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

NY state sets the tone for regulatory reform

August 11, 2009 in Blog

New York, often thought of as the poor man's version of California when it comes to cautionary tales, last week managed to set a good example when Governor David Paterson handed down an executive order aimed at cutting unneeded regulations on businesses.

"Executive Order No. 25 establishes a Regulatory and Review Program to eliminate or revise antiquated and burdensome regulations on businesses, local governments, health care providers and other regulated entities, and focus the State's regulations on those necessary to retain and strengthen critical protections for public health, safety and welfare."

The press release states that the executive order is a significant part of an overall agenda to reduce unnecessary burdens and mandates on local governments and businesses to help stimulate the economy and keep taxpayers'!
liability down.

Among some of the program particulars:

  • The Review Committee will invite comment from the public on whether existing regulations are unnecessary, unbalanced, or unwise.
  • Participating Agencies will compile the list of complaints and prioritize those the public is most concerned with.
  • Within 45 days, the Participating Agencies will complete their analysis of the affected regulations and use cost/benefit analysis to recommend action.
  • The Review Committee will report its progress regularly to the Governor

New York has had an Office of Regulatory Reform since 1995. In fact, WPC has referred to it as something Washington state should consider. We have the Office of Regulatory Assistance in this state -- and while it is good that Washington policymakers recognize the business community needs some help handling regulations, the better option would be to have an office of regulatory reform -- an office tasked with making regulations easier to understand, less burdensome and our systems more efficient.

Policymakers in Washington have passed various bills in the past to help alleviate undue regulations that disproportionately hit small businesses. However, a lot of these do not have teeth. In other words, agencies may have to do an internal report on how any new major rulemaking will affect small businesses, but there is little to keep that new regulation from be!
coming a reality, much less any incentive on the agency's part to limit the impact its rules have.

There is a lot to be done on regulatory reform in Washington state and not to sound cliche but it is going to take some out-of-the-box thinking to try and reform our system so that state government treats businesses more like a customer, rather than a subject.

We can reform our regulatory structure to minimize the burden they place on businesses while still maximizing the intent of those regulations -- health, safety and environmental protection. Emulating New York's Office of Regulatory Reform would be a good place to start.

Candidates respond to open government questionnaire

August 10, 2009 in Blog

Just in time for the August primary election the Washington Coalition for Open Government has published the responses to its candidate questionnaire. Among those responding were several candidates for King County Executive. Here are the answers for Dow Constantine, Fred Jarrett, and Alan E. Lobdell.     

Questions gauged candidate's support for:

  • recording executive sessions;
  • restricting the use of attorney-client privilege to deny records release;
  • creating an independent open government ombudsman;
  • requiring open government training for government employees and elected officials;
  • archiving electronic records; and
  • stopping abuse of third-party injunctions.

Here is the link to all the candidate surveys returned so far. Though the deadline was July 31, surveys will continue to be posted as received.

According to the Coalition's website:

The Washington Coalition for Open Government represents individuals and organizations intent on preserving and protecting Washington’s open government laws. Members of the Coalition represent a broad range of interests including news media, public affairs, law, academia, labor, business, current and retired public officials, community activists, and others. Its mission is to represent the public in matters where open government issues are raised, are threatened, or deserve broader exposure.

The Coalition desires to make known to its members and to the general public the positions of candidates for public office on open government issues. To that end, we have cr!
eated the candidate questionnaire.

Washington Policy Center is a member of the Coalition. Here are the open government recommendations from our latest Policy Guide:

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

Microsoft moves data center out of Washington - taxes largely to blame

August 7, 2009 in Blog

In what should be a larger news story than it is so far, Microsoft on Tuesday announced via its blog that they will suspend construction of their Windows Azure data center and re-locate to another state (right now the prevailing rumor is San Antonio, Texas).

Reason Foundation releases Annual Privatization Report

August 6, 2009 in Blog

The Reason Foundation has published its 23rd Annual Privatization Report detailing "the latest trends and examples of how public officials are reducing costs and improving service delivery through public-private partnerships, outsourcing, and performance-based government."

Here is an excerpt from Reason's press release:

"Governments are swimming in red ink and realizing the effects of the recession will be felt long after the economy recovers," said Leonard Gilroy, editor of the report and director of government reform at Reason Foundation. "Interest in privatization is sky-high and rightly so. Now more than ever, policymakers need to study their priorities, re-examine what are really core government functions, and then tap the private sector's experti!
se in all of the areas where they can save taxpayer money and improve the quality of services."

The Annual Privatization Report highlights developments across the country, including:

  •  Florida's Council on Efficient Government identified 511 outsourced projects in 2008. A review of 21 potential privatization projects forecast $94 million in savings for taxpayers.
  • Louisiana Gov. Bobby Jindal established a Commission on Streamlining Government that is using privatization to help reduce the size and cost of state government.
  • California Gov. Arnold Schwarzenegger signed a public-private partnership law that enables and encourages the private sector to fund and manage road, prison and courthouse projects.
  • New York Gov. David Paterson created a Commission on State Asset Maximization to identify areas where public-private partnerships can save the state money.
  • New Jersey policymakers are achieving a major environmental goal by privatizing the cleanup of nearly 20,000 contaminated properties in the state. 

