Washington Policy Blog

To stimulate the economy, stop trying to limit driving and start reducing congestion

January 26, 2009 in Blog

I'm often asked how other states compare to Washington on transportation policy. This is a reasonable question, because across our state, traffic congestion is growing worse and is expected to double over the next twenty years. Congestion chokes the economy, robs valuable time from our families and lowers our overall quality of life.

But how do we compare to other states?

My response always mentions Texas because of its early adoption of Public/Private Partnerships and tolling, and its continued spending on infrastructure.

Washington can learn a lot from how the Lone Star State is tackling congestion, increasing personal mobility and, as a result, stimulating economic development.

Good transportation policy incorporates five important principles. Policymakers should implement performance measures like traffic congestion relief or economic development. They should respect people’s freedom of mobility, spend transportation dollars based on mark!
et demand, improve freight mobility and utilize Public/Private Partnerships.

I was pleasantly surprised to learn recently that the goals of policymakers in Texas are remarkably similar.

According to the state's 2009-2013 Strategic Plan, the Texas Department of Transportation’s (TXDOT) goals include (in this order) to Reduce congestion, Enhance safety, Expand economic opportunity, Improve air quality and Preservation.

Believe it or not, traffic congestion relief is not a policy priority in our state. This means there is no obligation or relationship between spending and reducing congestion.

Not only is congestion relief the top priority in Texas, TXDOT backs up its priorities with specific performance measures that hold the department accountable and ultimately strengthens the relationship with spending.

The TXDOT also uses four strategies to accomplish its stated policy goals: They "use all available financial tools to build transpor!
tation projects." They "empower local and regional l!
eaders to solve local and regional transportation problems" and "harness market-based principles to maximize competition, reduce costs, and guide investments." The state also "facilitates consumer-driven decisions that respond to market forces."

Washington policymakers, on the other hand, try to manipulate the market by forcing the public to shift from the roadway to other modes. This demand-side strategy is plainly visible in Washington's new policy to reduce pollution by restricting how much people can drive. State leaders want to reduce how much motorists drive from an average of 31 miles per day, to 22 miles per day, despite technological advances in lowing emissions and improving fuel efficiency. In fact, the transportation sector is the only sector with CO2 emissions in Washington that is actually declining. Never have policymakers been more explicit in their desire to unnecessarily force people away from driving.

Instead of sp!
ending money on infrastructure and services that proportionally support market demand, state leaders in Washington try to shift people from one travel mode to another. This strategy inevitably leads to greater traffic congestion, because government will always fail to control the market in this way. Despite years of higher spending on expanding public transport services, its overall mode share has remained flat for the last three decades, while traffic congestion has risen sharply. The current and proposed trends in transportation spending continue this failed strategy.

Washington policymakers would achieve economically better results if they abandoned social engineering and instead responded to market demand. The economy, motorists, taxpayers, the freight industry, ports and ultimately the general public, will benefit and thank them.

Tell us the truth

January 26, 2009 in Blog

Based on a bill introduced today, at least one Senator feels the need to put into law the requirement that state employees be honest when asked a question by lawmakers. SB 5520 - Requiring agencies to provide truthful information to legislators:

All agency employees must answer completely and honestly any request of the legislature in furtherance of a legislative investigative or oversight purpose.

Though no penalty is set forth for not telling the truth, my best guess is a violation would be considered contempt. 44.16.150 - Punishment for contempt:

Any person being in contempt, as herein before provided, shall be punished by fine in any sum not less than fifty dollars and not exceeding one thousand dollars, or by imprisonment in the!
county jail in the county where such examination is being had, for any period of time not extending beyond the legislative session then being held, or by both such fine and imprisonment, as the legislative body which authorized such examination may order. And in case the contempt arises in a joint proceeding of both houses, or before a joint committee thereof, the senate shall prescribe the penalty.

Sad to think we need a law prescribing truthful government.

A quick and dirty look at some business bills this session

January 23, 2009 in Blog

The 2009 Legislative Session is barely two weeks old but there has been a host of legislation already introduced that could affect the small business community if enacted into law. The Tacoma Business Examiner provides a good overview of businesses' hopes and concerns for the session. In it, I mention that, even though no one wishes that the state is facing a $6 billion shortfall, the lack of money may in fact help shield the business community from policymakers' pet projects -- the ones that usually cost businesses time and money.

