They either own a license or lease a taxi from someone who owns one. But the county, trying to ensure that drivers could earn a living wage and benefits without being subject to the whims of license owners, mandated that the new company be run according to a traditional employer-employee relationship. Green Cab would pay drivers regular salaries and allow them the opportunity to unionize.
"But many drivers like the independence of working for themselves. And Green Cab can only afford to pay $8 or $9 an hour, Aboye says, whereas non-employee drivers in the region average $10.50 an hour (without benefits), according to a recent Seattle survey. Unable to recruit drivers under those conditions, Aboye says he and other Green Cab owners are driving the taxis themselves, rather than hiring others to take the wheel. Right now, only 18 Green Cabs are on the road, even though the county was prepared to issue 50 licenses."
Ignoring economic realities and imposing rules on people that they don't want is a recipe for failure. This is just the latest example. The result is that King County doesn't have "green" cabs and they've killed jobs.
“Disposing of this asset in the face of more wildfires and climate-change-related storms is the opposite direction that the state should be headed with its emergency-response infrastructure,” agency spokesman Aaron Toso said.
Two problems. First, the plane in question isn't an air tanker. It is an executive aircraft that is not part of the "emergency-response infrastructure" in any real sense.
"As an environmental scientist, I am frustrated by the poor information distributed by public officials, the media and others regarding the current and predicted frequency of extreme weather events. It is time for the scientific community to set the record straight. ... How many times have you heard that severe windstorms and heavy rains will increase in the Northwest under global climate change? The truth is, there is no strong evidence for these claims and the whole matter is being actively researched. Some portions of the Northwest have had more rain and wind during the past decades, some less. And initial simulations of future Northwest climate do not suggest heavier rain events."
Those who want to use climate change to support particular policies often claim that we must "follow the science." When there is a conflict between their desired policy and the science, however, they are quick to distort the science or ignore it altogether.
Though the forecast for the state's Sunshine Committee was dark and stormy during the 2009 Legislative Session, it still exists and will meet on May 12. Charged with reviewing the hundreds of exemptions to the state's public records law, the Sunshine Committee was targeted for elimination under several bills considered this year. Up until the last day of session it was unclear if any of these bills would pass. Since none did the Sunshine Committee is now free to continue its important work.
Committee recommends that the legislature eliminate the Legislative
exemption, which excludes from public scrutiny personal records of the
legislature, including e-mails, correspondence, except when designated
as a public record by a “official action of the Senate or House of
Representatives.” Every other legislative body in the state of
Washington is fully subject to the public records act. There is no
principled reason why the state legislature should be exempt.
If adopted by the committee, this change would address the Legislature's double standard when it comes to compliance with the public records law.
Another proposal of note is a recommendation to sunset all exemptions to the public records act after two years unless the Legislature reauthorizes them. This resolution is being offered by committee member Patience Rogge:
Be it Resolved that it is the sense of this committee that all
exemptions to the Public Records Act and any statutory basis to
withhold information or records be eliminated after two years unless
specifically reauthorized by the Legislature with the exception of
those ten included in the original legislation; and that the
Legislature examine all of the eliminated exemptions individually, and
Further, that all future exemptions be limited to a term of two years
and be examined by the Legislature upon their expiration on a case by
case basis to determine if they merit reauthorization or should be
eliminated or revised.
In my oped in yesterday's Seattle Times, I said this:
Stray electrical currents are common with light-rail systems and
might cause damage to surrounding buildings, infrastructure and in this
case, the steel components of the bridge. Sound Transit would be on the
hook for these added costs.
Even though this was a very minor point in my article, there were a lot of questions...whether stray electrical currents are common with light rail systems and whether they can cause damage.
First of all, stray currents exist on every electrified light rail system. Many transit agencies, including Sound Transit, employ a variety of strategies to control leakage but in the end, it is always present.
In Houston, for example, the Texas Medical Center has been the victim of extensive pipeline corrosion, allegedly caused by the nearby light rail line:
own="return rwt(this,'','','res','24','AFQjCNGhruRDhZgn-6BGngbVJoiW8Eg0bQ','')">Med Center sues Metro over light rail current.
By one estimate, stray current corrosion may cause about $500 billion in damage annually.
As you can see from my two sentences, I did not say that light rail across I-90 will "electrocute the bridge," as this guy claimed. What I did say is that it is common with light rail systems and Sound Transit would have to pay for the added repair costs if it does occur....both of which are 100% true.