The report highlights this positive development for Washington:

The Washington State Legislature approved a pilot project in performance-based contracting for foster care that the governor signed into law May 18. Under the plan, the first pilot programs will be launched statewide in July 2012. After two and a half years, the Washington State Institute for Public Policy will evaluate the pilot program for the governor, who will then decide whether to expand or terminate it.

By January 1, 2011, the Department of Social and Health Services (DSHS) must consolidate and convert its existing contracts for child-welfare services to performance-based contracts linking the contractors’ performance to the level and timing of reimbursement for services. DSHS, as well as private contractors and Indian tribes, may provide child-welfare services, including case-management ser!
vices, under performance-based contracts. Nonprofit private contractors must receive primary preference over for-profit contractors.

With the exception of this effort, the zeal for competitive contracting was in short
supply in Olympia this year. A proposal to create a Washington competition council
(SB 5409) didn't receive a public hearing. Also, the Washington Federation of State Employees is suing to weaken the state's already underused competitive contracting process. A decision by the Appeals Court on that case is pending.

How does Washington's pension administration compare?

August 5, 2009 in Blog

One of the few benefits of the current economic situation is the renewed interest by government officials to base policies on the ability to reach performance expectations. Of course, to hit performance goals you need to know what benchmarks to use. It looks like the state Department of Retirement Services (DRS) is taking this fact to heart. Here is a copy of a proposed sole source contract posting DRS issued this morning:

"The Department of Retirement Systems (DRS) contemplates awarding a sole source contract to CEM Benchmarking, Inc. (CEM) for a twenty-four month period to provide complete public pension administration benchmarking services. This contract may be extended for up to an additional two, twelve-month periods. Services include preparation of a benchmarking report analyzing and comparing public pension administrative and business functions, coordinating a !
conference for public pension systems, providing 'best practices' on a common public pension administrative aspect, and, providing a peer network forum.

The benchmarking report includes analysis of performance and cost data from a minimum of fifteen public pension administrators, each having more than 200,000 active members and annuitants; analysis of at least twelve common public pension administration activities; analysis of at least five factors contributing to cost differences; and, sufficient statistical analysis to enable DRS to validate these conclusions. CEM will also coordinate a conference for public pension systems, which will cover current issues of interest to public pension administrators; prepare one best practice analysis on a common public pension administration service; and, provide a peer network forum of other public pension systems.

CEM specializes in providing benchmarking services for public pension systems that administe!
r defined benefit and/or defined contribution plans. CEM has a!
lmost twenty years of experience in pension benchmarking and currently maintains over 500 clients worldwide. CEM is the only known specialist able to provide independent analysis of the factors that make public pensions unique.

The contract will be issued on or about August 25, 2009. Offerors contemplating the above requirements are required to submit capability statements detailing their ability to meet DRS’ requirements within five (5) calendar days of this announcement. In the absence of other qualified sources, it is DRS’ intent to make a sole source award of the contract."

It will be interesting to see how Washington's pension system compares. One recent analysis of the state's pension system indicates Washington may be out of the norm in how it invests its portfolio. According to a report by the Evergreen Freedom Foundation:

"The Washington State Investment Board was considered a 'daring, cutting-edge investor,' according to Institutional Investor Magazine, because of its decision to risk more of its pension portfolio on private equity than any other major state plan.

In 2007, the private equity market began to falter, and $154 billion worth of leveraged buyouts were pulled. Private equity investors were warned they could expect lower returns. Despite these facts, the board’s trustees voted to increase the state’s private equity allocation from 17 percent to 25 percent—significantly outpacing the next-most-aggressive state funds in Oregon and Pennsylvania, at 14 percent.

Wilshire Associates reports that across all 125 state pension plans in 2008, the average private equity asset allocation was 5.6 percent. Washington’s 25 percent allocation is more characteristic of an endowment fund than a pension fund.

The state’s priv!
ate equity losses could prove to be worse than what is shown on paper b!
ecause they are illiquid—meaning they are traded infrequently and values are hard to establish. In December 2008, the investment board’s then Executive Director Joe Dear said in an interview that 'private equity is valued on a lag basis, so we haven’t begun to see the real effects of the downturn in the private equity portfolio.'"

