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.

What's New

Lawmakers passed 14% of tax or fee bills introduced in 2010

May 27, 2010 in Blog

The Office of Financial Management (OFM) has published its I-960 Bill Analysis Statistics for the 2010 Session.

According to OFM:

  • 206 tax or fee bills were introduced (7 percent of total bills introduced)
  • 29 tax or fee bills were adopted out of 337 total bills adopted (9 percent)

This means the Legislature approved 14 percent of the tax or fee bills introduced during the session. 

Here is a comparison with previous sessions:

2009

  • 152 tax or fee bills introduced (3 percent of total bills introduced)
  • 39 tax or fee bills adopted out of 583 total bills adopted (7 percent)
  • 26 percent of tax or fee bills introduced adopted

2008

  • 132 tax or fee bills introduced (4 percent of total bills introduced)
  • 14 tax or fee bills adopted out of 331 total bills adopted (4 percent)
  • 11 percent of tax or fee bills introduced adopted

Here are the I-960 updates for each tax or fee bill introduced:

Passed by voters in 2007, Initiative 960 required a two-thirds vote of the legislature to raise taxes. It also included several public information provisions. For each tax increase, the public was to receive:

  1. A description of each tax increase.
  2. A ten-year estimate of how much lawmakers increased the financial burden they place on taxpayers.
  3. A list showing how each lawmaker voted.
  4. Each legislator’s contact information.

Under Initiative 960, this information was to appear in the voters’ pamphlet for the November 2010 election. Since the Legislature suspended multiple provisions of I-960, Washington Policy Center will be publishing a "2010 Voters' Guide to Tax Increases" next month with the required details. 

Water-taxi report on costs disputed

May 27, 2010 in In the News
The Seattle Times
Source: 
The Seattle Times
Date: 
Thursday, May 27, 2010

Serve on your own dime

May 26, 2010 in Blog

Earlier this year the Legislature passed HB 2617 eliminating 45 boards and commissions. Among the provisions of the bill was the prohibition of reimbursement for travel or expenses for those serving on certain boards.

Yesterday the Director of the Office of Financial Management released a memo to executive branch agencies with details on how to implement this new policy:

"Beginning July 1, 2010 through June 30, 2011, members of certain boards, commissions, and other similar groups are prohibited from receiving an allowance for subsistence, lodging, or travel expenses if the allowance is funded by the state general fund. For the same time period, the use of private facilities by agencies, boards, commissions, and other similar groups !
is prohibited, regardless of fund source, unless an exemption is approved by the Office of Financial Management (OFM). Lastly, OFM is required to report to the appropriate fiscal committees of the Legislature by September 1, 2010, on costs associated with boards, commissions, and other similar groups . . .

All groups – regardless of fund source, class designation, statutory or nonstatutory – must:

  • When feasible, use a meeting format that does not require travel while still maximizing member and public participation;
  • Use a meeting format that requires members to be physically present at one location only when necessary or required by law;
  • Use state facilities whenever possible for meetings that require a member’s physical presence at one location;
  • Not use private facilities for meetings unless approved by me; and
  • Submit information to OFM on costs associated with groups for fiscal years 2008 and 2009."

For those not deterred by the new reimbursement guidelines there are numerous vacancies on the state's remaining boards and commissions. 

You can fill out an online application for the board of your choice here.

Distortionary Consequences of Increasing Government's Presence

May 25, 2010 in Blog

A very interesting and telling paper out of the Harvard Business School and the National Bureau of Economic Research takes a closer look at how government spending affects corporate investments. The result is fairly predictable but not unimportant and should serve as a warning to those in both state and federal government (as well as those in the private sector) who think that all the economy needs to turn around is a higher level of government spending.

"Do Powerful Politicians Cause Corporate Downsizing?" is the name of the HBS/NBER paper and is worth a read. The authors use a unique approach by taking a look at congressional chairmanships and the effect upon the chairman's district in regards to government money inflows and how the corporate world reacts. The result of a new chairman!
ship often results in a "spending shock," which tends to "significantly dampen corporate sector investment and employment activity."

