Many thanks to the Department of Revenue for sending over a table categorizing the state's 1,783 taxing districts. Want to know which ones you owe taxes to and how much that means to your total tax burden?
Yesterday we proposed the creation of an online searchable database of all tax rates for each taxing district to help citizens and business-owners answer this question.
Earlier I wrote that OFM's fiscal note for I-985 overstated costs. Basically, OFM assumed that I-985 would cover costs incurred by transit agencies as a result of opening HOV lanes during nonpeak hours. Upon our analysis, we concluded that nowhere within the text of the initiative does it claim to cover these incidental costs. In fact, if you accepted OFM's logic, the state would have to compensate every consumer of the HOV system, which of course is not required under the language found within the initiative.
The Office of Financial Management agreed and yesterday sent out a revised fiscal note removing the assumption that I-985 would cover the incidental costs from opening the carpool lanes.
The new fiscal note also corrects an error in how the OFM calculated sales tax revenue. OFM used revenue data from 2013-15 biennium, instead of the 2011-13 biennium. The new estimate shows the impact on the general fund decreases from $620 million over five years, to $573.9 million over five years.
Accounting for both changes, the new estimate shows that I-985 would redirect about $622.6 million over five years, instead of $669 million.
The revised fiscal note has been transmitted to the Secretary of State and will be the official language listed in the voter's pamphlet. But you don't have to wait because you can read it here first. Also, WPC's analysis is complete and will be officially release early next week.
Have you ever wondered what your total state and local tax bill is but struggled to calculate government’s take of your income?
So have we.
This is why we think it is time for creation of an online searchable database of all tax rates for each taxing district to help citizens and business-owners answer this question. To help facilitate this reform we've drafted model language for what we call the "Taxation Disclosure Act."
The language is modeled after this year's successful adoption of Washington Policy Center’s recommendation for the state to adopt a searchable budget website.
We are hopeful that policy makers will see this proposal as an opportunity to make taxation more transparent and help citizens learn more about what government decisions mean to their pocket books.
Click here to view WPC's "Taxation Disclosure Act."
In a unanimous ruling today, the Washington State Supreme Court provided another small victory to property owners and property rights advocates.In their decision, found here, the Court remanded a case to the Western Washington Growth Management Hearings Board (WWGHB) that has potential to drastically affect the urban growth areas and rural character of Thurston County.
In the remand, the Supreme Court orders the WWGHB to consider if County used an appropriate market factor to justify the sizing of their urban growth areas and if a variety of rural densities is based on local circumstances.
The ruling by the Supreme Court follows a June opinion from the Court of Appeals that also provide a victory to King County rural land owners.In that decision the Court of Appeals, available here, said that King County’s rural zoning ordinance, a “one size fits all”, amounted to an indirect tax, fee or charge. The Seattle Times ran and excellent editorial summarizing that case here.
Both of these rulings appear to clear the pathway for getting back to the “bottom up” system that was originally promised under the Growth Management Act.
Last month Thomas M. Sullivan, Chief Counsel for Advocacy at the U.S. Small Business Administration (SBA) testified that the regulatory cost for small businesses has risen in the past few years. In the 2000, U.S. federal government regulations cost an estimated $843 billion, or 8% of Gross Domestic Product.
By 2004, that cost had risen to $1.1 trillion. The study on which Mr. Sullivan's comments are based on also points out that, on average, firms with fewer than 20 employees are paying approximately $7,647 per employee in order to comply with federal regulations. That's over $145,000 per year to comply with federal regulations for a firm of 19 employees. State regulations only serve to increase those costs.
It's very important for policymakers, particularly as we head towards a longer legislative session, to keep in mind that regulations are a de facto tax increase. Whether it takes time, money, resources or effort, regulations cost something in order to comply. Many regulations begin as an idea that "the government oughta..." or "there ought to be a law..." and too often the unintended consequences of such actions are overlooked or ignored.
Before regulations are passed, either through legislation or agency fiat, the true cost upon the private sector should be adequately determined. The Governor sponsored small business roundtables last Spring to hear concerns from small business owners on onerous regulations, but perhaps a little more proactive approach -- such as heading off the most costly or controversial proposals before they enter into the RCW's -- would be in order, particularly during these tough economic times.