A few bills to watch:

  • SB 5042 -- would waive penalties for first time paperwork violations by small businesses
  • SB 5050 -- would increase the small business B&O tax credit
  • HB 1442 -- would exempt small businesses from the B&O tax for one year (up to $125,000 gross)
  • HB 1160 -- Eliminates the paid family leave program, set to start up in October
  • SB 5362 -- Establishes a set minimum wage and decouples the current wage system from the CPI process
  • SB 5243 -- Rule-making by the Department of Labor and Industries is suspended until a mandatory review of current rules
  • HB 1386 -- Restricts the use of workers' compensation funds to just benefits and administering the benefits

Some other interesting legislation:

  • HB 1015 -- Prohibiting the sale of certain novelty lighters
  • HB 1173 -- Providing affordable housing for all
  • SB 5243 -- Requires cell phone service providers to replace any defective handset 
  • SB 5104 -- Fiscal reform in the way of a state income tax

There is also talk of not just bringing back the proposed state paid family leave act, but of expanding it (h/t Adam Wilson). This would be done through a payroll tax.

So, let's get this straight. The Governor and other legislative leaders are proposing "economic stimulus", partly through reduced unemployment insurance premiums, however other legislators are proposing increased  unemployment insurance premiums to help pay for the paid family leave program? Is this a case of one hand not knowing what the other is up to, or just not caring?

Keep track of all this legislation and more with WashingtonVotes.org.

From 470 to 0

January 22, 2009 in Blog

Wow!

Check out HB 1497: Eliminating boards and commissions introduced by Rep. Ross Hunter (D-Medina).

I called Hunter's office to find out which of the state's 470 boards and commissions the bill would eliminate.

The answer: All of them.

While a case can likely be made for keeping a small number of them, this approach is probably the best one to start the conversation on which ones actually add value versus trying to figure out which ones to eliminate.

Last month the Joint Legislative Audit and Review Committee (JLARC) released a pre-audit report reviewing the state's 470 boards and commissions. According to Appendix 2 - Statute Summary: 

The Legislature has declared that boards and commissions have been:
>
• Created in excessive numbers;


Created without legislative review or input and without an assessment
of whether there is a resulting duplication of purpose or process;

• Duplicating duties of existing governmental entities, creating additional expense, and obscuring responsibility; and

• Difficult to control in terms of growth because of the many special interests involved.

This is one way for lawmakers to regain control.

The pain gets worse

January 21, 2009 in Blog

The Seattle Times is now reporting that Washington state's unemployment rate is up to 7.1%. That's getting uncomfortably high, even as recession standards go. It is not uncommon to see slight up ticks in the unemployment rate after the holiday season. Often it is the retail industry off-loading excess holiday help. But the state was already at 6.3% in December.

These are not historically bad numbers, but the Times story does point out a disturbing trend: how fast we got here. According to the Employment Security Department, WA's unemployment rate was a giddy 4.6% just one year ago. At 4.6% policymakers can almost kick up their heels and relax. But at 7.1%? Not so much.

As we plod through this exceedingly sour economic downturn, those thousands of jobs lost across virtually a!
ll sectors of the economy is damaging the state's ability to fund itself. Increasing the cost of doing business, or hiking taxes and fees on those who still have jobs, is not going to help matters.

Look before you spend

January 21, 2009 in Blog

The saying "look before you leap" is very applicable to the legislature when it comes to considering potentially expensive programs. Unfortunately, lawmakers are often left in the poor position of voting on bills before knowing what impact their decision will have on taxpayer's wallets.

Based on a proposal introduced today, it appears a bipartisan group of Representatives are tired of playing this type of spending by Russian Roulette. Consider HB 1458 - Addressing fiscal notes:

Before either house of the legislature may vote on final passage on a bill that if enacted into law would increase state government expenditures or would increase or decrease state government revenues, a fiscal note prepared pursuant to RCW 43.88A.020 must be available on the most recent version of the bill that applies to the bill as it is to be voted upon. In !
no case shall the fiscal note be made available more than seventy-two hours after the bill is placed on final passage.

Perhaps they could call this proposal the "Truth in Spending Act."

Which Way on the Environment for Obama - Advisors or Politics?

January 20, 2009 in Blog

As Barack Obama assumes the Presidency he will begin to deal with the challenge every president ultimately faces: who do they listen to when making key decisions? Much has been made about the advisors he has selected and there is good reason to be pleased. The question is will he listen to them on key issues or will he follow the political winds from interest groups or Capitol Hill?