This may sounds counterintuitive, since committee chairmen are often expected to, and lauded for, bringing home the bacon. But what the study's authors find is that the federal money replaces private sector investment. Why would a company spend its own capital to compete with the federal government, which can simply print its own money? Or, why spend your investor's dollars when the feds will pick up the tab? In the first instance, many times the resulting action is a plateau (at best) of private activity or a decrease in the form of layoffs (at worst).

There is no doubt, as the authors point out, that some firms stand to benefit from increased government spending. But the average firm contracts during government spending shocks, and the winners often reach the winner's circle via intense Congressi!
onal lobbying instead of through market merit.

There is!
a lot of data in this surprisingly easy-to-read study, but I'll leave you with one section that sums up nicely their analysis:

"The central finding of this paper is that positive shocks to the seniority of a state's congressional delegation cause large and persistent increases in government allocated funding to the states, and significant retrenchment on the part of the corporations headquarted in the state. This retrenchment appears to be a response to the large and persistent increase in federal funding that the state receives following the shock.

Following the appointment of a senator to the chair of a powerful committee, we estimate that his state experiences, on average, a 40-50 percent increase in its share of congressional earmark spending, and a 9-10 percent increase in its share of total state-level government transfers. At the same time, firms residing in the state cut their capital expenditures by 8-15 percent, reduc!
e R&D by 7-12 percent, and increase payout by 4-13 percent. Employment and sales growth are also impacted, as corporations scale back employment growth by 3-15%, and sales growth falls by up to 15%."

There is a reason why WPC and others consistently warn about the increasing footprint of government. We simply cannot ignore the real-world consequences of increased government expenditures, and more importantly, unpredictable "spending shocks" upon the private sector.

King County Property Taxes (radio)

May 25, 2010 in In the News
KUOW 94.9 (NPR)
Source: 
KUOW 94.9 (NPR)
Date: 
Tuesday, May 25, 2010

King County to citizens: back our tax increase, or we'll cut public safety

May 24, 2010 in Blog

County Executive Dow Constantine and the other Democrats governing King County want to impose a tax increase on people during a recession, imposing greater financial hardship on families to make it easier for them to balance their budget.  If people don’t agree to pay higher taxes, they say they will cut back on public safety by forcing reductions on the Sheriff and the County Prosecutor’s office.

County officials are quoted today in The Seattle Times saying that, “most noncritical spending has already been trimmed.”

That’s not true.  The County Executive has done little or nothing to control rising labor costs.  To cite just one department, wages for bus drivers have grown at twice the rate of inflation – rising 70% in just ten years.  Today some drivers make more than $100,000 a year; 243 drivers make more than $75,000 a year.

On top of that, the Executive makes taxpayers pay for 100% of employee health benefits, while in the private sector employers normally pay 75% to 85% of benefit costs:

“Under the Full Benefits Plan, you [county employees] receive county-paid medical, dental and vision coverage for yourself and the eligible dependents (spouse/domestic partner and children) you enroll.” http://www.kingcounty.gov/employees/benefits/HealthandInsurance.aspx

In 2009 County officials made the deficit worse by promising to pay the cost of all health benefits “without the burden of premium share,” that is, employees make zero contribution toward the cost of their health benefits:

“This agreement addresses those [budget] concerns by securing a strong set of benefits that promote quality care and better health without the burden of premium share.”http://www.kingcounty.gov/employees/benefits/2010Benefits.aspx

The County provides great benefits.  Employees receive 12 paid holidays, 12 paid sick days, free bus passes, free life insurance, increased dental coverage, and a cut, from $10 to $7, in the co-pay required for filling prescriptions.  The County has no problem filling open positions, indicating it pays well above market rates in salary and benefits.  Executive Constantine and council Democrats want to use existing revenues to provide above-market wages and gold-plated benefits, while threatening people with cuts in public safety unless we agree to a tax increase.

State budget brings cavalcade of tax hikes for businesses

May 24, 2010 in In the News
Kitsap Peninsula Business Journal
Source: 
Kitsap Peninsula Business Journal
Date: 
Monday, May 24, 2010