State union members took to the streets today in Olympia to demand a pay raise. The unions are currently in negotiations with Governor Gregoire on the state's 2009-11 collective bargaining agreement. Oddly enough, The Olympianquotes some of the union members chanting: "Dino Rossi has got to go!"
Last week the unions were encouraging members to "tell the Governor State Employees are hurting and need a fair contract!"
"Resist political pressure from public sector unions Public sector unions occupy a unique position within our governing system. They represent one part of government (public employees) which is organized to lobby another part of government (the legislature).
Employers and unions in the private sector operate under the unyielding discipline of the market. Union leaders know that if their demands cause the company to go under, everybody loses. Government, however, cannot go out of business. There is no natural limit to the demands that public union leaders can make on the treasury, especially since each expansion of government spending generally increases the amount of monthly dues paid to the union.
In the private sector, unions negotiate directly with the owners and managers of a company. If company stockholders are unhappy, they can take their investment elsewhere. In government, the “owners” are the taxpayers. They have no involvement in negotiating with public sector unions, and they also have no choice about paying for whatever conditions, salary or benefits the legislature has agreed to provide.
Public employees should receive fair compensation for the work they do, and it is in the public interest to attract hard working, talented people to public service. But government is about more than providing high paying jobs and generous benefits. If a government program or service no longer makes sense, policymakers who respect taxpayers should end it, and devote the savings to effective programs, or to reducing the tax burden on citizens."
In researching for WPC's guide to I-985, OFM's fiscal note may have overestimated some of
For example, the OFM claims that local transit agencies
would incur costs (about $15 million over 5 years) due to the loss of what
amounts to a dedicated transit lane on the freeway system. While the impact to
the transit agency is probably correct, the OFM fiscal analysis goes further
and assumes these costs would be covered from the Reduce Traffic Congestion
Account because they are a result of the initiative’s requirement to open HOV
This is not accurate.
I-985 would cover costs related to the physical act of
opening HOV lanes during nonpeak hours including, “new and modified electronic
and nonelectronic signage, lane striping, improvements, and maintenance, and
shoulder maintenance and improvements, including bumpers.”
The cost to transit agencies or any other group or
individual is incidental and not associated with the physical action of opening
the HOV lanes. If you accepted the OFM's logic, then the state would have to
compensate every consumer of the HOV system. There is no language within the
initiative that says it would cover secondary impacts. The OFM’s fiscal
analysis should not include reimbursement from the Reduce Traffic Congestion
Account as a cost to implement the initiative.
The OFM also claims that transit agencies would lose
about $20 million over five years in federal funds if carpool lanes are opened
during non-peak periods. But the State has explored opening HOV lanes during
nonpeak hours before and Federal Highway Administration officials concluded the
change would not jeopardize any federal money. Here is an excerpt from a Seattle Times article written in 2002 that quotes
an FHWA official:
State officials initially were concerned that opening up
the HOV lanes could jeopardize federal funds. But the Federal Highway
Administration, which would have to approve any change in the use of HOV lanes,
said money would not be at risk.
"It would not jeopardize any federal funds if the
state went to part-time HOV lanes," said Dan Mathis, division
administrator for the federal agency's Washington state office.
I currently have a call in to the local FHWA office for
By the way, the cost to open the HOV lanes in 2002 was
estimated at $2 million. The OFM fiscal note claims the cost is now $239
WPC's Citizens Guide to I-985 should be ready next week.
In a recent interview with The Stranger editorial board Governor Gregoire denounced criticism of her policy toward Indian gaming, saying, "I think this whole thing is racist, and I'm totally offended by it." she is obviously reacting against her political opponents, but the phrase "this whole thing" is pretty sweeping. Much of the numbers and analysis in the debate over Indian gaming policy comes from a study we published earlier this year - "Washington State Compacts with Tribal Businesses," written by one of our policy analysts, Brandon Houskeeper.
The governor probably wasn't thinking specifically of our study, but for the sake of openness we need to be clear: Indian gaming policy is a completely legitimate area of research and debate. There is nothing racist about publishing facts and analysis about a policy that has so much impact on the economy and the state budget. Indian gaming is a multi-billion dollar industry. Indian-owned businesses have a special tax status -- they do not pay state or federal taxes -- and the lack of an agreement to pay part of Indian casino profits into the general fund, which other states have, costs Olympia about $140 million a year.