Cap-and-Trade vs. Carbon Tax
Obama has selected an economic team worthy of praise, but he seems to be going in a different direction from virtually all of his economic team on the key issue of how to address climate change. Virtually all of his advisors from his top economic advisor Larry Summers to the head of the Office of Management and Budget Peter Orzag favor a carbon tax. They note cap-and-trade's many shortcomings, its failure in Europe, high costs and other accounting problems. Unfortunately, Obama is being pressed by environmental groups to favor cap-and-trade. The experts note that given the choice between the two, a carbon tax is more efficient, creates fewer politically-manipulable loopholes and is more transparent. We'll see whether politics trumps the experts.

Precautionary Principle
This is the "heads I win, tails you lose" principle applied by environmentalists to say that when in doubt, they win. We've written about the faulty logic and high costs of the precautionary principle and climate change in the past. Along those lines, Obama named University of Chicago law professor Cass Sunstein to oversee regulatory changes. Sunstein has written extensively about the nonsense of this principle, including an entire book on the issue. He argues that the principle is useless because it leads to contradictory conclusions. (Interestingly, he writes about a common Obama mantra in Laws of Fear, saying "With respect to hope, those who operate gambling casinos and state lotteries are well aware of the underlying mechanisms. They play on people's emotions in the particular sense that they conjure up palpable pictures of victory and easy living.") Sunstein seems to have some unorthodox views on animal rights, but on the precautionary principle he is spot on. Let's hope that when environmentalists come calling for new regulations based on the precautionary principle, he sticks to his guns and Obama listens.

"Please don't raise my pay"

January 20, 2009 in Blog

The Olympian reports today on a hearing of The Washington Citizens' Commission on Salaries for Elected Officials. Not surprisingly a majority of those elected officials testifying asked the Commission to not raise their pay in light of the economic situation. As noted by The Olympian:

Testimony before a state citizen salary commission blew like a headwind this morning against giving pay increases this year to state elected officials, judges or legislators.

New state Treasurer Jim McIntire, a Democrat, testified against giving raises, saying increases would put lawmakers — and others poised to freeze the pay of state employees and K-12 teachers — in a tough position. He urged commissioners not to raise pay.

Two other Democrats, Gov. Chris Gregoire and new Commissioner of Public Lands Peter Goldmark, both sent letters to!
the commission arguing against raises. Gregoire wrote that she recognized the difficulty of balancing fair salaries against public opinion.

Rather than force elected officials to beg a commission to not raise their pay, an alternative may be eliminating the Salaries Commission and restoring this conversation to the legislature. Such a change would also have a positive impact on the state's budget.

Consider the fact the Governor's 2009-11 budget provides $395,000 for the Commission's activities.

Ecofads and the Economy in 2009

January 18, 2009 in Blog

This year the World Economic Forum is holding a contest on YouTube, inviting people to answer one of four questions about the state of the world in 2009. The question I answered is "Will the environment lose out to the economy in 2009?" I answer "no," but you'll have to watch to find out why.

The topic of my video fits with one of the five elements in our "Agenda for Effective Environmental Stewardship" we are presenting to the legislature. We call for a more aggressive effort to remove barriers to salmon habitat on Department of Transportation projects.

After you watch it, go to the YouTube page and rate it. I am simply looking for feedback and this is in no way related to the fact that those with good videos and strong ratings may be flown to Switzerland to attend the conference. I deny that categorically.

Passing the budget test

January 15, 2009 in Blog

When preparing for an important test you should:

A) show up 20 min before the test and wing it;

B) look over a friend's notes on the way to the classroom and hope for the best; or

C) calmly and diligently spend time before the test to prepare? 

Now remember the question is what should you do not what do you do. The obvious answer is C).

Unfortunately when it comes to legislative budget proposals, lawmakers and the public are often forced to do either A) or B).

One way to address this problem is with a "budget timeout" before public hearings or votes could occur on legislative spending proposals. This is a concept supported by Congressman Brian Baird. It also appears state lawmakers recognize the need to provide more time to learn the details on budget proposals !
before action is taken.

Consider the introduction today of SB 5186: Establishing a period of public and legislative review of appropriations legislation:

The legislature finds that approval of the state budget is among the most important acts of the legislature in any year, and that the public is entitled to a reasonable opportunity to learn how public funds are proposed to be expended before bills making appropriations become law. The legislature further finds that public notice, dissemination of information, and informed analysis of proposed budgets is an essential requisite of transparent, accountable government.

Omnibus appropriations bills frequently have been acted on by the legislature in a manner that has afforded little opportunity for public review and information about proposed expenditures, or for members of the legislature to !
deliberate upon proposed appropriations in an informed and con!
scientious manner. The legislature finds this practice has weakened the performance of the legislature in its stewardship of public funds, and reduced public trust in government. The legislature finds that many other states, in their constitutions, statutes, or legislative rules, require an opportunity for public and legislative review of budget legislation.

