Washington Policy Blog

Equity Project shows how to improve public education: free up principals to hire and retain only the best teachers

June 5, 2009 in Blog

Don't miss today's front-page New York Times article, and particularly this quote about the teacher selection process at Zeke Vanderhoek's experimental new charter middle school in New York city:

     "It's so refreshing that somebody comes to a teacher and says, 'Show me what you know,'" said Oscar Quintero, who goes by Pepe and will teach special education. "This is the first time in 30 years of teaching that anybody has been really interested in what I do." 

Is this not a devastating indictment of the teacher selection process in a typical public school? 

The Equity Project shows what can happen to a school when an inspired principal is allowed the tools he or she needs to design a high-quality program, which, in this case, will mostly serve low-income Hispanic children.  Zeke Vanderhoek is assembling a team of high-caliber teachers from all over the country and paying them $125,000 a year, plus a performance bonus.  He has plenty of money to pay higher salaries, as he controls his budget, and is allowed to shift resources away from hiring non-essential instructional and administrative staff to increase teacher pay.  These teachers will not have tenure,either.  Principal Vanderhoek will also have class sizes of 30 (six more than the average class size in other NYC middle schools), and require teachers to work longer hours and more days.  He will not employ an assistant principal, substitute teachers (except for extended leaves), or teacher coaches. 

Would that would happen in Washington.  Principals in Washington control less than 5% of their budgets, cannot pay teachers more than the state pay scale, most cannot hire or in many cases even approve the assignment of staff to their schools, cannot ask teachers to work longer hours or more days, and collective bargaining agreements prevent principals from removing low-performing teachers from the classroom. 

The answer to our public school woes is to find more principals like Zeke Vanderhoek, give them the tools they need to succeed, and then watch them seek out, employ and reward excellent teachers like Pepe for the classroom. 

How some school districts are successfully avoiding teacher layoffs

June 4, 2009 in Blog

Today's Seattle Times article, "Seattle school layoffs denounced at rally," by Linda Shaw, describes how various school districts are responding to budget challenges.  Seattle is laying off 33 first and second-year young teachers. 

(These teachers are being laid off, even though they may be the very best teachers in their schools.  Clearly, the Seattle district leadership, which is currently engaged in negotiations with the union, must insist that the new collective bargaining agreement allow the district to consider teacher performance in making lay off decisions.)

What is also interesting about the Seattle Times article is how other school districts are reducing costs by eliminating positions, through natural attrition and by cutting non-teaching staff.  Bellevue, North Shore, Lake Washington, Issaquah have all avoided laying off teachers who wish to show up to teach next year, by cutting teaching positions through natural attrition, or by cutting non-teaching staff.  Only Seattle, Edmonds and Everett school districts are laying off teachers who are eager to teach kids. 

Here are the numbers for school personnel hired statewide in School Year 2007-2008:

Administrators:  4038.Classroom Elementary Teachers: 26,494; Classroom Secondary Teachers: 22,237; Other teachers: 5183. Other certificated staff, extracurricular:  267; Education Staff Associates (other support, library media specialists, counselors, occupational therapists, social workers, communications, psychologists, nurses, physical therapists, reading resource): 7347; Classified Personnel (aides, crafts/trades, laborers, office/clerical, operators, professional, service workers, technical, director/supervisor): 38,604.  Total:  104,174.

These numbers and the Seattle Times article reveal that school districts are well able to avoid cutting classroom teachers who want to return in the fall to teach kids.    

Could ARRA push inflation?

June 4, 2009 in Blog

Fallingdollar Dr. John Rutledge, chairman of Rutledge Capital and international business consultant extraordinaire, chimed in on a Congressional Budget Office PowerPoint entitled "Implementation Lags of Fiscal Policy."

In it, the CBO outlines the timing of implementation of the American Recovery and Reinvestment Act, ARRA (or just "stimulus package"). It gives a bullet-point outline of some of the thinking behind the stimulus package (e.g., "The Federal Reserve cut the funds rate essentially to zero in December, and thus was out of ammunition for its prin!
ciple policy weapon.")

But more importantly what the CBO highlights, and what Dr. Rutledge has concerns with, is that discretionary spending -- such as infrastructure improvements, education, broadband, state aid, etc. -- is going to take at least three years to spend barely 75% of the allotted money. $308 billion was set aside in ARRA for the discretionary spending and by the end of 2011, only 72% of it will be in the economy.

