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

Hello? Congress, are you there?

June 5, 2008 in Blog

Yet another federal audit has been released begging our elected leaders to address the country's fiscal situation. The following is from acting Comptroller General Gene L. Dodaro's testimony before Congress today:

"The nation’s long-term fiscal challenge is a matter of utmost concern. The federal government faces large and growing structural deficits due primarily to rising health care costs and known demographic trends. There is a need to engage in a fundamental review of what the federal government does, how it does it, and how it is financed. Understanding and addressing the federal government’s financial condition and the nation’s long-term fiscal challenge are critical to maintain fiscal flexibility so that policymakers can respond to current and emerging social, economic, and security challenges.

While some progress has been made in recent years in addressing the federal government’s short-term fiscal condition, the nation has not made progress on its long-term fiscal challenge. However, even this short-term deficit is understated: It masks the fact that the federal government has been using the Social Security surplus to offset spending in the rest of government for many years. If the Social Security surplus is excluded, the on-budget deficit in fiscal year 2007 was more than double the size of the unified deficit . . .

At some point, action will need to be taken to change the nation’s fiscal course. The sooner appropriate actions are taken, the sooner the miracle of compounding will begin to work for the federal budget rather than against it. Conversely, the longer that action to deal with the nation’s long-term fiscal outlook is delayed, the greater the risk that the eventual changes will be disruptive and destabilizing and future generations will have to bear a greater burden of the cost. Simply put, the federal government is on an imprudent and unsustainable long-term fiscal path that is getting worse with the passage of time."

With Congress and the President demonstrating an ongoing lack of self-discipline on spending, is it time to revive efforts to adopt a constitutional balanced budget amendment

Obama/McCain propose improvements to federal transparency website

June 4, 2008 in Blog

On the same day the general election campaign for the presidency officially began, Sen. Barack Obama (D-IL) and Sen. John McCain (R-AZ) co-sponsored legislation to enhance the federal spending transparency website they previously teamed up to create in 2006.

Along with Sen. Tom Coburn (R-OK) and Tom Carper (D-DE), McCain and Obama introduced yesterday the Strengthening Transparency and Accountability in Federal Spending Act of 2008 (S.3077). According to Sen. Obama's press release:

This Act would expand information on to include:

  • A copy of each Federal contract in both PDF and searchable text format.
  • Details about competitive bidding, the range of technically acceptable bids or proposals, and the profit incentives offered for each contract.
  • The complete amount of money awarded, including any options to expand or extend under a contract.
  • An indication if the Federal award is the result of an earmark.
  • Information about government lease agreements and assignments in the same manner that information is reported for contracts, grants, and other assistance.
  • An assessment of the quality of work performed on Federal awards.
  • Information about Federal audit disputes and resolutions, terminations of Federal awards, suspensions and debarments, and administrative agreements involving Federal award recipients.
  • Information about any civil, criminal, or administrative actions taken against Federal award recipients, including for violations related to the workplace, environmental protection, fraud, securities, and consumer protections.
  • Information about Federal tax compliance by Federal award recipients.
  • Information about parent company ownership that will be made accessible, along with other data on USASpending.GOV, through application programming interfaces.
  • Links to publicly available Government reports.

The Act would improve data quality on through:

  • Improved searchability of data and use of unique award identifiers that prevent the release of sensitive personally identifiable information.
  • A simple method for the public to report errors and track the performance of agencies in confirming or correcting the records for which error reports have been filed.
  • Agency inspectors general review statistically representative samples of agency awards to verify accuracy and compliance with improved data standards.
  • General quality audit of website data every six months, including review and report of public error reporting system and recommendations for new quality standards and procedures.

On April 1, 2008, Governor Gregoire signed into law Washington's version of the 2006 federal reform, SB 6818. The new law is based on Washington Policy Center’s (WPC) recommendation for the state to adopt a searchable budget website. It passed the legislature unanimously.

Washington's new law already includes the requirement for performance information to be included on the searchable spending website. It's good to see this information may soon be available on the federal website.

Court strikes GA contracting rules

June 3, 2008 in Blog

On May 23, 2008, Thurston County Superior Court Judge Chris Wickham invalidated three rules the Department of General Administration (GA) adopted to implement the competitive contracting provisions of the 2002 Civil Service Reform. The Washington Federation of State Employees (WFSE) sued to have the rules thrown out. A copy of the ruling was made available by the Attorney General last night.

At issue are WAC 236-51-006, 236-51-010(11) and 236-51-225. The main issue of contention is on what it means to be a "displaced employee" due to an agency competitively contracting work.

I had an opportunity to talk with the Director of GA, Linda Bremer, after today's GMAP session to ask what the ruling means and what the next steps are. She said that at this time GA was reviewing its options and would make a decision in the next few weeks on whether to appeal or adopt new rules.

