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.

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Think tank releases report on lawmakers' missed votes

April 14, 2010 in In the News
The Daily News (Longview)
The Daily News (Longview)
Wednesday, April 14, 2010

Deficit déjà vu

April 14, 2010 in Blog

At her press conference yesterday Governor Gregoire was asked about the projected deficit for the 2011-13 budget. The Governor said they don't know yet what impact the budget and taxes adopted by the Legislature this weekend will have on the next budget but that another deficit is likely. Here is her exchange with reporters on this topic:

The Governor also said that future tax increases for education spending are likely, though they will probably show up as a ballot measure for the voters to approve.

As for the Back to the Future budget deficit, in February the Office of Financial Management produced this 4-year budget outlook showing a projected $2.1 billion deficit in 2011-13 assuming the Governor's smaller spending and tax package:

Budget outlook

Since the Legislature's plan spends and taxes more than the Governor proposed, OFM may update the February 4-year budget outlook in the coming weeks to get a better feel for the pending 2011-13 deficit. 

It will be interesting to see what reforms or tax increases will be proposed to solve that problem. It's unfortunate the Legislature used a full 30-day special session to enact a budget but failed to adopt policies to make it sustainable.

Sen. Brown vs. Sen. Brown

April 13, 2010 in Blog

A lot of strange things can happen when working until 1 a.m. in the morning, including the instance of arguing with yourself.

Consider the following sides of the debate Sen. Brown found herself on last night concerning whether a tax increase is permanent or temporary.

First was her floor speech on HB 2561 arguing that an amendment to describe the sales tax on bottled water as being "permanent" was misleading since there is no such thing as a permanent tax.

Then later in the evening was her floor speech on SB 6143 arguing that the job credits being passed were "permanent" but the tax increases "temporary."

In the same evening Sen. Brown argued that a change in tax policy is "permanent" when it is a tax credit but "temporary" when a tax increase.

State Auditor writes letter supporting our work

April 13, 2010 in Blog

State Auditor Brian Sonntag has long been a friend of the Washington Policy Center and supporters of accountable, effective and transparent government.

It looks like the State Auditor is also a fan of our work. Here are details from a recent letter he sent:

"I'd like to take this opportunity to thank you for all your support of our audit work and for your efforts to make state government work better for the citizens it serves. The Center for Government Reform and the Office of State Auditor share common purposes to achieve greater government transparency and accountability . . .

In my opinion, the Center for Government Reform plays and important role, monitoring, analyzing and reporting actions of the Legislature and state government agencies. This is vital in light of the diminished ability by the news media to cover activities at the Capitol. Amid current economic conditions and state government's financial challenges, both o!
f our organizations have stood at the forefront in advocating significant reforms in the way government operates . . .

We appreciate that your work is nonpartisan, constructive and solution-oriented. Again, this complements our Office's independence and objectivity as a statewide elected Office that works for and reports directly to Washington citizens.

I look forward to maintaining our strong positive relationship as we continue to work on ideas and issues of mutual interest benefitting the public. Thanks again for your help and support of our responsibilities."

You can read the rest of the State Auditor's letter here.

State unemployment rate back up to 9.5%

April 13, 2010 in Blog

Though the state saw minuscule job growth during the month of March, the unemployment rate rose to 9.5%. The national rate is 9.7%. 

Year-over-year comparison (March 2009 - 2010) saw a decrease of almost 68,000 jobs. This shows a gradual leveling off of year-over-year loss -- although March 2009's unemployment rate was only 8.5%. The last few unemployment reports saw YoY decreases of 100,000+ jobs. 

From the report:

"Nonfarm payrolls declined by 67,800 jobs between March 2009 and 2010. In addition to being the job loss leader over the month, construction led all sectors in year-over-year declines, down 26,400 jobs. While most major industries sustained job losses year-over-year, three did add to payrolls: education and health services, retail tra!
de, and mining and logging."

It will be interesting to look back a year from now, after the 2009-11 supplemental budget tax increases are enacted to gauge its impact on job creation/loss. 

Do the words "permanent tax" confuse you?

April 13, 2010 in In the News
Seattle PostGlobe
Seattle PostGlobe
Tuesday, April 13, 2010

Do the words permanent tax confuse you?

