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

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.

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:

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
Projects

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.

Governor refuses to save DNR's executive plane

May 20, 2009 in Blog

Usually when environmentalists talk about flying and climate-change the discussion focuses on getting rid of executive aircraft, not saving them. When it comes to the state Department of Natural Resources (DNR) 8-passenger King Air, however, Lands Commissioner Peter Goldmark asked the Governor to save his airplane, in part due to climate-change.

First some background. In an effort to balance the budget the Legislature decided DNR “shall dispose of the King Air aircraft it currently owns. Disposal of the aircraft must occur no later than June 30, 2010.”

In response to this, Goldmark sent Governor Gregoire a letter on May 6 demanding that she veto this forced sale and save his plane. Goldmark’s letter reads in-part:

“This threatens the state’s ability to effectively fight!
wildfires and respond to natural disasters. It compromises our ability to save the state and its residents millions of dollars each year. This is the wrong direction for maintaining our emergency response infrastructure while climate change is causing increased frequency and severity of wildfires and major climatic events causing floods, landslides, and utility damage . . . Disposing of our aircraft in the face of more wildfires, and climate-change related storms is simply the opposite direction that the state should be headed with its emergency response infrastructure.”

This claim caught the attention of former DNR Communications Director and current Washington Policy Center Environmental Director Todd Myers.

“Two problems. First, the plane in question isn’t an air tanker. It is an executive aircraft that is not part of the ‘emergency-response infrastructure’ in any real sense,” said Myers. “Second, his claim about needing the plane to !
address an increasing number of ‘climate-change-related stor!
ms’ is contradicted by scientists.”

Myers points to this statement by University of Washington climatologist Cliff Mass:

 “As an environmental scientist, I am frustrated by the poor information distributed by public officials, the media and others regarding the current and predicted frequency of extreme weather events. It is time for the scientific community to set the record straight . . . How many times have you heard that severe windstorms and heavy rains will increase in the Northwest under global climate change? The truth is, there is no strong evidence for these claims and the whole matter is being actively researched. Some portions of the Northwest have had more rain and wind during the past decades, some less. And initial simulations of future Northwest climate do not suggest heavier rain events.”

>
“Those who want to use climate change to support particular policies often claim that we must ‘follow the science.’ When there is a conflict between their desired policy and the science, however, they are quick to distort the science or ignore it altogether,” concludes Myers.

It looks like Myers wasn’t the only one not persuaded by Goldmark’s arguments. The Governor refused to veto the sale of DNR’s plane when she signed the budget on May 19.

Governor restores performance audit funding

May 19, 2009 in Blog

With a stroke of her pen, Governor Gregoire today restored the $29 million raided by lawmakers from the State Auditor's dedicated performance audit account. We first raised the prospect of a veto on April 29 after legislators ignored State Auditor Sonntag's request to reduce the 73% reduction in available performance audit funds. On May 5, Sonntag formally requested a veto in this letter to the Governor.

Discussing her veto, the Governor said the State Auditor has agreed to keep $15 million of the fu!
nds in reserve to be transferred the next time the Legislature meets - this is the amount the Auditor had previously agreed to be reduced from the performance audit account.

At stake was whether or not the Auditor would be able to move forward with the comprehensive statewide performance review requested by the Governor while at the same time conducting robust performance audits of state and local governments to help identify opportunities for savings and reforms during this difficult economic time.

After the Governor issued her veto I asked the Auditor what this means for his performance audit work. This is what Sonntag told me: “We can now move ahead in our effort to help bring about real reform to state government programs, and at the same time honor our commitment to the citizens of the state who gave us performance audit responsibility.”

Illustrating the widespread public support for Sonntag's independent performance audit authority granted !
by the people in 2005, the state's newspaper editorial boa!
rds unanimously called on the Governor to veto the Legislature's raid of $29 million from the performance audit account. Here are those editorials:

Sound Transit's ridership is up and down

May 18, 2009 in Blog

In the world of transportation policy analysis, there is a lot of anticipation for the first quarter ridership reports on public transit.

Most agencies ended 2008 with large increases in transit use. The larger demand placed pressure on budgets and had policymakers calling for higher taxes to expand service. The larger demand also had some suggesting that society had fundamentally shifted behavior away from the personal automobile, which has federal officials calling for massive spending increases in traditional transit and high speed rail with the next reauthorization bill.

