Washington Policy Blog

Is the economic downturn leveling off?

May 19, 2009 in Blog

Today's Unemployment Level report from the Employment Security Department (ESD) may give some hope to economists whose job it is to prognosticate on the health and well being of Washington's economy. The unemployment rate in April remained essentially unchanged with March's rate (both at 9.1%).

This is good news in that for the first time in almost 15 months the unemployment level did not get worse (it did not technically get better, but a tie is a win in this situation).  Consider that a year ago the unemployment rate in the state was 4.9%, so we are still almost double where we were not too long ago. Obviously, not everything is smiles and champagne. And there are still many serious concerns with the lack of credit for businesses, as well as no s!
ign in the construction industry
that things are turning around soon.

However, even the state's chief economist, Dr. Arun Raha, seems cautiously optimistic. Listen to his remarks yesterday on KUOW.

Sound Transit's ridership is up and down

May 18, 2009 in Blog

In the world of transportation policy analysis, there is a lot of anticipation for the first quarter ridership reports on public transit.

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.

In her weekly email update, Joni Earl gave us a preview of Sound Transit's first quarter results:

Despite the shaky economy, ridership on our Sound Transit buses and trains was up the first three months of this year.

Through March, Sound Transit trains an!
d buses carried an average of about 55,500 every weekday, an increase of 10 percent from a year earlier.  The average weekday boardings for ST Express buses increased 10 percent, Sounder commuter trains 5 percent and Tacoma Link light rail 5 percent.

In the month of March alone, ridership was up 6 percent from the same month a year earlier.

When compared to the same quarter last year, ridership is higher, but what Sound Transit does not say is overall transit demand is down. Sound Transit ended 2008 with an average use of 57.7 thousand trips per day. During the first quarter of 2009, Joni Earl says the agency now serves about 55.5 thousand trips per day. Comparatively, that is nearly a 4 percent drop.

Given current fuel prices and high unemployment rates, transit demand should continue to fall throughout the rest of the year. Th!
is should relieve most of the pressure on transit budgets but !
I'm skeptical that policymakers will slow their call for higher taxes. The legislature just passed SB 5433, which gives transit agencies the ability to raise car tab's by $20 per vehicle, subject to voter approval. The same bill also gives King County the authority to raise property taxes by 7.5 cents per $1,000 of assessed value, without asking voters, to increase transit service.

Just like honey bees in a spring garden, these new taxes just might be too much sweetener for lawmakers to resist.

HB 2261 will not improve student performance, says Dan Grimm, Chair of Basic Ed Task Force

May 15, 2009 in Blog

Austin Jenkin's excellent TVW interview of Dan Grimm, Chair of the Basic Education Task Force, reveals that the big new education reform bill, HB 2261, does not provide the structural reforms needed to genuinely improve public schools in Washington State. These are his words:


    "Even if there is additional money (to fund HB 2261), without significant structural reforms, we won't see significant improvements in student performance, which is the ultimate goal of all this effort."


Dan Grimm appears at 35:41:


Dan Grimm says we need to change the way we train and pay teachers, give administrators incentives to remove ineffective teachers from the classroom, and other key reforms, none of which are addressed by HB 2261.  HB 2261 instead creates working groups to look at some of these matters.  Mr. Grimm says this is just a way to avoid real structural reform, as any changes are sure to be delayed, refined, amended and minimized.   



He also points out that part of the problem is that the public seems to be generally satisfied with the status quo in education, and for this reason legislators are not passing real structural reforms to improve education.


How frustrating.  And depressing, as Austin points out. 


Dan Grimm and Austin discuss the power of the teacher's union, which is so powerful and well-funded that neither Democrats nor Republicans will pass real structural reforms for public education, short of an uprising from parents and the public.     


Parents are naturally inclined to believe that the public schools are doing fine.  How can parents get the real facts?  One source is our Education Reform Plan.  We describe the true state of public education (for example, did you know that public education officials are producing a generation of students less educated than their parents??) and we offer real systemic reforms to education, reforms that do not require new taxes amounting to $4-8 billion per biennium.

