Open Government

WPC's Center for Government Reform's mission is to partner with stakeholders and citizens to work toward a government focused on its core functions while improving its transparency, accountability, performance, and effectiveness for taxpayers.

Open Government Blog

Here comes a 30-40% increase to your property taxes: HB 2261

April 17, 2009 in Blog

HB 2261, the bill which passed the Senate last night, resembles Initiatives 728 (smaller class sizes and other reforms) and Initiative 732 (teacher pay increases).  Here we have yet another expensive, unfocused education spending program without a revenue source. 

 

This time, however, legislators stand poised to expand the definition of basic education to include a variety of additional programs, costing perhaps as much as $7 to 8 billion.  The legislation provides no fiscal breakdown of the cost categories for this 50% increase to state spending on education.   

 

Why would we expand the definition of basic education, when we can't even get basic education right? 

 

HB 2261 sets the stage for shifting the blame for our failing schools to the taxpayer, even though the blame lies squarely with the legislature and with the schools themselves.

 

I can hear it now:  the schools are failing because you (the taxpayer) won’t agree to an increase of 30-40% to your property taxes. 

 

Schools can be improved within existing revenues, without HB 2261 spending formulas, without a prototype school model, without CORE 24 or full-day kindergarten.  See our "Eight Practical Ways to Reverse the Decline of Public Schools," at http://www.washingtonpolicy.org/Centers/education/policybrief/Education_Reform_Plan.html.

 

Taxpayers can instead demand that schools:

1) Put the principal in charge of his budget and staff

2) Give parents choice among public schools

3) Let teachers teach

4) Double teacher pay

5) Replace the WASL

6) Create no-excuses schools

7) Make the Superintendent of Public Instruction an appointed office

 

Tracking federal "recovery" spending

April 17, 2009 in Blog

The astronomical $787 billion federal “recovery” package was back in the news this week as thousands of Washingtonians took to the streets across the state to protest among other things taxes, spending, and the federal bailout packages. According to the Washington State Patrol, the tax and spending protest was 5,000 strong in just Olympia – the largest rally by far of the year.

Senate Ways & Means budget amendments

April 16, 2009 in Blog

Last night the Senate Ways & Means committee adopted numerous amendments to the proposed Senate budget. Since the amendments are not available online, here is a brief summary of some of those adopted:

  • Requiring a study by the Joint Legislative Audit and Review Committee (JLARC) of the state’s recreational boating programs. (This in contrast to our suggestion yesterday for JLARC to review how well the state is following the current performance-based budgeting requirements already in law.)
  • Suspending the Select Committee on Pension Policy (SCPP) during the 2009-11 biennium. (SCPP studies issues and policies affecting the state's public employee retirement systems and makes recommendations to the Legislature regarding changes. The base Senate budget proposal defers over $400 million in pension contributions.)
  • Directing the State Board of Education to develop a comprehensive accountability index and a “process for addressing performance challenges that will include the following features:
(A) An academic performance audit using peer review teams of educators that considers school and community factors in addition to other factors in developing recommend specific corrective actions that should be undertaken to improve student learning;

(B) a requirement for the local school board plan to develop and be responsible for implementation of corrective action plan taking into account the audit findings, which plan must be approved by the state board of education at which time the plan becomes binding upon the school district to implement; and

(C) monitoring of local district progress by the OSPI. The proposal shall take effect only if formally authorized by the legislature through the omnibus appropriation act or other enacted legislation. 

In coordination with the OSPI, the state board of education shall seek approval from the United States Department of education for use of the accountabilit!
y index and the state system of support, assistance, and intervention, to replace the federal accountability system under . . . the no child left behind act of 2001.”

  • Authorizing a 14 percent per year tuition increase for four-year colleges and universities to increase “budgeted enrollment levels by 3,475 full-time equivalent students each year to account for the additional $83 million of tuition revenue resulting from the higher annual increases.” (The House Ways and Means last week adopted an amendment to remove the budgeted enrollment levels from its budget proposal.)

As for those amendments that failed, The Olympian has this story about "Senate Republicans unsuccessfully propos[ing] a 2 percent cut to the amount of money used to cover health insurance costs for state employees."

Moving towards a performance-based government

April 15, 2009 in Blog

As lawmakers put the finishing touches on their 2009-11 budget proposals, there is still time to shift the focus to needed reforms to ensure the state is moving towards a performance-based government.

One way to facilitate this debate could be to review just how well the state is following the current performance-based budgeting requirements already in law.

JLARC (Joint Legislative Audit & Review Committee) is the perfect vehicle for this type of exercise. If interested, lawmakers could insert a proviso in the budget for JLARC to review current requirements in the statutes governing budget development. It could direct JLARC to:

Evaluate the executive branch’s performance measurement requirements related to budget requests and budget development (RCW 43.88.030 and RCW 43.88.090).
 