Even before the ruling, the use of competitive contracting by state agencies under the 2002 reform has been less than stellar. A performance audit conducted by the Joint Legislative Audit and Review Committee (JLARC) in January 2007 found:

“…few agencies have competitively contracted for services in the 16 months since receiving authorization to do so. Agency managers reported two main reasons for not competitively contracting. First, managers perceive the process itself to be complicated and confusing, providing a disincentive to pursue competitive contracting. Second, competitive contracting is a subject of collective bargaining, which creates additional challenges by requiring labor negotiations. Managers must bargain, at a minimum, the impacts of competitive contracting. Additionally, some agency collective bargaining agreements include provisions which proh!
ibit agencies from competitively contracting.”

Regardless of the ultimate outcome of the court ruling on the GA rules, Washington policymakers should simplify the bidding process to make it easier for agencies to use competition to improve services. Lawmakers should also shield contracting out from union and political influence by removing it from the collective bargaining process. Improving service to the public is too important to be a bargaining chip in government labor negotiations.

Special Evening Reception for Our Whatcom County Area Supporters

June 3, 2008 in Events
Tuesday, June 3rd, 2008
5:30 pm - 7:00 pm
Bellingham, WA

This special reception and wrap-up of the 2008 Legislative Session was for our supporters and those interested in learning more about our work.  The recently completed Session was discussed, with a focus on how it will affect you and your business.  WPC’s president and research center directors gave reviews of their work during Session, including publications on the state budget, taxes, health care, transportation, the environment and ways to improve the business climate.  They also presented the top issues to look for during the remainder of this busy election year and previ

DSHS audit findings

June 2, 2008 in Blog

The State Auditor's Office released an audit of the Department of Social and Health Services (DSHS) today with 4 findings issued against the agency.

The findings are:

  • DSHS does not have adequate controls to ensure all payments made through its Social Services Payment System are supported and approved. This resulted in "$88,230.42 in inappropriate payments to 115 clients and providers. The Department had identified 28 of these through its review process and our audit identified the remaining 87. The Department has begun recovery proceedings for 110 of the overpayments identified. The overpayments were a combination of state and federal dollars." - Repeat Finding
  • DSHS does not adequately monitor contracts with Crisis Residential Centers to ensure compliance with state law and contract requirements. DSHS "is not in compliance with state law or its own contract. By paying a provider who has allowed clients to stay beyond five days, the Department is not receiving the services – open available space for at-risk youth – agreed on in the contract. These facilities are designed to be short-term residences for emergency situations."
  • DSHS Children’s Administration, did not perform adequate monitoring for background checks of foster care providers. DSHS "licensed and paid foster care providers without evidence showing a required criminal background check was completed and cleared. The lack of background checks for all required individuals increases the chance of people with disqualifying criminal backgrounds having access to children served by the Department." - Repeat Finding
  • Public funds were misappropriated at the Department of Social and Health Service’s Division of Child Support. "On March 27, 2007, a client notified the Division that a payment, that had been made, was not posted to their child-support account. The client contacted their bank and found the payment was deposited into a personal bank account, not the Department account. The Department recognized the name on the personal bank account as a temporary employee and terminated the individual on March 27, 2007. The Department immediately filed a police report with the Olympia Police Department, which referred it to the Washington State Patrol. The Patrol conducted an investigation and interviewed the former employee on June 6, 2007. During the interview, the individual stated she misappropriated the payment. After further investigation, the Patrol concluded the former employee had misappropriated at least $25,571.58 in public funds between December 1, 2!
    006 and March 27, 2007. As a result of this loss, the Division has made improvements in its internal controls regarding processing of child-support payments."

It's never good to receive an audit finding but it looks like DSHS is making progress with just a handful of problems identified. That said, there should never be a repeat audit finding. Hopefully the Governor and Legislature will make sure DSHS doesn't repeat this year's violations in next year's audit. 

How Incentives to Cheat Undermine Cap‐and‐Trade

June 2, 2008 in Publications

Imagine buying a car only to find it was a lemon. You would probably go back to the seller in an effort to get your money back. Contract and consumer protection laws are set up to mediate this relationship between buyer and seller. In most cases the power of one balances the other creating fair transactions that are mutually beneficial.

Business & Occupation Tax Reform, Part I

June 2, 2008 in Publications

The Oxford American Dictionary defines “tax” as, “a sum of money to be paid by people or business firms to a government, to be used for public purposes.”

Today, taxes are used to pay for public goods such as schools, roads, airports, utilities, museums, social work, sports, and more.