If race is involved, it is not the fault of policy researchers at nonprofit think tanks. Under federal law Indian tribes set their own membership rules. Most tribes enforce a blood quantum requirement. The Snoqualmie tribe expelled 60 people this year because they didn't have the one-eighth tribal blood to be members. The fact that ownership of an Indian casino is based on race comes from the tribes, it isn't imposed by non-Indians.
Sure it's an election year, but outside political forces do not determine what studies the Washington Policy Center publishes. I do. I can't ask one of our policy analysts to spend months researching an important issue, struggle to understand the numbers and their implications, write it all up in an understandable way, and then worry that his work will attract an ugly label from a powerful government official. To pull back out of fear of being called something unpleasant would have a chilling effect on our entire research program, and would be a disservice to our supporters and to the reporters and policymakers who read our studies. The fiscal impact of Indian gaming speaks for itself. There is no reason an open public debate, informed by the facts, should somehow be placed off-limits.
The Yakima Herald has joined with The Everett Herald in endorsing our recommendations to restructure statewide elected policy offices. From Sunday's Yakima Herald (in-part):
"It was a timely coincidence that on the same day Gregoire issued her freeze order, the Washington Policy Center released a policy brief touting the advantages of electing fewer state agency heads. In the place of nine separate elections, the center advocates electing the governor and lieutenant governor as a team and also leaving attorney general, state treasurer and state auditor on the ballot. The rest would become Cabinet positions appointed by the governor.
There are a couple of good arguments advanced for such reorganization. The most visible in this election year is that a cluttered statewide ballot would be shortened in the future.
Take a look at this year's primary election. The gubernatorial election aside, the other eight statewide elected positions on the ballot feature a total of 28 candidates in the Aug. 19 primary. They will be winnowed to 16 for the Nov. 4 general election, but that's still a lot of people to get to know in casting an informed ballot for someone who will head a state agency.
The other advantage of making more of them appointive Cabinet positions, the policy center notes, is that there is actually more accountability when agency heads are changed with election of a new governor."
Here isThe Everett Herald editorial from last week.
Now Walker is taking his message of fiscal reform to a big screen near you. Here is an email he sent last week about this effort:
Some of you have heard me mention our forthcoming feature documentary, "I.O.U.S.A." A few of you may have even had the chance to see an early version of it. The film tells the story of America's large and growing fiscal challenge, how the richest country in the world came to be in the position we are in today, and what could happen to us if we don't do something about it soon. It covers our nation's four key deficits: budget, savings, balance of payments/trade, and worst of all, our leadership deficit.
The film is fact-based, nonpartisan and nonideological, and it features a number of candid appearances, including by Warren Buffett, Alan Greenspan, Paul Volcker, my Foundation's chairman Pete Peterson, Sens. Kent Conrad and Judd Gregg, former Treasury Secretaries Paul O'Neill and Robert Rubin, former CBO chief Alice Rivlin, Rep. Ron Paul, my Fiscal Wake-Up Tour colleague Bob Bixby, and myself.
For one night, August 21, the film will show in about 400 theaters around the country -- with our own special version of a "bonus track!" Immediately following the movie itself, audience members everywhere will be treated to a 45-minute town meeting on the US economy with Buffett, Bill Novelli of AARP, Bill Niskanen of the CATO Institute, Pete and I. We'll be coming to you live by satellite from Omaha. You can find out more about this very special town meeting, submit your own question to the participants, and locate the showing in a theater near you at www.IOUSAtheMovie.com.
Starting on August 22, the film will run in 10 cities for at least one week. Those cities also are listed on the movie's website: www.IOUSAtheMovie.com.
I hope you will take the time -- and take your family and friends! -- to see the film. It's as clear an explanation of the four deficits threatening our economic future as you'll find anywhere. Nothing is more important than educating the public about this looming crisis and building the political will in Washington to enact change.
Anything that you're willing to do to spread the word about the film would be greatly appreciated.
UPDATED (10:32 a.m. 8/11): After consulting with OFM, $356 million has been added to Washington's FY 2007 expenditures.
After scouring through financial reports for all 50 states, it's painfully clear why no one else has attempted to do a side by side comparison of spending increases for each state - it's like trying to compare the DNA of siblings. You'd think they'd be comparable but they aren't even close.