The study will focus on these statutory provisions by evaluating the extent to which:
 
(1)    State agencies establish goals for achieving results that conform to statutory direction and limitations.
 
(2)    State agencies establish quality and productivity objectives that are outcome-based, objective, and measure progress toward goals.
 
(3)    The office of financial management assists state agencies with the development of performance measures.
 
(4)    State agencies budget requests link performance measures to achievement of quality and productivity objectives.
 
(5)    The office of financial management analyzes whether the measures for state agency activities are demonstrating progress toward objectives.

(6)    Agency budget requests !
include proposals for improvement when the office of financial management identifies insufficient progress toward goals.
 
(7)    The governor’s biennial budget proposal includes indicators that demonstrate measurable progress toward priority results.

 

Although the current budget proposals reduce JLARC’s funding, lawmakers should weigh the benefits of directing JLARC to conduct this type of review to help lay the ground work for the Legislature to move towards performance-based budgeting.

Will your state tax bill go up?

April 15, 2009 in Blog

By now you’ve either closed the books on the 2008 tax year or are putting the finishing touches on your tax return. If you don't by midnight, however, you’ll be hearing soon from the IRS and becoming intimately acquainted with what it means to face federal tax penalties. 

But just because you can put last year’s taxes behind you doesn’t mean it’s too early to look ahead to what your bill may be next year. In fact, if some state House and Senate Democrats have their way your 2009 state tax bill might be much higher.

The current debate in the Legislature is whether to put a tax increase package on the ballot for voters to approve.

Senate Democrats are leaning towards an income tax for the “rich.” House Democrats are tossing around a “temporary” sales tax increase.

Meanwhile 32 state and national economists have warned that tax incre!
ases will damage Washington’s economy and hamper economic recovery.

The state's editorial boards have also weighed-in urging lawmakers to balance the budget without tax increases. Here's a sample of those pleas for tax restraint:

The Senate takes an important step to restore arm's length transactions with unions

April 14, 2009 in Blog

Last night the Senate voted 30-20 to pass an amendment to a bill, HB 1329, which considerably slowed down the union-led effort  to force small day care workers into a union.  A study will now be undertaken to determine if collective bargaining improves quality of day care or benefits for workers, or not.

Richard Roesler's blog points out that critics of the bill were also uncomfortable with a provision of the bill that would have taken union dues directly out of the state's subsidy payments, instead of directly from workers.  (This involves a considerable sum of money---$6.1 million in dues from subsidy payments to the union of family day care providers.)

Last legislative session, we pointed out in the Seattle PI here that the proposed bill would turn the state into a bill collector for the union, essentially allowing the state and union to act as one party for the purpose of dues collection, threatening the interest of the public and taxpayers to understand what is really going on.  I said : "When you have a contract, you are supposed to have an arm's length relationship so that the interests of the parties are clearly defined and not veiled to the public."

Another analogy can be made here to illegal contracts of adhesion, which are contracts so imbalanced in favor of one party over the other that there is a strong implication it was not freely bargained, for example, a rich landlord imposing onerous contract provisions on a poor tenant, or a large and powerful union imposing onerous contract provisions on small day care centers.

By passing this amendment, our legislators have demonstrated their understanding of the need to put a powerful union at arm's length from the state.  The legislature is wise to prevent the deduction of union dues from state subsidy payments.  The legislature should consider that the same lack of arm's length, the same appearance of impropriety, exists when the state directs day care centers to deduct union dues from workers' paychecks. 

Every other professional organization (Bar Association, the American Institute of Architects, the Professional Engineers, the Association of General Contractors, to name just a few) has to collect dues from its members without help from the state.   Why is the state in the business of helping unions collect their dues?

Legislators should extend this arm's length thinking to other contracts with other unions.  Local school districts automatically deduct teachers' union dues from their paychecks.  This allows powerful unions to act like rich landlords, forcing school districts to agree to contracts they cannot afford. 

Green Bonds - are they worth it?

April 14, 2009 in Blog

Today the House Capital Budget Committee will consider HB 2334, asking voters to approve a $3 billion package to fund capital improvement projects that promise increased health, safety and energy efficiency in public facilities.

Supporters of the legislation claim the bonds would be repaid in part from cost savings of improved energy efficiency.  In addition, proponents highlight requirements to use performance based contracting to achieve the savings.

Unfortunately, these claims are misleading and could potentially threaten the bond ratings of other investments.

Proponents of HB 2334 are wrong to tie promises of energy savings to cost repayments through performance based contracting.  Performance based contracting was established as a tool to ensure that, when a contractor makes promises through a contract, results are achieved.