Payday lending bill would reduce access to credit

May 15, 2009 in Blog

The governor is thinking about vetoing a bill that would limit access to credit by placing new regulations on payday lenders. Political activists attack the 2,600 people working in the state’s 571 payday lending stores by calling them “loan sharks,” and say that a short-term loan works out to 2,700% when calculated on a yearly basis. First, they are manipulating their example to make the percentage rate look abnormally high. The fee for a $100 payday loan is $15. The average loan term is 20 days, which is 274% when calculated on an annual basis.

Second, they forget that if you are late by one day in paying your property taxes, the state will charge you 1,825% Annual Percentage Rate (APR) on a $100 tax bill. Here are some other common examples.

Overdraft fee: 912%. For a bounced check of $100 a typical bank will charge an overdraft fee of $35. Although the account holder might pay the original check amount plus the overdraft fee within a few days, the APR for this “loan” is 912%.

Credit card late fee: 652%. For a past-due amount of $100 a credit card company may charge a $25 late fee. If the cardholder pays the amount owed plus the late fee within two weeks, the APR charged by the credit card company is 652%.

Electricity bill fee: 560%. If Seattle City Light charges $30 plus its reconnect fee of $16 for a $100 electricity bill that is 30 days overdue the APR is 560%.

Late rent fee: 365%. Landlords typically add a 5% fee if rent is paid more than five days late. On an overdue rent payment of $100 this works out to an APR of 365%.

The political activists are playing a game by treating three-week loans as if they lasted a year.  Try it yourself.  The mathematical formula is: Loan fee divided by loan amount divided by loan term (in days) times 365 times 100.

If you lend a friend a dollar and the next day he pays you back $1.05, you just charged him 1,825% interest on an annual basis.

The math works the other way too. The borrower of a $100,000, 30-year mortgage at 5% will pay back $193,255 over the life of the loan – or 93% more than the amount he borrowed. A payday borrower will only pay back 15% of the original loan. So who got the better deal? The answer is both. Lenders provide different credit products for different purposes, depending on what the borrower needs. A payday loan makes sense if the borrower needs money for 20 days to pay a property tax bill that carries a stiff late penalty.

Across Washington, payday lenders employ 2,600 people, have a yearly payroll of $60 million, provide health coverage to 3,500 people, create $1.4 billion in easy-access credit, pay $5 million a year in taxes to the state, and are tightly regulated by the Department of Financial Institutions.

People working in payday lending stores don’t fit most people’s idea of “loan sharks.”

With the economy the way it is this is not the time for the governor to: 1) make it harder for people to get access to credit; 2) add new burdens to a business that is actually employing people; 3) reduce tax revenues by stifling a legal, profitable business sector – hey, these days the state treasury needs every dollar it can get.

What It Means to be Green?

May 15, 2009 in Blog

A number of stories and comments crossed my screen yesterday addressing what it means to be "green," and it is unclear to me why anyone would see these as positive.

First, a local environmental group posted this quote on Twitter from environmental activist Stephen Viederman:

"Climate change isn't an environmental issue. It's an issue of equity and justice."

I thought this was a strange quotation to highlight. It indicates that environmental issues are only useful as tools to achieve other leftist goals, like government intervention to impose a particular view of "equity and justice." It also demonstrates a point we made yesterday that leftists, like the NDP in British Columbia, will toss environmental concerns overboard to achieve other goals. Why else would they make protecting the environment contingent on supporting other leftist values?

Second, the people of India can celebrate their position as "greenest" citizens. What got them there also says a lot about what environmental activists, in this case the National Geographic Society, think "greenness" is.

The news story highlighting their achievement begins this way:

That cold water bath many Indians have because there's no electricity...that 'matka' they use because they can't afford a fridge...and the long walk they take to work and back because private transport is expensive and public transport shoddy. There's an upside to the hard life. Indians may be green with envy at the consumption-driven lifestyle in the West, but their own frugal ways and modest means have catapulted them to the top spot in the world's Green index, making them the most environmental-friendly denizens of Planet Earth.