Congress looks at increasing user fees

May 30, 2008 in Blog

With a worsening federal budget outlook leading the Congressional Budget Office to project the possibility of massive income tax increases, Congress asked the Government Accountability Office (GAO) to study how best to design user fees to fund federal programs. According to a GAO report issued yesterday:

"The federal government will need to make the most of its resources to meet the emerging challenges of the 21st century. As new priorities emerge, policymakers have demonstrated interest in user fees as a means of financing new and existing services. User fees can be designed to reduce the burden on taxpayers to finance the portions of activities that provide benefits to identifiable users above and beyond what is normally provided to the public. By charging the costs of those programs or activities to beneficiaries, user fees can !
also promote economic efficiency and equity. However, to achieve these goals, user fees must be well designed.

GAO was asked to study how user fee design characteristics may influence the effectiveness of user fees. Specifically, GAO examined how the four key design and implementation characteristics of user fees—how fees are set, collected, used, and reviewed—may affect the economic efficiency, equity, revenue adequacy, and administrative burden of cost-based fees. GAO reviewed economic and policy literature on federal and nonfederal user fees, including prior GAO work, and used relevant case examples to illustrate different types of design elements and the impacts they may have . . .

Total federal user fees are in the hundreds of billions of dollars annually and growing. According to Office of Management and Budget (OMB) data, total fee collections increased 69 percent from $138 billion in fiscal year 1999 to $233 billion in fiscal year 2007. Even after adjusting for inflation, fee collections grew 39 percent. During this time period, total user fee collections varied from 6.4 to 7.6 percent of total federal spending (gross outlays).

User fees can be designed to reduce the burden on taxpayers to finance the portions of activities that provide benefits to identifiable users above and beyond what is normally provided to the public. By charging the costs of programs or activities to identifiable beneficiaries, user fees can promote economic efficiency and equity just as prices for private goods and services can do in a free and competitive private market. However, to achieve these goals, user fees must be well designed."

To view the GAO findings and recommendations on federal user fees, click here.

White House on 2003 tax cuts expiring

May 28, 2008 in Blog

Marking the five year anniversary of the 2003 Bush tax cuts, the White House put out a "fact sheet" today warning "The Largest Tax Increase In History Is Looming." From the White House:

"By the end of last year, Americans would have paid an additional $1.3 trillion in taxes had it not been for the President's tax relief.  If the President's tax relief is allowed to expire at the end of 2010, Americans will pay about $280 billion more in taxes each year . . .

If the President's tax relief is allowed to expire, every income taxpayer will see an increase.  Taxes will increase for 116 million income taxpayers who will see their taxes go up by an average of $1,800.  It will force many families to accept a nearly 200 percent tax increase.  In addition:

  • 48 million married couples will face a $3,007 increase on average.  Part of the increase is due to the fact that many married couples will once again be forced to pay more taxes as a married couple than if each were treated as a single.
  • 12 million single women with dependents will face a tax increase averaging $1,091.
  • 18 million seniors will face a $2,181 average tax increase.
  • 27 million small business owners will face a $4,066 tax increase on average.

These pending tax increases will be devastating for average American families.  A typical family will pay $500 more per child in taxes, and 43 million families with children will face an average tax increase of $2,323.  American families are facing higher costs in the grocery line and at the gas pump.  Americans deserve to keep more of their income.  If Congress allows the President's tax relief to expire:

  • A single parent with two children earning $30,000 would see an increase of over $1,600 in taxes.
  • A family of four earning $40,000 would see an increase of over $2,300 in taxes.
  • A family of four earning $50,000 would see an increase of over $2,100 in taxes – an increase 191 percent
  • A family of four earning $60,000 would see a tax increase of approximately $1,901 in taxes – an increase of  70 percent.
  • A family of four earning $80,000 would see a tax increase of about $2,000 in taxes."

So will Congress allow the 2003 tax cuts to expire? What about the spending side of the equation? Until Congress makes up its mind taxpayers will be left wondering what fate awaits them.

$200 billion in fee and tax increases proposed in 2008

May 27, 2008 in Blog

The cost of government is going up this year. During the 2008 Legislative Session, lawmakers proposed over $200 billion in fee and tax increases. Of that, they imposed $768 million in increases over a ten-year period.

State senators proposed 46 bills (including companion bills) that would increase state taxes or fees. The initial versions of these proposals sought to raise $215.4 billion in revenue over a ten-year period. Of these proposals, the legislature adopted five, raising $13 million in fees or taxes.

State representatives proposed 36 bills (including companion bills) that initially sought to raise $98.8 billion in fees or taxes over a ten-year period. The legislature ultimately adopted nine of these bills, raising $755 million in fees or taxes. In total the legislature enacted 14 bills raising fees and taxes by $768 million over a ten-year period.

For a list of the tax and fee increases proposed and enacted in 2008, click here.