The State's General Administration (GA) website provides a good explanation of how the State has used performance based contracts on a variety of projects, with promising results.

According to the site about 100 projects have used this system.  These projects have cost taxpayers more than $150 million to complete with a claimed savings of roughly $11.5 million annually.  At this rate of return it would take more than thirteen years to pay back the costs of all of these projects.  These numbers, however, have several flaws.

For instance, they are not audited and it is difficult to promise actual energy savings.  When a building uses the performance based contract process, an inspection will identify what systems can be changed to achieve greater efficiency.  If the agency chooses to change light fixtures, a contractor can promise savings from changing each fixture because they are essentially changing light bulbs for more energy efficient bulbs.  The contractor, however, does not guarantee that the light fixture will be utilized or operated in the same manner as the previous fixture, and, according to the GA, is unlikely to promise a return on investment through cost repayment.

The "annual savings" identified by the GA's spreadsheet are snapshots in time and are not meant to predict actual savings.  The GA is honest that these numbers do not represent actual, audited energy savings.  Given the difficulty they are having identifying those savings in the current, modest program, how likely is it that they will do better when the program spends thirteen times as much in a two year period over what was spend during the past 10 year period?

Given the amorphous nature of the energy savings estimates, is it wise to base the State's bond payments on hoped-for, but hard to recover, energy savings?

While it may be true that the money spent will provide greater health or safety improvements, there is no data available to suggest that this results in cost savings.  In fact, as our research shows (What Washington's "Green" Schools Tell Us about HB 2334's $3 Billion Spendnig Plan), such modifications to systems that would improve air quality, like an HVAC system run more frequently to bring in fresh air, often results in higher energy cost.  Savings have yet to be realized as was promised in previous energy saving packages.  The performance data available thus far for "green" schools provides legislators with a valuable tool for better understanding the promises of cost savings and energy efficiencies in HB 2334.

In addition, the proposal to increase the indebtedness of the State has caught the attention of Democrat State Treasurer Jim McIntire.  In a statement regarding the $3 billion bond package he noted that, "added debt called for in HB 2334 is too much" and that, "It would threaten our credit rating and would affect the rest of our investments in transportation and public infrastructure."  Harming the credit rating could lead to an increase in rates and additional cost to the taxpayers, minimizing further any potential benefits from the proposed projects.

Finally, if these projects will truly deliver the claimed savings, one has to wonder why they were not funded when the state had surpluses.  The State's 2007-09 biennial Capital Budget is $4.6 billion and the 2009-11 proposed biennial Capital Budget before the House is $2.9 billion with the bonds making up approximately half of these budgets.  Increasing the debt to fund projects that have not met priorities when funding was available makes the return on investment even more unlikely.

As the House Capital Budget Committee considers HB 2334 it is important to understand that the proposal before them over promises on what it can deliver.

Allow universities to set market-based user fees

April 8, 2009 in Blog

Mark A. Emmert, president of the University of Washington, had an op-ed in The Seattle Times today requesting that lawmakers allow the state's higher education institutions to raise tuition fees. Emmert noted:

Obviously, Washington has a severe budget shortfall, and balancing
the budget requires very difficult decisions. The magnitude of the
proposed higher-education cuts, however, goes far past what can be
managed through efficiency measures and new ways of providing
high-quality education.

The leaders of our four-year colleges and universities understand
that our schools must take cuts. But we also know that we can keep
students coming to school and graduating on time if we are simply given
more flexibility on tuition. We can help our students and our state
without new state money. Moreover, we can fix much of this problem
without denying access to students because of their income or family
background.

The UW has the lowest tuition of any of its peers and is one of the best bargains in the country. With increased financial aid and the expanded federal tax credit, we can remain an excellent value for our families, maintain our world-class quality, and not slash the number of students we admit.

To give higher education the opportunity to resolve this crisis without requiring more state money is the only responsible thing to do. To do otherwise is to deny thousands of our citizens a chance to succeed in the knowledge economy.

This echoes an editorial that ran in The News Tribune earlier this week

There's a partial remedy at hand: higher tuitions. Emmert and others have sought authority to raise tuition by as much as 14 percent. Lawmakers are ba!
lking. The House proposes 10 percent; the Senate, only 7 percent.

Olympia needs a mental adjustment. In good times, when direct appropriations are easier to come by, capping tuition might make sense. In this emergency, business as usual could be disastrous.

A 14 percent tuition hike would not be the burden it sounds like. With Congress expanding Pell grants and the federal tuition tax credit, the increase in financial assistance will more than offset another 14 percent in tuition - which would be $875 a year at the UW.

Without getting into the question of broader higher education reforms at this time, this is a reasonable request.

Lawmakers should allow the state's universities the full authority to set market-based user fees to fund their operations. The same holds true for state parks. This will allow general tax revenue to be freed for vital core functions.