In fact, only 11% of discretionary spending will be spent by the end of 2009. But the stimulus package was largely based upon the premise that the money had to be infused into the economy very quickly. This isn't exactly moving forward as fast as it probably should.

But there's another concern as Dr. Rutledge points out. Many economists, even our state's own chief economist Dr. Arun Raha, are ex!
pecting the economy to begin rebounding in the third quarter o!
f 2009, with weak growth in 2010 and 2011 (see Dr. Raha's forecast presentation).

So, how does a stimulus package (i.e. higher government spending) affect an economy that is on its way to a slow recovery? It could have a potentially adverse inflationary effect. This is not what policymakers were expecting I'm sure.

Nevertheless, Dr. Rutledge concludes:

Why is this [stimulus roll out] a problem? Because there are early signs of recovery coming
in now every day. By the end of this year the recovery will be
undeniably underway. That means next year (2010) and the year after
will be periods of rapid growth and rising inflationary worries. That’s
why bond yields have increased by more than a full percentage point in
recent weeks with more to come over the coming months. And that’s one
of the reasons why commodity prices have been rising so fast.

The rising skyrocketing federal debt (approximately $1 trillion a year before the new health care initiative) could lead to Congress once again raising taxes but more importantly firing up those monetary printing presses or issuing more Treasury Bills (by the way, China has more than $2 TRILLION in tbills). We are seeing the beginnings of this with the dollar dropping off against the Euro and the British pound. In fact, Bloomberg is reporting that more and more developing countries are selling off their dollar reserves.

Washington state fares well in early stimulus projects, Michigan not so much

June 2, 2009 in Blog

Last week USA Today published an enlightening interactive map breaking down the first round of stimulus money by state and ranking each state by stimulus money received per capita -- essentially, how much money did each state receive per person.

Overall, Washington state ranked second in the per capita ranking -- we also ranked first in money received from the feds so far ($1.4+ billion). This is interesting because Washington state is nowhere near the largest, and probably most neediest state. Even if our unemployment rate is at an alarming 9.1%, there are other states in the double digits (our neighbor to the south is a healthy 12%, Michigan at about 13%). That being said, I am still weary that the "stimulus package" will stimulate anything more than discussion.

But one of the keys to supposedly stimulating the economy is that the $787 billion package is sp!
ent quickly. If higher government spending is the key to getting us back on track, the money has to actually get into the economy, and fast. But the Obama administration has only doled out $4 billion nationally, according to USA Today:

"Nationwide, federal agencies have awarded nearly $4 billion in contracts to help jump-start the economy since President Obama signed the massive stimulus package in February. But, with few exceptions, that money has not reached states where the unemployment rate is highest..."

In other words, only one half of one percent has made it into the economy. And this infamous CBO analysis from February also shows that the largest chunks of the stimulus package are a year or two away from hitting the economy.

At least Washington is ahead of the curve. The same thing certainly can't be said!
about Michigan (unless, of course, you count the auto bailout!
s, which have worked great so far!).

Lastly, if you want to see where the federal stimulus money will end up in Washington by county, the ever-evolving recovery.wa.gov has another nifty interactive map that breaks it down.

Web voters support 72 hour budget timeout

June 2, 2009 in Blog

Requiring a 72 hour budget timeout received the most votes by advocates of open government taking advantage of President Obama's interactive website focused on improving federal government transparency. According to Roll Call:

Tolls and economic consequences

June 2, 2009 in Blog

In today's SeattlePI.com, Aubrey Cohen asks, Will more Washington roads take their toll on drivers? The story focused on widespread tolling and its impact on consumers:

Individual drivers would shrug off tolls "as the cost of living in
modern society, similar to an increase in gas prices," but businesses
would pass the cost on to customers, Ennis wrote. "The overall effect
of extensive tolling will be to depress total economic growth - it
would be like handing everyone in the economy a ten-pound weight to
carry around; it is not enough to stop anyone in their tracks, but it
makes it slightly more difficult to get anything done."

Curb-to-Curb tolling, where motorists pay a toll on all primary and secondary roadways would have a significant economic impact. This would not be a penny increase in the sales tax where the tax burden is the equivalent of a latte a month...curb-to-curb tolling could add another $15-$20 per trip, depending how far you drive. The potential for such a large tax burden begs the question: does tolling replace gas taxes or are tolls in addition to gas taxes?

