Can budget savings be found in changes to sick leave cash out?

With Washington facing a short term $2.6 billion budget deficit, all savings opportunities should be on the table. One possibility is to change the practice of allowing state employees to carry forward and cash out unused sick leave. According to the state's budget transparency website, Washington paid out $65.3 million in unused sick leave during the 2007-09 biennium. The state has already paid out $13 million since the 2009-11 budget started in July . . . READ MORE

Washington's annual financial report released

The Office of Financial Management has released the state's 2009 Comprehensive Annual Financial Report (CAFR). Some of the details of note: "Governmental activities resulted in a decrease in the state of Washington’s net assets of $2.2 billion. A number of factors contributed to the decrease: Tax revenues decreased $893 million in Fiscal Year 2009 as compared to Fiscal Year 2008. While certain tax sources showed moderate increases, sales and use taxes reported a decrease of $1.0 billion . . . READ MORE

States face at least $405 billion unfunded liability for retiree health benefits

While states attempt to deal with their short term budget problems, elected officials must not lose sight of the long term obligations being placed on taxpayers. Highlighting this fact is this report from the U.S. Government Accountability Office (GAO) on state and local government retirement health benefits (OPEB - Other Post Employment Benefits): "We found that the total reported unfunded liabilities for OPEB (which are primarily retiree health benefits) for state and select local governments exceed $530 billion. The $530 billion includes about $405 billion for states and about $129 billion for the 39 local governments we reviewed . . . READ MORE

Can stimulus strings be cut?

Faced with closing a projected $2.6 billion budget deficit, lawmakers have been told that 70% of their budget options are off limits meaning reductions need to occur in only 30% of spending. Here is how Governor Gregoire describes this dilemma: "Parts of our state’s budget, including basic education, debt service and pensions, are considered ‘protected’ because of constitutional mandates require these cost be paid. Other parts are considered protected, too, due to requirements imposed by the federal government when the state accepted funds under the American Recovery and Reinvestment Act, primarily in Medicaid and higher education." A recent federal audit conducted by the Government Accountability Office (GAO), however, noted that states may seek a waiver from the "stimulus strings" for Education State Fiscal Stabilization Funds.
According to GAO . . . READ MORE

State Auditor releases update on performance audit recommendations

State Auditor Brian Sonntag this morning issued a report highlighting the status of performance audit recommendations made to date. According to the report: "From February 2007 through June 30, 2009, performance audits identified nearly $3.6 billion in cost savings, unnecessary expenditures and economic benefits. Some recommendations have a financial impact, such as past costs that were questionable or avoidable, those with future cost savings and recommendations with future revenue opportunities. The figure below is focused on recommendations with future revenue opportunities or future cost savings that can be realized when the recommendations are implemented. We made 214 recommendations with future cost savings or revenue opportunities; 67 percent of those recommendations have been fully or partially implemented or are in progress, as shown below . . . READ MORE

State Auditor: "Opportunities for Washington"

The State Auditor's Office this morning released a report titled "Opportunities for Washington." In a letter to citizens State Auditor Brian Sonntag wrote (in-part): "I am pleased to present to you 'Opportunities for Washington,' our performance review of state government operations. For such a time as this, state government has an opportunity and a need to significantly change how it does business. As Governor Gregoire and the Legislature deal with the state's difficult financial challenges, this review reflects our first such effort to help. It contains ideas and recommendations to save money, to streamline government programs and functions and to provide better service to citizens. The review also identifies areas in which we can direct performance audits in the near future. Those audits are intended to identify actionable efficiencies . . . READ MORE

Newspapers comment on Governor’s budget proposal

Reactions to Governor Gregoire's proposed supplemental budget have been decidedly mixed. Beneficiaries of the programs identified for elimination have warned taxes should be raised instead of making the cuts. The majority of the state's newspaper editorial boards, however, warn that tax increases should be the last resort and state spending must be reformed first. Here are the editorials to date . . . READ MORE

Unemployment Insurance taxes to increase 54% in 2010

The Employment Security Department (ESD) today announced that Unemployment Insurance taxes for the state's employers are going up in 2010. In a release from ESD, Commissioner Karen Lee outlined the plan that will see the average total tax rate increase from 1.55 percent in 2009 to an estimated 2.38 percent in 2010 -- a 54% increase . . . READ MORE