There aren't too many states with a gross receipts tax system like Washington's Business and Occupation tax (B&O). But Texas has what is called a "margins tax" that functions somewhat similarly. The Texas margins tax is not an exact apples-to-apples comparison with the B&O tax but it levies a tax on gross receipts that is based upon taxing the value added -- so in reality it is much more like a Value Added Tax (VAT). Unlike Washington, Texas companies can deduct the cost of goods purchased, as well as the cost of employee payroll and benefits.
Similarly to Washington, there is an exemption level. Businesses in Texas with less than $300,000 in total revenue are exempt from paying the margins tax. In Washington state the exemption level is just $28,000.
Yesterday the Texas House of Representatives unanimously passed a !
temporary exemption that, if the Senate concurs, will raise the $300,000 exemption to $1 million during the 2010-2011 biennium. Businesses with under $1 million in total revenue won't have to pay the 1% margins tax (0.5% for retailers/wholesalers). This tax cut would cost the state of Texas $172 million during the next biennium but would not bind future legislatures since the provision sunsets. The tax break is estimated to save 39,000 small businesses on average over $4,300 each.
WPC has long advocated for raising the B&O exemption, particularly for new businesses (read our B&O recommendations). Responsible tax policy means a low tax rate spread across a large tax base, so I'm inclined to perhaps change the Texas proposal towards new businesses. Why? How do we extend the tax base? By encouraging investment and lowering the cost bar!
riers to enter the market. Let's make our state a great st!
ate for new and small businesses by keeping the tax/regulatory cost down for the first few years. It might be a small step but it would be the correct one.
WHEN voters approved extending Sound Transit's system last November,
most people probably thought the controversial battle over light rail
on the Eastside was over.
But the agency did not release its Draft Environmental Impact
Statement (DEIS) on the possible alignment options until after the
November election, so everyone was left to imagine for themselves the
details on where exactly the tracks would lie.
Now, as Sound Transit has released the information showing 19
possible alignment scenarios, businesses, policymakers and neighborhood
groups are lining up with different and competing views on where light
rail should come through Bellevue.
After living through the region's decades-long floundering on
replacing the Alaskan Way Viaduct and the Highway 520 floating bridge,
taxpayers have more than enough reason to doubt this project will be on
time and on budget.
Sound Transit's 19 alignment options are broken into five
service-area segments. Each segment presents its own set of challenges,
but none more than the segment across the Interstate 90 bridge.
Segment A replaces the center lanes across the I-90 bridge with
light rail. Sound Transit officials downplay the negative impact light
rail will have on traffic congestion and underestimate the potential
for significantly higher costs.
Light rail will increase vehicle delay on the bridge by a third during peak commute times.
Stray electrical currents are common with light-rail systems and
might cause damage to surrounding buildings, infrastructure and in this
case, the steel components of the bridge. Sound Transit would be on the
hook for these added costs.
There is also the question of whether Sound Transit (and taxpayers)
will have to pay for taking the center roadway for its own use. Some
estimate the cost could be $1 billion or more.
Making matters worse, Sound Transit wants only the taxpayers on the
Eastside to pay for the connection across Lake Washington, despite the
proportional benefits that light rail brings to Seattle.
Segment B contains five options that connect the line from I-90
through south Bellevue. It could include laying track along Bellevue
Way, an impossible option considering its negative impact on traffic,
or using the old Burlington Northern Santa Fe rail corridor that runs
parallel to I-405.
Segment C through downtown Bellevue could be the most expensive.
With each option reaching past $1 billion, three of the six proposed
routes are tunnels and would cost about twice as much as elevated
These added costs could threaten the link to Redmond (Segment E)
however, which Sound Transit officials already say they cannot fund,
despite promises made to voters and Microsoft during the election and
the 0.5-percent sales tax increase.
Segment D contains four options to reach Overlake, but they each
displace businesses and have environmental concerns with wetland and
habitat impacts, which could lead to higher costs.
All of these issues have the potential to delay light rail to the
Eastside, but none more so than the link across Lake Washington.
Sound Transit may never overcome the technical or funding obstacles
to bring light rail across a floating bridge and as costs continue to
climb and tax revenues fall, other segments and more effective
alignment options are becoming unattainable.
Sound Transit might consider moving forward with the other segments
before crossing I-90. The I-90 corridor between Seattle and Bellevue
already effectively serves transit demand and running light rail over a
lake would bring no additional land-use benefits, population density or
The segment to Redmond must also be completed as promised and Sound
Transit officials should choose an overall alignment scheme that has no
negative impact on traffic congestion.