Environmentalists too frequently glorify poverty as a "green" way of life and this is just the latest, and most honest, evidence of that. Many greens, however, still choose to live here rather than such a "green" paradise. Remember this link between poverty and "greenness" the next time you hear promises of "green" jobs.

We've noted many times before that rich countries have better environmental records than poor ones. I'd be willing to bet that Seattle's air quality (or New York's) is better than Delhi's. Poverty means suffering and environmental degradation.

At an environmental breakfast yesterday morning, one of the more extreme local environmentalists told the audience that "Environmentalists can be difficult but they make great ancestors." The comment, from an activist who inherited her wealth, made me laugh. The reality is that environmentalists like her exist because their ancestors were successful entrepreneurs. Across the world, wealth creates the ability to become an environmentalist.

Finally, someone pointed me to this article in Psychology Today. It addresses how our minds misapprehend risks from a variety of sources. One of the ways we get it wrong is when comparing risks of "natural" products to man-made products. The article notes:

The word radiation stirs thoughts of nuclear power, X-rays, and danger, so we shudder at the thought of erecting nuclear power plants in our neighborhoods. But every day we're bathed in radiation that has killed many more people than nuclear reactors: sunlight. It's hard for us to grasp the danger because sunlight feels so familiar and natural.  Our built-in bias for the natural led a California town to choose a toxic poison made from chrysanthemums over a milder artificial chemical to fight mosquitoes: People felt more comfortable with a plant-based product. We see what's "natural" as safe—and regard the new and "unnatural" as frightening.

This is why groups like the Washington Toxics Coalition and others stir up fear of the latest "toxic" threat no matter how small. Natural is good. If people made it, it is bad. They prefer their faulty seat-of-the-pants assessment to actual scientific assessment.

Is this what it means to be green? Does promoting the environment mean promoting poverty? Are environmental issues simply tools to justify government expansion? Does being green mean ignoring science and an honest assessment of costs and benefits in favor of an unsophisticated commitment to an idealized version of the "natural."

If so, it is not surprising that support for their views is in decline.

Dwindling support for costly environmental pursuits

May 14, 2009 in Blog

According to the latest Rasmussen Report, a nationally recognized polling firm, only 42% of Americans believe that a major lifestyle change is needed to save the environment, while 44% disagree and believe no such lifestyle changes are unnecessary.
 
Not surprisingly, the Rasmussen Report shows that there is a partisan divide on the issue.  The survey found that 57% of Democrats surveyed believe that change is required to help save the environment, but 58% of Republicans disagreed.  Interestingly the survey also finds that:

For those not affiliated with either major political party, 36% believe lifestyle changes  will be necessary, while 49% take the opposite view.

Of additional note, a Rasmussen Report released just last month revealed a reversal of opinion for the cause of global warming.  Among those surveyed the number of Americans that believes global warming was caused by humans has drastically declined.  In that report, only 34% believed global warming was caused by humans.  48% believe that global warming was caused by “long-term planetary trends.”  The survey notes:

These numbers reflect a reversal from a year ago when 47% blamed human activity while 34% said long-term planetary trends.

The Rasmussen Reports show that Americans are not satisfied by the current political pursuits, such as cap-and-trade, to stop global warming.

BC Vote Shows Opportunity for Conservatives on Environment

May 13, 2009 in Blog

Last night BC Premier Gordon Campbell won a rare third term in power, campaigning on his leadership on the economy. But he also benefited by taking action on climate change in a smart way, taking the issue away from the leftist New Democratic Party (NDP).

As Premier, Campbell implemented a carbon tax, with rebates to taxpayers, as the best method to address CO2 emissions. It was an alternative to the bureaucratic cap-and-trade and the myriad of regulations being offered elsewhere, like Washington State. The NDP, seeing a political opportunity, attacked the tax, hoping to raise populist ire. That strategy, however, backfired.