DSHS hit with 7 audit findings

June 1, 2009 in Blog

The Department of Social and Health Services (DSHS) received seven findings in an audit released this morning by the State Auditor's office. Here are details on the audit findings:

  1. DSHS, Children’s Administration and Economic Services Administration paid an adoptive parent, foster care providers and child care providers who had not cleared background checks.
  2. DSHS did not have controls in place to prevent misappropriation and ensure payroll accuracy.
  3. DSHS internal controls over provider payments are not adequate, resulting in misappropriations totaling approximately $230,000.
  4. DSHS does not ensure all payments made through its Social Services Payment System are supported and approved.
  5. DSHS’ Economic Services Administration systems are vulnerable to misappropriation and inappropriate data changes.
  6. DSHS does not adequately monitor access to critical systems.
  7. DSHS does not adequately monitor contracts with Crisis Residential Centers to ensure compliance with state law and contract requirements.

These audit findings may provide new ammunition to lawmakers hoping to reform DSHS. This past session the House State Government and Tribal Affairs Committee unanimously approved HB 2197 which would eliminate DSHS, replacing the agency with four smaller agencies. The full House, however, did not take action on the proposal.

Rep. Mike Armstrong, prime sponsor of HB 2197, said this about his proposal:

"This agency has simply become too big and unresponsive to the public's needs. The state has tried to put too many governmental functions into one super agency, and it has not worked. It's difficult to administer, costly, and it's very hard to measure whether the agency is actually meeting its goals and responsibilities . . . There are 16 Democrats and 17!
Republicans who have signed onto this bill. That tells me they are as frustrated as I am with the bureaucratic arrogance of DSHS."

What have you done for me lately?

June 1, 2009 in Blog

Thanks to new policies on government transparency, members of congress who request an earmark in the upcoming surface transportation reauthorization bill (the federal transportation budget) must now list the requests on their official government website. So citizens can now find exactly what transportation projects each member of congress has requested.

Here is a preview with links to each member's full earmark request:

Congressman Jay Inslee                                                $207
million       List
of Projects

Congressman Rick Larsen                                             $103
million       List
of Projects

Congressman Brian Baird                                              $283
million       List
of Projects

Congressman Doc Hastings                                          $51
million         List
of Projects

Congresswoman Cathy McMorris Rodgers                      Unknown           List
of Projects

Congressman Norm Dicks                                            $42
million          List
of Projects

Congressman Jim McDermott                                       $199
million        List of Projects

Congressman Dave Reichert                                         $309
million        List of Projects

Congressman Adam Smith                                           $377.2
million     List of

Does removing garbage cans provide any environmental benefit, and at what cost?

May 28, 2009 in Blog

According to a report by Emily Heffter of the Seattle Times, the City of Seattle is removing garbage cans from city parks as part of a cost cutting effort, but also hopes that this move “will morph into an all-out culture shift.”  Although the “culture shift” is not spelled out in so many words, one can easily derive that the “culture shift” hoped for by the City is a move to more recycling. 

In the Times report the City claims that, “the parks department planned to save about $160,000 by removing 400 more (garbage cans) — some from well-used parks.”  Yet, even as the garbage cans are being removed, the City announced plans to move forward with efforts to install recycling bins throughout the City.  Heffter reports that the City “put 120 recycling containers at parks…late last year”, and that, “workers now are spreading the containers across the rest of the city.”

But according to a 2007 Seattle Times article, the recycling program comes with its own high costs and may not have that much environmental benefit.

Late in 2007, the City of Seattle announced its plans to begin a recycling pilot program to increase recycling availability at City parks.  At that time, the pilot program was estimated to cost Seattleites some $200,000 for start up costs, with an additional cost estimate of $130,000 annually to maintain the pilot program sites, which would cover 106 recycle bins in City parks.

Responding to the cost for operating the recycling program in 2007, Tim Croll, Solid-Waste Director for Seattle Public Utilities, told the Times, “That's a lot of money... seemingly cost-ineffective.”  He continued, "As for the benefits to the environment, that's an art rather than science."

In fact, just recently, one citizen living near a busy park where the trash cans were removed told the Times, “the can at a nearby bus stop was overflowing from park users' trash.”

So questions remain surrounding the costs Seattleites are being forced to pay for their part in this “culture shift” and whether or not there are any real benefits?

First, Kill All the Humans...

May 26, 2009 in Blog

That's David Horsey's prescription for environmental policy. It is a policy that UK Prime Minister Gordon Brown's environmental minister has already endorsed in part. It is a policy the Flight of the Conchords have outlined.