House Ways & Means budget amendments

April 7, 2009 in Blog

Today the House Ways & Means committee adopted numerous amendments to the proposed House budget. Among those adopted:

  • 1244-PS AMH WAYS DRIV 195: "Requires the Evergreen State College to expend $200,000 in 2009-11 on the Labor Education and Research Center."
  • 1244-PS AMH WAYS DRIV 167: "Removes the state support enrollment targets for the four-year universities and colleges and the State Board for Community and Technical College system."
  • 1244-PS AMH WAYS GAVC 031: "Requires the parks and recreation commission to not close any state parks during the 2009-11 biennium, and to report to the legislature by January 10, 2010, on its budget and resources related to operating the parks for the remainder of the 2009-11 biennium."
  • 1244-PS AMH WAYS PAME 039:
    "Directs the State Auditor to conduct biennial audits of local
    governments with revenues of $10 million or less and no findings for a
    three year period." (Currently these entities are audited annually under federal grant requirements if they spend $500,000 or more of federal money)

The first two amendments are of particular note in light of this blog post we did last week highlighting the budgeted enrollment slots for higher education (the amendment removes those targets from the budget) and this audit finding calling into question the legality of the Evergreen State College's Labor Center activities.

House capital budget priorities

April 2, 2009 in Blog

Not to get lost in all the debate about the state's operating budget, the Legislature's capital budget proposals were also released this week. In years past the capital budget has been referred to as the "Fun Budget."

So what are some of the House capital budget priorities?

•    Apple Awards (for schools) - $250,000
•    Washington State Historical Society - $12,250,000
•    Eastern Washington State Historical Society - $1,939,000
•    Admiral Theatre-No Theatre Left Behind - $140,000
•    Artspace Everett Lofts - $1,000,000
•    Building a Foundation for Discovery - $250,000
•    Campus Consolidation (Cornish) - $375,000
•    Convert Key!
Bank To Everett's Plaza Theatre - $500,000
•    Cottage Renovation (Hedgebrook) - $20,000
•    Downstairs at the 5th - $800,000
•    Federal Way Performing Arts Center - $325,000
•    Gateway Center (Lummi) - $150,000
•    James Ctr for the Performing Arts (Sequim) - $150,000
•    Langston Hughes Performing Arts Center - $475,000
•    Legacy Project (Imagine) - $200,000
•    Modular Classrooms for Dance (Gladish) - $30,000
•    Museum Expansion (Maryhill) - $1,500,000
•    New Hands On Children's Museum  - $1,000,000
•    Phase II Renovation (Mt. Baker Theatre) - $1,000,000
•    Reconstruction of First Stage, Issaquah - $400,000
•    Seattl!
e Opera Center - Phase I Design - $650,000
• !
60;  Stage Two (Whidbey) - $450,000
•    Vashon Arts Center - $1,115,000
•    Visual Arts Education Center (Sno Co.) - $1,000,000
•    Viva Vera Capital Campaign - $70,000
•    WA Hall Acquisition and Rehab - $400,000
•    A Home for Opportunity - $325,000
•    Building the new Eastside Clinic - $1,900,000
•    Community Center for Sand Point Housing - $350,000
•    Donald G. Topping HOPE Center - $1,934,250
•    Dove House - $240,000
•    Duvall Multi-Service Center - $617,985
•    East Central Community Facilities Expansion Project - $231,500
•    El Centro de la Raza Safety & Systems Improvements -$250,031
•    Emmanuel Family Life Center - $!
400,594
•    Eritrean Community Center Expansion - $300,000
•    Family Services Center - $1,265,000
•    Ferndale Boys & Girls Club - $752,847
•    Giant Step - $520,761
•    Greenbridge Early Learning Center - $1,419,281
•    High Point Neighborhood Center - $2,000,000
•    Highline YMCA - $2,000,000
•    Milgard Work Opportunity Center - $1,850,000
•    Mt. Baker Planned Parenthood Education and Training Center - $881,847
•    Northeast Community Center Expansion - $1,800,000
•    Pierce County Therapy Center - $128,000
•    Rainier Vista & Rainier Valley Teen Center - $3,906,000
•    Repurposing Daybreak Star - $87,500
•  &!
#0160; Riverwalk Point Community Building - $79,253
• !
60;  Rotary Support Center for Families - $3,500,000
•    Technology Access Foundation Community Learning Space - $1,500,000
•    The Keller House Services Center - $600,000
•    YMCA/YWCA Central Spokane Facility - $3,500,000

Having fun yet?

(NOTE: CAPITAL SPENDING DOES NOT CORRELATE DIRECTLY TO SPENDING IN OPERATING BUDGET)