Report recommends major IT changes

August 3, 2009 in Blog

A report released earlier this summer could fundamentally alter the state's IT (Information Technology) Governance if acted on by state lawmakers. Among the recommendations include eliminating up to 832 Full Time Equivalent (FTE) IT employees and centralizing the state's IT systems. Titled "An Evaluation of Washington State’s Approach to IT," the report notes:

The State budgeted approximately $1.39 billion on IT personnel, goods, and services for the 2007-2009 Biennium – a 20% increase over the previous biennium. In the face of the current fiscal crisis, now is the time to evaluate ways to improve the efficiency and cost effectiveness of IT. However, efficiency and cost effectiveness alone is not enough. Ultimately, IT must support the business of government. As Gove!
rnor Gregoire stated in the 2009-2011 Budget Highlights:

“These are hard times for everyone. Our families are tightening their belts, and that’s what government needs to do. The State must squeeze every ounce of value out of every taxpayer dollar while maintaining our priorities…”

Here is a summary of the findings and recommendations:

IT FTE
IT costs

IT governance

IT service
IT

IT reforms are!
high on the Governor's agenda for the coming session and will be part of the State Auditor's statewide performance review. These efforts coupled with this report could mean the state's IT systems are in store for a major reboot.

More Talk on a Second Stimulus Package

July 24, 2009 in Blog

Stateline.org today carries a Q&A session with state legislators from both parties around the nation asking "What would make you push for a second stimulus?"

The answers vary from "anything" to "hell no". Interesting stuff.

A second stimulus? Consider the ramifications first.

July 22, 2009 in Blog

Some policymakers in D.C. and syndicated columnists/economists have already begun talking about the need for a second stimulus package to bolster the $787 billion passed by Congress in February.

But before they move to quickly to spend even more taxpayer dollars on various government projects, a little reading should be in order; namely, this report from Wells Fargo.

In a "Decision-Makers' Guide to Stimulus Part Deux," the authors of the paper first take Vice President Biden to task for saying, "the truth is, we and everyone else misread the economy." The authors point out that, "Everyone did not misread the ec!
onomy. Contrary to political rhetoric, economic analysis outside the beltway clearly anticipated a nine percent plus unemployment rate even with the stimulus package."

One of the major concerns over the last several months as government spending ramps up, is inflation. Again, the authors of the paper address this:

"Unfortunately, a second stimulus could add too much to the growth momentum to be consistent with stability in the long-run inflation interest rates and currency expectations. Inflation/debt concerns, which are already rising, would accelerate quickly and thereby prompt negative interest rate/dollar reactions that would create a boom/bust cycle..."

The stimulus/bailout mentality goes back to the reality that politicians don't always make the most sound economic decisions because they are influenced by the immediate short-term political gains and do not take into account, or minimize, the long-term costs!
. But this type of thinking has immediate economic ramificatio!

Stimulus funds GMAP

July 22, 2009 in Blog

Today's GMAP (Government Management Accountability and Performance) public meeting was on the state's stimulus efforts. Lots of interesting tidbits were reported including:

  • $4 billion has been allocated to the state - $827 million spent so far.
  • The Governor believes the states are being used as pawns in a political fight in D.C. on whether the stimulus package is working; she complained that some Senators were questioning the value of the stimulus package prior to her testimony yesterday in Congress on green jobs.
  • The Governor reported that her colleagues expressed concern at the national governors meeting about what type of information is to be reported to the feds and the time line for those reports.
  • The bulk of the state’s stimulus jobs are at Hanford. The Governor is concerned that some of those jobs aren’t being filled by Washingtonians; instead the contractors are hiring out of state workers.
  • The Department of Transportation expects to create or retain 5,000 jobs as a result of stimulus funds.
  • The State has obligated the 4th highest amount of transit funding in the country.
  • The transportation construction market may have hit its saturation point as recent bids are coming in at or above engineer estimates in contrast to previous bids coming in below.
  • There is a high correlation with “legislative earmarks” and projects not coming in on time or on budget due to the circumvention of the normal vetting process and review. 

Here are additional details (click on the links):

Democrats’ Proposed Health Plan Leaves 17 Million Uninsured

July 15, 2009 in Blog

The new health care reform plan unveiled today by Democrats in Congress is not universal care.  The Democrat-proposed plan provides for 17 million people to go without health care coverage.  The plan carries other risks, such as:

  • It raises taxes during a recession.  Higher taxes, even on the so-called rich, means there would be less money available for investment and job creation, delaying the recovery and increasing hardship for people who are out of work.  Business owners would slow or stop hiring, as they wait to see what their new payroll tax will be, and whether they will be forced to pay the proposed 8% “pay-or-pay” penalty each year.
  • The government option would crowd out private coverage.  Many workers would be forced onto the government plan against their will, as employers drop their current coverage in an effort to shift health costs to taxpayers.  Yet the President’s family and those of Members of Congress would not be forced onto the government option plan; as dependents of federal employees they would continue to receive first-class coverage.
  • Eight million people with Health Savings Accounts (100,000 in Washington) might lose their coverage if it doesn’t meet the federal definition of mandated insurance.  Innovative patient-centered medical practices in Washington, such as Dr. Erika Bliss’ Qliance clinic in Seattle, would be forced to close.

Here's a good illustration of how the proposed health care plan would work was released by the Joint Economic Committee.

House-Democrats-Health-Plan