The legislature therefore finds it in the public interest to provide for an appropriate period of public and legislative review of all omnibus appropriations bills before they are acted on by the legislature and submitted to the governor for approval . . . An omnibus operating, capital, or transportation appropriations bill, or proposed substitute, striking amendment, or conference committee report thereon, must be made publicly available to the members of the legislature and the public at least three calendar days before such a bill may be voted on by the senate or the house of representatives.

/div>

What do you think? Step in the right direction?

Here are some resources on the topic:

Waiting Periods for Fiscal Bills

Lawmakers Need a 72 Hour Budget Timeout

League of Education Voters gives taxpayers a D+

January 15, 2009 in Blog

Today the League of Education Voters released its 2009 Citizens' Report Card, which compiles many sobering statistics about the mediocre to poor performance of Washington's public schools. These statistics correctly show how our schools are failing to prepare our K-12 students for college and the workplace. 

The report card, however, gives taxpayers a "D+" for school funding.  The Seattle Times says, citing the LEV report, that the "state's per-pupil spending continues to decline."   This is wrong.  Per student education spending is increasing.

The facts are that Washington taxpayers are generously paying for public education, and have increased per pupil spending in excess of inflation with each biennium.  Take a look at this graph from the Senate Ways and Means Committee:

School graph

Education spending has almost tripled since 1980, and increased by 29% since 2004.  Taxpayers provide approximately $9500 per pupil, more now than ever in the history of the state.  And smaller families means there are more taxpayers today compared to the number of students.

Taxpayers are providing the schools with ample funding.  At the same time, only 59 cents of every education dollar makes it to the classroom. Less than half of public education employees are classroom teachers.

Education reformers need to face the reality that in public education it is not the amount of money, but the way we spend the ample money provided by taxpayers, which needs to change.  This is well demonstrated in "Getting down to Facts" from Stanford University at http://irepp.stanford.edu/projects/cafinance.htm.  Otherwise, we will simply pay a lot more for the same poor academic results. 

The League of Education Voters is insulting hardworking taxpayers, instead of thanking them for supporting public schools.

Governor: Reform state government to bring it into the 21st century

January 14, 2009 in Blog

Today Governor Gregoire delivered her second inaugural address. The section of her speech on government reform was music to my ears:

And one thing we have to do together is reform state government to
bring it into the 21st century, and soon. At very basic levels,
businesses are struggling to reform, to change the way they do business because they
simply must to survive. And our business leaders tell me that American
companies, large and small, will emerge from this recession forever
changed.

We have to do the same. And that’s government reform.

This is our chance to reform state government to make it a more nimble and relevant partner in a new state economy.

Ladies and gentlemen, we need to reboot!

Over the decades, state government has evolved — layer upon layer upon
layer. But too much of what served the people well in 1940 or 1960 or
1990 does not serve the people well in the 21st century.

There are sacred cows standing in the way. There are political
roadblocks. But let’s step up to the challenge for the people who sent
us here. For example, we have some 470 separate boards and commissions
across numerous agencies.

Is there anybody in this chamber, or this state, who believes we need
any more than half of 470 boards and commissions to serve the people of
Washington? There are almost 60 involved with the Department of Social
and Health Services alone.

And that’s not the only issue we face. For instance, we have three
agencies managing natural resources, each with its own scientist
standing in the same Washington stream.

We need to reform, and we will.

We need a lean, nimble state government serving our people in the 21st century.

We know we can do it because in some cases we already have.

Today, almost 40 percent of license tabs are renewed online, saving hassles and gas.

We can close 26 licensing offices across the state while extending
hours of operation at the 10 most popular locations. We are finding new
ways to serve our customers. And customer service is what it’s all
about.

Today, 18,000 full-time students at our community and technical
colleges are earning course credits online. It would take an additional
four community colleges to offer all those classes the old-fashioned
way.

Thousands of people go online to check the balance on their food stamp
debit card. And more than half of small business owners are filing
their state taxes online.

I ask you, if we can serve our motorists, our businesses, our students
and our poor with 21st century technology, why can’t we serve all
citizens in ways that are more convenient for them, and cheaper and
more effective for government?

The answer is, we can. The answer is, we will!

I’m putting the finishing touches on a package of reforms for you to
consider this session. I’m asking you to act on them this year. It will
take courage.

But the time has come to put our sacred cows out to pasture forever.