How competitive contracting can help balance the budget

Washington lawmakers again face a multi-billion dollar budget deficit, meaning they will either increase the amount of money they collect from citizens each year, or re-evaluate the way they deliver core services to the public. Increasing taxes during a recession would add economic hardship, while changing the way services are delivered offers part of the solution to closing the deficit without raising taxes. One tool available for improving service delivery is Washington’s competitive contracting law, passed as part of civil service reform and signed by Governor Gary Locke in 2002. In practice, however, state managers rarely exercise their statutory contracting out authority, meaning an important provision of the 2002 civil service law remains largely unused . . . READ MORE

Governor's budget proposal results in $2.8 billion deficit for 2011-13

Governor Gregoire today released her proposal to close a projected $2.6 billion deficit in the current budget. While she is to be commended for starting the conversation on the type of changes needed to reset state spending, she failed to identify the changes necessary for a truly balanced and sustainable budget. The Governor acknowledged that the state is facing at a minimum a three-year problem. In fact, assuming her budget is adopted, a $2.8 billion deficit is projected for the 2011-13 biennium. Here is the 4 year budget outlook provided by the Office of Financial Management . . . READ MORE

Bill introduced to end state liquor monopoly

Senators Tim Sheldon (D-35) and Curtis King (R-14) have introduced a bill to end the state's archaic liquor monopoly. From SB 6204 - Privatizing the sale of liquor: "(1) The legislature intends for privatization of retail and distribution of liquor to result in a system that is more efficient than public sector retail and distribution. The legislature finds that the present system of state control includes a markup amount at distribution that generates revenue for the state and local governments, and that this markup will be eliminated when liquor sales and distribution are privatized. The legislature further intends that the privatization of liquor sales and distribution not result in revenue losses to state or local governments as compared to projected revenues assumed under state control, not including any separate licenses or franchises . . . READ MORE

Budget prologue

Governor Gregoire will release her proposed fix to the state's $2.6 billion budget deficit tomorrow at 9 a.m. As required by law, it should be balanced within existing revenue though the Governor has clearly stated she plans to release a tax increase proposal prior to session. The Everett Herald has posted a list prepared by the Department of Revenue of potential tax increases (click here for list). While everyone will be focusing on the short term $2.6 billion problem for the current budget, solutions debated this coming session must address the long term structural problem and what to do about replacing the billions in one-time fixes being used (such as the federal stimulus funds). If only the current deficit is addressed, elected officials will have this debate to look forward to again in 2011 . . . READ MORE

Reform state's competitive contracting law to realize budget savings

With the current budget crisis, lawmakers and the governor should take full advantage of every opportunity to promote the efficient delivery of routine state services, so tax money can be freed up to fund high-priority core functions of government. State elected leaders should fix weaknesses in the competitive contracting law, and direct agency managers to use competition to reduce the cost of operating state programs. Specifically, state leaders should simplify the operation of the 2002 competitive contracting law and, like other states, create a Government Competition Council to assist managers in identifying public services that could be improved through competitive contracting . . . READ MORE

Governor releases budget video

Governor Gregoire will be releasing her recommendations to close the state's projected $2.6 billion budget deficit the week of December 7. Giving some insight into her thought process, the Governor and the Director of the state's budget office (Victor Moore) have teamed up to create a short video about the budget situation. Here is a link to that video (Hat tip Niki Reading of TVW). While no new ground was broken in the video, it is disappointing that two words were never mentioned: Government Reform. This is in contrast to the Governor's message last session that government must change the way it operates versus trying to find new revenues to continue the status quo . . . READ MORE

Harvard economists: Cut taxes to increase growth

While elected officials at the state and federal level debate the need for tax increases and "fiscal stimulus spending," a recent economic study suggests instead taxes and spending should be cut to spur economic growth and reduce deficits. Here is the abstract from an October 2009 study by Harvard economists Alberto Alesina and Silvia Ardagna (Large changes in fiscal policy: taxes versus spending): "We examine the evidence on episodes of large stances in fiscal policy, both in cases of fiscal stimuli and in that of fiscal adjustments in OECD countries from 1970 to 2007. Fiscal stimuli based upon tax cuts are more likely to increase growth than those based upon spending increases. As for fiscal adjustments those based upon spending cuts and no tax increases are more likely to reduce deficits and debt over GDP ratios than those based upon tax increases. In addition, adjustments on the spending side rather than on the tax side are less likely to create recessions. We confirm these results with simple regression analysis . . . READ MORE