The voters approved Sound Transit's plan to expand light rail in the
region but as Sound Transit officials move forward with choosing a
preferred alternative, they must do everything possible to help improve
the region's economic recovery by building a system that strengthens
The State Auditor's Office sent Governor Gregoire a letter yesterday
formally requesting that she veto changes in the budget to the
performance audit program. Here is the Auditor's letter in full:
Dear Governor Gregoire:
I am writing to respectfully request your veto of Section 124 (3) of the state operating budget and to encourage you to work with state lawmakers to restore at least $14 million of the $29 million in performance audit funding being taken from the State Auditor's budget over the next two years.
As passed, Section 124 (3) of this budget violates government auditing standards, as explained in the attached letters. This section should be vetoed for that reason alone. Additionally, enacting this budget into law could have far-reaching consequences, such as affecting this state's ability to properly account for billions of dollars in American Recovery and Reinvestment Act money that wil!
l be so important in getting the state's families and economy back on their feet. Comprehensive oversight of these dollars is absolutely critical.
Section 124 (3) also sets up a perverse relationship between our Office and state agencies. Tying our performance audit dollars to actual cost-savings by agencies deeply compromises agencies' perception of our objectivity and independence. Regarding funding for performance audits, I wish to re-emphasize that taking away nearly three-quarters of our budget for that work decimates a program Washington citizens made very clear they wanted when they approved Initiative 900.
The size of the reduction also impedes efforts we agreed to undertake on a statewide performance review that we hope will be another step in bringing about true, meaningful reform of state government. With your advocacy and support, we have been putting together a plan for this review !
and we remain committed to producing recommendations to s!
ave money, to streamline operations and to eliminate duplication and outdated programs.
The $15 million we agreed to have the Legislature sweep from our current performance audit fund balance would have reduced that budget by about 50 percent, but it was similar to fund balance sweeps at other agencies, As passed by the Legislature, the budget reflected a 73 percent cut ($29 million) in our performance audit funds.
We also are disappointed at the Legislature's failure to recognize that our 15 completed audits identified nearly $500 million in cost savings and unnecessary spending for state government alone. Considering the cost to conduct those audits, we have achieved a 10-to-1 return on investment.
We remain committed to helping you provide oversight over the stimulus funding and set state government on a leaner, more effective path for the future and again, request a veto of Section 124 and!
restoration of at least $14 million to our performance audit funding.
BRIAN SONNTAG STATE AUDITOR
Included as attachments were the following letters explaining how the performance audit proviso violates auditing standards:
The Port of Seattle, calling itself "The Green Gateway," touts a recent study finding that shipping from Asia to the Midwest through Seattle produces the fewest carbon emissions. Shipping through Seattle, they argue, is the choice for environmentally conscious shippers.
Their web page talks about their work they've done to make this so. They note that:
The Ports have worked hand-in-hand with the transportation industry, regulatory agencies, community organizations, labor and environmental advocates. That cooperative approach has helped us move farther, faster without adding fees for port users.
So why is it that Seattle is so green? They explain:
Seattle and Tacoma are closer to Asia than any other U.S. port, resulting in shorter ocean transit times and lower fuel consumption on the ocean leg of the journey.
Apparently all of these groups got together and decided to move Seattle closer to Asia. The report also notes that rail lines from Seattle to the Midwest use less fuel per ton of freight.
So, after working with all of these groups and commissioning this study they found something that every person working in a free market should know: prices aggregate a tremendous amount of information and send a clear and accurate signal about the efficient use of resources. Prices are the best aggregators of the many costs, including energy costs, at all stages of the production of a product. If the Port wanted to know which route was the greenest, they needed only look at the price of shipping from Asia through various ports. (This might not be true if there is a monopoly or other regulatory distortions, but that is not the case here.)
When their study was done they found that the route that burned the least fuel, costing shippers the least in fuel costs, was also the greenest. That shouldn't surprise anybody.
If we want sustainability, the market is more likely to give us a clear path than all the various interest groups, each seeking a cut of the pie, combined.
During the peak drive times and in the peak direction, there are 5 lanes of traffic - 3 general purpose lanes and 2 express lanes. Removing the center lanes limits motorists to only the GP lanes. And the result is obvious:
To mitigate this negative impact on traffic, the WSDOT and Sound Transit are adding an additional HOV lane in each direction on the outer roadways. But during the peak commute times, morning-westbound and afternoon-eastbound lane capacity will still be reduced from 5 lanes to 4. And again, the result will be obvious: increased traffic congestion.
The city of Petaluma, California is largely recognized as the first US city to impose artificial limits on growth, which eventually led to today's smart growth movement. In 1972, the city capped building permits at 500 per year. Fast forward to 2009, the city recently dissolved its planning department because there was no longer enough activity to pay for it.