That said, I think I've put together the closest thing possible to an apples to apples comparison of each states' total budget growth (all expenditures). Unfortunately, this means I had to stop with FY 2007 since that is the last year available for state Comprehensive Annual Financial Reports (CAFR).
Using the "Total Primary Government Expenses" line item from each state's FY 2007 CAFR, here is the table I came up with (dollars in thousands):
I called West Virginia to see how they were able to stay essentially flat in spending. The answer: In 2005 they fully privatized their Workers Compensation program.
One of the reasons why the spending increase percentage was so high for Louisiana and Mississippi is related to Hurricane Katrina relief.
A caution for Washington, for 2007 there is a disclaimer that says "health insurance programs is zero starting in 2007 due to fund reclassifications." In 2006, that spending was estimated at $1.2 billion. I’m waiting to hear back from OFM to learn if that spending has been captured elsewhere to see if the comparison with 2003's spending is apples to apples. I'll update the table if necessary.
Judging from the budget outlooks for the states, spending has been outpacing revenue resulting in the current spending deficits being reported.
"Make no mistake; red ink stained the budget long before the economy slowed. In March 2007, the members of the Coalition of Washington Business Organizations (COWBO) wrote to state senators:
' ... the state cannot continue to spend more than it takes in. Increasing spending 15 percent while revenues grow 7.5 percent is not responsible. Coming on the heels of a 2005-2007 budget that increased Near General Fund State spending 13 percent, this budget virtually guarantees substantial shortfalls in the foreseeable future.'"
Officials at the Shoreline School District are failing the needs of its disabled students, claiming they don't have enough money and "logistic concerns." See today Seattle Times, by Maureen O'Hagan. Disabled students are being neglected, warehoused and poorly served.
Yet Shoreline officials have plenty of money. The Shoreline School District for Fiscal Year 2007-8 reveals that it has $10,399 to spend per disabled child.
Imagine what a parent can do with $10,399 to help a child.
Shoreline's disabled children should not be trapped in a school that is not helping them. Legislators should pass a law allowing parents of a disabled child control over the child's education. Funding for the disabled child should follow the child to the school or private program chosen by the child's parents. In this way, disabled children can receive the individualized instructional programs they deserve. Parents of disabled children deserve better treatment from our public education administrators. With public funding help, these parents can do a far better job for their children than our schools do today.
"The WPC suggests lightening voters' load by reducing the number of statewide elected policy posts to five, and having candidates for governor and lieutenant governor run jointly, just as those who run for president and vice president do. Voters would also still elect the attorney general, treasurer and auditor, "watchdog" offices that should be made nonpartisan, because voters don't expect politics to influence how they're run. (Voters would also still elect judges.)
The other currently elected offices would be appointed by the governor, just as the heads of Cabinet-level offices are now.
Generally, we like the idea. Why, for instance, does it make sense to elect the lands commissioner, but not the secretary of transportation? Why elect a state schools superintendent when key policy issues regarding education are decided in the legislative process?"
Click here to read our full report recommending the changes.
The Office of Financial Management just released their fiscal note on I-985.
It shows that over five years, $668.6 million would be redirected from current projects and activities to congestion relief activities, or about $133.7 million annually. The fiscal note also estimates that over the same time period, it will cost the state about $324.6 million to implement I-985. This would leave about $344 million, which according to the language in I-985 would be available for projects that would reduce congestion.
Most of the cost to implement I-985 will occur in these early years and once completed would only need general O&M dollars; thus, significantly increasing the annual revenue available for the legislature to spend per the guidelines in the initiative.
As with most fiscal notes, there is also a critical review on the impact of shifting funds:
Estimated revenue loss to cities from red light traffic camera infractions would be $40 million over five years.
Not charging tolls during off-peak hours on SR-167 HOT lanes would result in a 33 percent loss of funds, or a total loss of $3.1 million over five years.
Washington State transit agencies are estimated to lose about $20 million over five years in
federal transit funds due to the opening of carpool lanes to general traffic during non-peak periods.
The Washington State Arts Commission would lose $500,000 over five years.
The state general fund would be reduced by $620 million over five years. The general fund is used for education, public safety, social services and general government.
Washington Policy Center is conducting a more comprehensive look at I-985 and will release a full report in the coming days. In the mean time, here is a copy of OFM's analysis.