In a preview of the race yesterday, the Toronto Globe and Mail noted:

The first week of the election campaign was a complete disaster for the NDP, dominated by news stories about environmental heavyweights like David Suzuki denouncing the NDP for selling its soul in a populist bid to exploit some short-term voter anger. The message from many of the province's most influential environmental groups couldn't have been clearer: If you care about the earth, vote Liberal.

Last night's election losses are the culmination of the NDP's game-playing on the environment.

We have advocated a stable carbon price with offsetting cuts in property, investment and other taxes, as the best way to address carbon emissions. The package must not raise overall taxes and our preference would be a tax cut. The individual decisions of businesses and families will more effectively reduce carbon emissions, and do it in a way that preserves freedom and promotes prosperity.

Even though the BC model is slightly different than our approach, there are two key takeaway lessons.

First, too often the left treats environmental policies simply as tools to win election. The environmental community jumps on eco-fads with an eye first to political gain and second to environmental benefit. This is why greens continue to support failed environmental policies like the Kyoto Protocol and "green" building mandates in Washington. When the NDP saw what they thought was a more politically expedient route, they threw environmental policy overboard.

Second, the election shows that when conservatives take a serious and responsible approach to the environment, they can take the issue away from the left and win. We shouldn't enact a carbon price just for the politics, but it is another example that good policy is also good politics.

Allowing the left to dominate these issues leaves the debate as a choice between supporting or ignoring the environment. Engaging gives voters a choice between responsible environmental policies that promote prosperity, or the ineffective environmental policies of the past that rely on government forcing lifestyle changes and hurting prosperity.

BC voters made that choice last night and the conservatives are enjoying a third term.

Legislative records exemption vote postponed again

May 12, 2009 in Blog

The Sunshine Committee's discussion on repealing the Legislature's exemption from the public records act is beginning to morph into the movie sequel of Groundhog Day.

After a very spirited discussion about the resolution pitting the lawmakers in attendance (Sen. Kline and Sen. Roach) against the other committee members, by a 4-3 vote the Sunshine Committee voted to table Chairman Carr's proposal (at his request) and move the final vote on this important issue to its July 15 meeting. Here is Carr's original resolution:

The 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. 

This is not the first delay. The issue of the Legislature's exemption from public disclosure was first presented for consideration back in October 2007. At that time the Four Corners of the Legislature (Democrat and Republican Leadership) asked the Sunshine Committee to delay action until the Supreme Court could rule on whether a Legislative privilege exists in the state Constitution. Here is one of the briefs filed in that case by the Washington Coalition for Open Government and American Legislative Exc!
hange Council
.  

The Court, however,  did not rule on this issue leaving the law unclear. Then the Committee decided that no vote should occur until all four legislative members were present (Sen. Kline, Sen. Roach, Rep. Kessler, and Rep. Rodne). Unfortunately that prerequisite to date has not occurred. 

Chairman Carr's proposal was then added to the March 18, 2009 meeting but since none of the legislative members were in attendance the vote was postponed until today's meeting. Although Carr hoped to have a vote today, the agenda failed to note that a vote was scheduled, so he felt it best to postpone action once again so the agenda could explicitly show a vote would occur.

One of the more interesting exchanges today about the legislative exemption focused on the!
state's and Seattle's budget shortfall. Committee member Ramsey Ramerman said that although Seattle's deficit is $43 million, the city council is being forced to discuss the options in public. Ramerman noted, however, that when it came to the state's $9 billion budget shortfall conversations about the options happened behind closed doors.

As for his proposed resolution, Carr is exactly right when he said today, "Open Government is not easy but it is best.”

Hopefully this principle will prevail when the Sunshine Committee finally holds this long overdue vote.

How Can a Drum Circle Be Wrong?

May 11, 2009 in Blog

For those on Twitter, you can follow the Environmental Center @WAPolicyGreen.


We missed the "Fair Trade" drum circle on Saturday, but that wasn't the silliest thing regarding "Fair Trade" last weekend.

The EcoConsumer column in the Seattle Times advocating fair trade, and attacking free trade, was more silly than usual...which is saying something.