In her weekly email update, Joni Earl gave us a preview of Sound Transit's first quarter results:

Despite the shaky economy, ridership on our Sound Transit buses and trains was up the first three months of this year.

Through March, Sound Transit trains an!
d buses carried an average of about 55,500 every weekday, an increase of 10 percent from a year earlier.  The average weekday boardings for ST Express buses increased 10 percent, Sounder commuter trains 5 percent and Tacoma Link light rail 5 percent.

In the month of March alone, ridership was up 6 percent from the same month a year earlier.

When compared to the same quarter last year, ridership is higher, but what Sound Transit does not say is overall transit demand is down. Sound Transit ended 2008 with an average use of 57.7 thousand trips per day. During the first quarter of 2009, Joni Earl says the agency now serves about 55.5 thousand trips per day. Comparatively, that is nearly a 4 percent drop.

Given current fuel prices and high unemployment rates, transit demand should continue to fall throughout the rest of the year. Th!
is should relieve most of the pressure on transit budgets but !
I'm skeptical that policymakers will slow their call for higher taxes. The legislature just passed SB 5433, which gives transit agencies the ability to raise car tab's by $20 per vehicle, subject to voter approval. The same bill also gives King County the authority to raise property taxes by 7.5 cents per $1,000 of assessed value, without asking voters, to increase transit service.

Just like honey bees in a spring garden, these new taxes just might be too much sweetener for lawmakers to resist.

Legislative records exemption vote postponed again

May 12, 2009 in Blog

The Sunshine Committee's discussion on repealing the Legislature's exemption from the public records act is beginning to morph into the movie sequel of Groundhog Day.

After a very spirited discussion about the resolution pitting the lawmakers in attendance (Sen. Kline and Sen. Roach) against the other committee members, by a 4-3 vote the Sunshine Committee voted to table Chairman Carr's proposal (at his request) and move the final vote on this important issue to its July 15 meeting. Here is Carr's original resolution:

The Committee recommends that the legislature eliminate the Legislative exemption, which excludes from public scrutiny personal!
records of the legislature, including e-mails, correspondence, except when designated as a public record by a “official action of the Senate or House of Representatives.”  Every other legislative body in the state of Washington is fully subject to the public records act.  There is no principled reason why the state legislature should be exempt. 

This is not the first delay. The issue of the Legislature's exemption from public disclosure was first presented for consideration back in October 2007. At that time the Four Corners of the Legislature (Democrat and Republican Leadership) asked the Sunshine Committee to delay action until the Supreme Court could rule on whether a Legislative privilege exists in the state Constitution. Here is one of the briefs filed in that case by the Washington Coalition for Open Government and American Legislative Exc!
hange Council
.  

The Court, however,  did not rule on this issue leaving the law unclear. Then the Committee decided that no vote should occur until all four legislative members were present (Sen. Kline, Sen. Roach, Rep. Kessler, and Rep. Rodne). Unfortunately that prerequisite to date has not occurred. 

Chairman Carr's proposal was then added to the March 18, 2009 meeting but since none of the legislative members were in attendance the vote was postponed until today's meeting. Although Carr hoped to have a vote today, the agenda failed to note that a vote was scheduled, so he felt it best to postpone action once again so the agenda could explicitly show a vote would occur.

One of the more interesting exchanges today about the legislative exemption focused on the!
state's and Seattle's budget shortfall. Committee member Ramsey Ramerman said that although Seattle's deficit is $43 million, the city council is being forced to discuss the options in public. Ramerman noted, however, that when it came to the state's $9 billion budget shortfall conversations about the options happened behind closed doors.

As for his proposed resolution, Carr is exactly right when he said today, "Open Government is not easy but it is best.”

Hopefully this principle will prevail when the Sunshine Committee finally holds this long overdue vote.

I-960 in legislative crosshairs

May 8, 2009 in Blog

Initiative 960, The Taxpayer Protection Act, loomed large this session as some lawmakers proposed but ultimately failed to adopt any of their tax increase bills. Adopted by the voters in 2007, I-960 (among other things) re-affirmed state law requiring state tax increases be adopted with a two-thirds vote in the Legislature. This threshold proved too high a hurdle for proponents of tax increases to overcome. As a result at least one State Senator has already gone on the record signaling her intention to repeal the law.

TVW's Inside Olympia has the scoop in this video interview with Senator Jeanne Kohl-Welles (D-Seattle):