April 12, 2010 in Blog

It appears some Senators may have a problem with truth in advertising. This evening the Senate is poised to adopt HB 2561 which makes the temporary sales tax increase on bottled water from SB 6143 permanent to pay for "green" building bonds. Never mind the fact the bill seeks to amend a law not yet enacted.

Another interesting tidbit is the objection to changing the proposed ballot title for the measure. Section 501 (3) reads:

Pursuant to RCW 29A.72.050(6), the statement of subject and concise description for the ballot title shall read: "The legislature has passed Engrossed House Bill No. 2561 (this act), concerning job creation through energy efficiency projects in school buildings. This bill would promote job creation by authorizing bonds to construct energy efficiency savings improvements to schools, including higher education buildings."

Senator Parlette offered an amendment to change that section to read: 

Pursuant to RCW 29A.72.050(6), the statement of subject and concise
description for the ballot title shall read: "The legislature has
passed Engrossed House Bill No. 2561 (this act), concerning job
creation through energy efficiency projects in school buildings. This bill authorizes bonds in excess of the Article VIII, section 1 constitutional debt limit to construct school energy efficiency improvements, and makes permanent the sales tax on bottled water."

The amendment failed by a vote of 16-30.

Those opposing this change worried that voters would be confused by the reference to debt in excess of the constitutional limit and describing the removal of the expiration date on the bottled water sales tax increase as being permanent. You see, Sen. Brown pointed out that calling the tax permanent would be misleading since the Legislature could repeal it at any time.

And as we already know, honoring the will of the voters isn't high on Olympia's priority list so such a repeal could actually happen, right?

If such a repeal were to happen, Section 401 of the bill would come to the rescue:

The legislature may provide additional means for raising moneys for the payment of the principal of and interest on the bonds authorized in section 201 of this act, and section 202 of this act may not be deemed to provide an exclusive method for the payment.

There you have it, if the voters approve this bond measure and the Legislature changes the permanent bottled water tax back to being temporary, the Legislature is authorized to raise a new tax to pay back the bonds. Of course, even if the sales tax on bottled water isn't repealed, the Legislature would still have the authority for additional new taxes per Section 401.

Idaho - Washington conflict continues over who is better for business

April 12, 2010 in Blog

Idaho Governor Butch Otter returned fire this weekend as he continues the war of words with Governor Gregoire over which state is more business friendly. In an op-ed he penned for the Seattle Times, Governor Otter says

"Business owners understand that having a state government working with you, rather than against you, makes all the difference. Just ask Areva, the French company that was looking for somewhere to build a multibillion-dollar uranium-enrichment plant in 2008. Idaho and Washington were in the running, and competition was fierce for the 700 construction jobs and 250 permanent career opportunities — not to mention many expected spinoff and support businesses.

In the end, it came down to attitude. Areva officials said after visiting Olympia, they "didn't feel welcome over there."

Otter's op-ed comes on the heels of Rogers Weed's piece defending Washington as 

"...Washington is fiscally sound. Washington earns high marks from all three major bond-rating agencies. Our unemployment-insurance fund and other key programs are solvent, while many other states have had to borrow extensively and will have to substantially raise rates to repay their loans in coming years. It all adds up to predictability for business."

To which Governor Otter replied,

"...Idaho has reduced state spending as revenues have declined, keeping our commitment to put individual citizens and family budgets ahead of government programs and live within the taxpayers' means.

Washington, on the other hand, has trimmed a little around the edges but mostly is attacking its enormous deficit by raising taxes on employers, and ultimately on consumers. Right now it appears Washington will impose hundreds of millions of dollars in business and occupation tax increases on service-related companies."

So, I find it interesting then that in the proposed supplemental budget released today, there is a line item for $3.2 million in funding for "associate development organizations" for 2010, another $3.2 million for 2011. 

What is an "associate development organization?" According to legislation passed in 2007 authorizing such entities, they are responsible for, among other things:

(b) Providing information
on state and local permitting processes, tax issues, and other essential
information for operating, expanding, or locating a business in Washington;

(c) Marketing
Washington and local areas as excellent locations to expand or relocate a
business and positioning Washington as a globally competitive place to grow
business, which may include developing and executing regional plans to attract
companies from out of state;

So, Idaho's Governor is cutting regulation and taxes while Washington increases them. But have no fear, policymakers are spending $6.4 million towards making Washington look more appealing to prospective businesses.