The author Tom Watson, whose paycheck comes courtesy of King County taxpayers, attempts to justify "fair" trade over free trade with the following logic:

Free trade usually means reducing trade restrictions among nations. This can result in companies continually moving production to countries with cheap labor and lax environmental regulations. It may also hurt workers in developing nations when products from other countries flood the marketplace.

This paragraph shows how incoherent his view of trade is. In just two back-to-back sentences he argues that free trade is:

  • Bad because companies move to developing countries giving them an advantage so they can ship products to developed countries at the expense of jobs there.
  • Bad because free trade opens developing countries, giving developed countries an advantage so they can ship products to those developing countries at the expense of jobs there.

Ironically, he doesn't see the contradiction from one sentence to the next!

Such incoherent arguments are rebutted by economists as diverse as Paul Krugman, whose Nobel Prize honors his work in trade economics (I recommend his book Pop Internationalism), and Milton Friedman. They recognized that free trade makes both trading partners better off.

"Fair" trade, on the other hand, works (to the extent that it does) only because it is so little used and because only those with available, discretionary income are participating. TransFair USA, the primary organization certifying "fair" trade practices, indicates that there were 87.7 million pounds of fair trade coffee imported by the US in 2008. This is less than 3 percent of the total coffee imported each year. If such trade rules were imposed for everyone, however, it would raise the cost of all coffee, reducing the amount enjoyed by Americans and putting growers in developing countries out of business. Fewer jobs, less prosperity.

There is another reason that advocates for the poor support free trade. Muhammad Yunus, who won the 2007 Nobel Peace Prize for his work in micro-lending, writes in his excellent book Banker to the Poor:

I would like to see all barriers and protections around the world markets disappear. Protectionism is built up in each nation in the name of the poor, but its real beneficiaries are the rich and clever people who know how to manipulate the system. By contrast the poor have a better chance in a bigger open market than in a smaller protected market. Everyone would benefit from the free flow of commodities, finances and people.

Free trade, not protectionism in the false guise of "fair" trade, is the way out of poverty. It is also the way toward a cleaner environment since wealthy countries consistently have cleaner air and water than poor countries.

Finally, if Mr. Watson's view of trade is correct, what must he think of the free trade that goes on between Washington and Idaho where labor costs and environmental regulations are different? Soon, all jobs will be moving to Idaho. But that's OK, because then Washington goods will flood Idaho, making them more poor. Right?

I-960 in legislative crosshairs

May 8, 2009 in Blog

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):

Tech Policy Summit Will Address Innovation vs. Regulations

May 8, 2009 in Blog

TPSlogo 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.

2009-11 budget priorities

May 8, 2009 in Blog

With the threat of a special session now over, the next major policy development will be when the Governor takes action on the 2009-11 budget proposal. It is certain that some vetoes will be forthcoming. The State Auditor hopes that his performance audit funding will be restored while the state Lands Commissioner wants his executive plane saved from the chopping block.

What proposed spending from the budget might warrant a line-item veto? Here are some possibilities:

•    Sec 122: $460,000 for Asian affairs commission.

•    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.

•    Sec!
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 610 (3): “At least” $200,000 for Labor Center at Evergreen State College.

•    Sec 619: $6,736,000 (all funds) for state Arts Commiss!
ion.

•    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,!
2010”

•    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.”

Teacher layoffs can be avoided by putting principals in charge of school budgets

May 8, 2009 in Blog

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.      

 

   

Greens vs. Economics: King County edition

May 7, 2009 in Blog

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.

Greens vs. Science: Lands Commissioner edition

May 7, 2009 in Blog

For those on Twitter, you can follow the Environmental Center @WAPolicyGreen.


The Olympian today features an article about cuts to state aircraft, including this quote from Lands Commissioner Peter Goldmark's spokesman:

“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.

Second, his claim about needing the plane to address an increasing number of "climate-change-related storms" is contradicted by scientists. UW climatologist Cliff Mass addressed this issue earlier this year in the Seattle Times:

"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.