Green Jobs: More Work, Less Pay

May 26, 2009 in Blog

As part of the effort to enact a range of new restrictions on carbon emissions, many point to the creation of "green jobs," arguing that new government spending and regulation can bring us out of the current recession. The latest version of this is highlighted in the Seattle Times which cites a study saying they can be part of a "green recovery." The study, however, uses a statistical trick to make bad jobs sound good.

The study argues that "government investment produced more 'job hours' than tax cuts or traditional infrastructure spending." There is a reason that the study focuses on "job hours" rather than growth or productivity: green jobs require more labor to do less.

For example, it is sometimes argued that renewable energy is better because it creates more jobs than other energy sources. For instance, a California campaign to promote solar notes "Solar Photovoltaics create more jobs per Megawatt of capacity than any other energy technology."

This is a foolish argument. We could create more jobs in agriculture by banning tractors and requiring human labor to plant and harvest. This would create more "job hours" in agriculture. Would anyone support this? Of course not. It would make us all poorer. The jobs would be horrible and pay poorly and it would certainly raise the cost of food. Promoting a particular policy because it is more labor intensive is a sure path to economic ruin.

The Times article also questions "stimulus" spending on highways, saying "as if peak oil and global warming don't matter." The peak oil theories, which argue that oil is beginning to run out leading to severe economic impacts, have been around for some time and traditionally heat up when oil prices rise, as they did last summer. Freakonomics co-author Stephen Dubner addressed peak oil hysteria recently on his blog, noting "It is always interesting to watch what happens when the media latches onto a given issue and then, as the reality on the ground evolves — sometimes radically — the media fails to catch up to, or even monitor, the changes. This means the public is stuck with an outdated version of conventional wisdom which, even if it were true in the first place, is no longer so."

The politics of climate change are going the route of many other such issues, with proponents of the policy making dramatic, but inaccurate, claims. When the facts catch up, proponents simply move on to the next outrageous claim, always trying to stay one step ahead of the facts. Claims of green jobs and a green recovery are the latest iteration of that process.

Does the Governor’s climate change EO have power of law?

May 22, 2009 in Blog

Yesterday, Governor Gregoire issued Executive Order 09-05, which directs state agencies to look for ways to reduce the states greenhouse gas emissions.  However, there appears to be significant a difference between what the Governor is saying and the legal authority of Executive Orders.

In the Governor’s press release announcing her Executive Order, the Governor said, “We can’t further delay action on climate change.”  She continued:

“This executive order benefits our economy as much as our environment. It will protect our natural resources, while creating thousands of green-collar jobs and strengthening our state’s competitiveness in the global race for a clean energy economy.”

In addition, while speaking at her press conference to discuss the Executive Order, the Governor established a tone of urgency.  She said:

“Are we going to simply sit and do nothing and allow the status quo? Or are we going to exercise the kind of leadership…to address climate change.”

Clearly the Governor is conveying a message of action, but does an Executive Order really provide the Governor with the teeth necessary to implement the action she is calling for?

In 1991 the Attorney General’s office issued an opinion, AGO 1991 No. 12, regarding the use of Executive Order that, in part, concluded:

“The legislative authority of the State of Washington is vested in the Legislature.  In absence of a statute or constitutional provision that serves as a source of authority authorizing the Governor to act, the Governor cannot create obligations, responsibilities, conditions or processes having the force and effect of law by the issuance of an executive order.”

In light of the AGO from 1991, perhaps the Legislature,  which chose not to implement similar policies during the past legislative session, will want to ask the current Attorney General to review Executive Order 09-05 to ensure that the Governor has not exceeded her legal authority.

In Case Democracy Doesn't Work

May 21, 2009 in Blog

The Environmental Protection Agency is in Seattle today to hear testimony on their effort to regulate carbon emissions to mitigate the impact of climate change. One theme is emerging in government efforts on this issue -- don't leave legislation to legislators.

This was put bluntly by a professor from Yale in today's Seattle Times.

"In effect, the prospect of EPA regulation is a bulwark against Congress falling down on the job," said Dan Esty, a Yale University environmental professor.

The philosophy expressed here is that constitutional checks and balances from elected representatives are useful only to the extent Congress does what is "right." Otherwise, the executive needs to step in and do whatever is necessary, other branches of government, and public opinion, notwithstanding.