I can’t reform government all by myself. For starters, I’ve asked
Auditor Sonntag to help us figure out ways to sunset boards and
commissions and to help us establish a 21st century way of doing
business.

I am also partnering with business and labor, state employees, citizens, and you, to get the job done.

We need to make sure we have a government for the 21st century so our
workers and businesses can compete with anyone in the world.

I couldn't agree more.

No more state Sunshine Committee?

January 14, 2009 in Blog

With the 2009 Session less than a week old numerous open government bills have already been introduced. Not all of them will be greeted with open arms by the state's defenders of the people's right to know. Perhaps the most surprising proposal is SB 5119: Eliminating the public exemptions accountability committee.

This proposal would repeal a 2007 law creating the state Sunshine Committee. According to the Attorney General's Office:

Voters approved the Public Disclosure Act by initiative in 1972. At the time, the act included only 10 exemptions from disclosure. Today, there are at least 300 exemptions (provided by Legislative staff).

Attorney General Rob McKenna requested a bill during the 2007 Legislative session to establish a Blue-Ribbon Committee to review all!
exemptions to the Public Disclosure Act on an annual basis. State Bill 5435 became law on July 22, 2007 creating the Public Records Exemptions Accountability Committee. The "Sunshine Committee" will make recommendations to repeal or amend exemptions to the Public Records Act.

According to SB 5119, however:

. . . the legislature finds the committee's review of exemptions has proven to be unproductive and, given the economic climate we are currently experiencing, it is an unnecessary and wasteful expenditure of time and resources. Additionally, the legislature finds that the committee has not acted efficiently or effectively in carrying out its mandated charge and has provided, at most, limited guidance to the legislature. Therefore the legislature concludes that the continuation of the public records exemptions accountability committee does not serve the public interest.

Another propos!
al likely to cause the open government community heartburn is !
SB 5130: Regarding prisoner access to public records.

Other proposals to keep an eye on:

Here are the Washington Policy Center's recommendations for open government reforms from our Policy Guide:

  1. Create a Public Records Ombudsman authorized to enforce the Public Records Act.
  2. Clarify the use of the attorney client-privilege exemption.
  3. Create criminal penalties for willful violation of the Public Records Act. 
  4. Require audio taping of executive sessions. 
  5. The legislature should make itself subject to the Public Records Act and Open Public Meetings Act. 
  6. Adopt a constitutional amendment placing the preamble of the Public Records Act into the constitution, and require a 60 percent vote of lawmakers to enact a new exemption from disclosure to take effect.

Property tax transparency

January 12, 2009 in Blog

The 2009 Legislative Session is officially underway. If the first day is any indication, it appears property taxes will receive their fair share of attention with numerous bills introduced to reform the way property taxes are calculated and raised. One of the more interesting proposals is HB 1057.

Under the simple description of "Relating to ballot title information," HB 1057 reads (in-part):

If the referendum or question relates to a property tax levy, the ballot title must include a comparison of the aggregate financial impact between the taxing district's levy, if any, in the immediately preceding year and the current ballot, in both dollar and percentage change terms. Ballot questions under RCW 84.55.050 must include an estimate of the financial impact in the first year of the levy increase as compared to the taxing district's last levy, in bot!
h dollar and percentage terms.

Translation: Property tax ballot measures would need to provide context for the cost of passage.

Reading this bill I immediately thought of WPC's proposal for a tax transparency website to help provide citizens details on the various taxing districts they are subject to.

Additional details here:
Taxation Disclosure Act
What taxes we pay: People's database
State revenue flow requires transparency

Economic Stimulus for the Rest of Us

January 12, 2009 in Blog

A great op-ed today in the Seattle Times from a small business owner who is asking that small businesses not be left behind as policymakers talk about stimulating the economy. They are not asking to be bailed out or for special concessions. Small businesses are struggling right along side the banks and automakers that are asking for handouts but small businesses do not have the clout to receive bailout packages. Nor do they want them.

Instead, most are asking that rules, regulations and taxes be taken a look at and reduced when feasible -- anything to make the cost of running a business a little less. When the cost of business goes down, there is more left over for retaining employees, holding on to critical benefits, or expanding productivity -- good for both the consumer and the employee.

At a C!
ityClub
luncheon last week, Senate Majority Leader Lisa Brown indicated that her state economic stimulus package should be released tomorrow (Tuesday, January 13th). I hope that the policymakers crafting that package focus on the important competitiveness issues that will help retain small businesses and therefore employees, by making sure the cost of conducting business in Washington state gets no worse.

We'll see.