That general philosophy was put into action today in Washington when the Governor, who previously argued that the legislature must endorse her climate change legislation, suddenly realized that legislative approval was not needed. The Democratic majority in the legislature rejected the Governor's bill. As a result, she today announced an executive order that mirrored many of the elements of the bill lawmakers turned down.

Here is the intent language of HB 1819, which failed to clear the House.

NEW SECTION. Sec. 1. The legislature finds that Washington should maintain its leadership on climate change policy by implementing a cap on carbon emissions and developing strategies to achieve those reductions, including continuing Washington's participation in the design of a regional cap-and-trade program with the western climate initiative.

Here is the language included in the Governor's executive order today. The Governor ordered:

The Director of the Department of Ecology to:  (a) Continue to participate in the Western Climate Initiative to develop a regional greenhouse gas emission reduction program and to work with the federal Administration, Washington’s congressional delegation and appropriate committees to help design a national greenhouse gas emission reduction program that reflects Washington State priorities.

The Governor herself testified before the legislature in an effort to get support for the above language. The bill, despite that effort, died. In an opinion piece in April, the Governor wrote "Now we need a strong climate action bill from this year's Legislature to grasp the opportunities that await us." The question is, what made the Governor suddenly realize that that legislative support she had sought for a strong climate action bill was no longer necessary?

Budget Tamiflu

May 21, 2009 in Blog

Interesting column today in the Seattle Times by Joni Balter on taxes and state budget problems. The focus of the article is how politicians in Washington claim if only the state had an income tax there wouldn't be any budget problems and how politicians in Oregon claim the same if only their state had a sales tax. Of course, as Balter points out, California has both and look at where that's left the state.

Here is the conclusion of the column:

"Washington and Oregon can trade a sales tax for an income tax or vice versa. But either way, both states will get sick in a down economy. There is no immunization from these tax systems for economic flu."

There is one way to avoid catching the budget flu, however: spend !
healthier (more responsibly) and not stay up all night binging away your savings.

Regardless of how you slice up the tax structure, states need to use a “three-legged stool” of sound budgeting:

  • Meaningful spending limit;
  • Protected 10% reserve account (so you don’t have to resort to tax increases or deep spending cuts in the bad times); and
  • Limiting base expenditures to core functions within the revenue forecast.

Here are the types of questions that should be asked before any activity receives taxpayer money:

  • Is the activity a core function of government or commercial in nature?
  • If it is a core function, can the service be provided more efficiently and effectively through competitive contracting?
  • Does it provide a broad public benefit or only serve a special interest?
  • Does it duplicate the activities of non-profits or other private initiatives?
  • Does it duplicate the efforts of other state agencies or programs?
  • Does the activity demonstrate quantifiable performance?

In fact, you could say that asking and answering these questions combined with utilizing sound budgeting tools is the equivalent of taking budget Tamiflu to head off the cyclical "economic flu" season.

Wrapping up the 2009 Legislative Session - Small Business Style

May 21, 2009 in Blog

When the Governor signed the budget bills yesterday, she wrapped up the work of the '09 Legislative Session. How did the business community fair? Not bad, considering all the proposals that were in the works.

At the onset of the session I, among many others, were fairly certain that we would see the Legislature push through pretty large tax increases to help shore up the $9 billion budget shortfall. Things came very close there towards the end with the proposed sales tax increase dying in the last stages of the session, and the high-income tax also falling by the wayside. However, there are about $300 million in new "fees" that the business community and citizens will have to fork over during the next biennium (see more on the fees).

For small businesses, there were some baby steps toward improving the!
business climate. SB 5042 will provide a waiver of penalties for small businesses that incur paperwork violations for the first time. Again, baby steps but a step in the right direction. I was encouraged, however, that so many of WPC-type regulatory reform ideas were introduced as legislation (e.g. executive sign-off on agency rulemaking, increasing legislative oversight of rulemaking activities, sunset provisions, and more). As Session progressed and economic stimulus became one of the top issues, WPC asked instead for a "de-regulatory stimulus package." Let's make Washington's morose regulatory climate a little easier for businesses to understand and therefor encourage more entrepreneurs to make that leap into small businesshood.

During the interim the Center for Small Business will continue!
to ascertain what the new rules and regulations mean for small businesses. We are also working on finalizing plans for the 2009 Statewide Small Business Conference, to be held in the Fall. This Conference will also address what happened this year and look ahead to the 2010 Legislative Session and let small business owners contribute their own thoughts and recommendations to the policy process. After all, if, as a small business owner, you are not involved in the policy process, you'll likely be unhappy with the results.