Executive branch needs unified voice on education priorities

With Washington already behind the eight ball in the quest for the federal "race to the top funds," the last thing we need is for the state's executive branch to be sending conflicting signals about our commitment to accountability. Unfortunately that is exactly what is happening. Yesterday State Superintendent of Public Instruction Randy Dorn announced his plan to delay the state's math and science graduation requirements. According to his press release . . . READ MORE

Budget deficit grows to $2.6 billion

Washington's budget outlook took another hit today with forecasted revenue dropping $760 million since the September revenue forecast. The result of this is a projected $2.6 billion deficit in the 2009-11 budget adopted earlier this year.  According to the press release issued by the state's economist, Dr. Arun Raha: "While growth has returned to the national and state economies, consumer confidence and more critically, consumer spending remain weak. As a result, we are experiencing a revenue-less recovery." Responding to the news the Governor said in a press release: "I will produce a budget balanced to this revenue projection because I am required to by law. We all know a budget reflects the values of our state. All options must be on the table to produce a budget that works." The Governor, however, has ruled out calling a special session of the Legislature . . . READ MORE

Governor to Commerce Director: "This is not acceptable"

Attendees at this morning's GMAP session were witness to a visibly disappointed Governor expressing her displeasure with an agency's lack of performance. The focus of the meeting was the state's use of the federal stimulus funds. One of the activities highlighted was Commerce's weatherization program. Commerce Director Rogers Weed opened his presentation by asking the Governor to lower the target for the number of housing units to be weatherized since it would be unlikely for Commerce to meet the current goal. Weed indicated the problem was caused by questions concerning prevailing wage requirements and how much workers should be paid for the weatherization projects. The original goal for the 2nd quarter was to weatherize 935 units. Commerce's actual production was 107 units. Responding to this the Governor said she was absolutely disappointed with how many fingers were being pointed and the bureaucracy getting clogged up . . . READ MORE

Governor willing to wait on budget fix

Governor Gregoire will not call a special session of the Legislature despite a budget deficit likely to exceed $2 billion after Thursday's state revenue forecast. Sen. Joe Zarelli (R-18), ranking member on the Senate Ways and Means Committee, has been calling for a special session for months. Zarelli issued this statement in a press release last week . . . READ MORE

State Supreme Court issues school funding decision

In a landmark ruling today, Washington’s Supreme Court ruled unanimously that the legislature’s method of funding public schools is constitutional under the “ample provision” requirement of the state constitution. The Court concluded: "The legislature’s use of the staff unit allocation system to fund education with differing salary allocations to school districts with historically disparate average salaries does not violate article IX, section 2, although there remains a slight gap between the highest and lowest salary funding statewide. There is no showing that the legislature’s funding allocations, including those for Federal Way School District, do not constitute 'ample provision for the education of all children' as required under article IX, section 1. The legislature has acted well within its constitutional authority and its duty to make ample provision for the education of children and to provide for a general and uniform system of education under article IX. The individual respondents’ claims do not meet requirements for justiciability and should be dismissed . . . READ MORE

Small Business Owners Offer Solutions to Improve Business Climate

Small business owners, legislators, and policymakers from all over Washington gathered in SeaTac yesterday to discuss the state’s business climate at Washington Policy Center’s 2009 Small Business Conference. During several interactive issue breakout sessions, business owners suggested and discussed solutions to improve the climate for small businesses in Washington. This was the fourth statewide small business conference hosted by WPC since 2003. The result is a list of priority solutions, selected by small business owners, for solving the major problems with the state's business climate.  The top recommendations from each breakout session are . . . READ MORE

OFM releases 2009 report on state boards and commissions

The Office of Financial Management (OFM) has published its 2009 Boards and Commissions Report. According to OFM: "The 2009 BOARDS AND COMMISSIONS REPORT provides basic information about boards, commissions, and committees in state government. State law requires the report to assist in promoting legislative and executive oversight of these organizations. This is the sixteenth biennial edition of the publication. The information in this report covers the period from July 1, 2007, through June 30, 2009. During the 2009 Legislative Session a number of boards were eliminated or consolidated by executive order or legislation. A list of those boards is attached and, if the board submitted a report for this period, a note is also included on that report . . .  In 2009, 449 boards, commissions, councils, committees, and similar groups in state government provided information for this report . . . READ MORE

Election week begins

For most voters across the nation today is Election Day. In Washington State, however, today marks the beginning of election week(s) and the possibility for some close races, election month. In most states mail-in ballots must either be received by Election Day or must be dropped off before the polls close. Washington, however, only requires that a ballot be postmarked by Election Day. This policy unnecessarily complicates the tabulation of votes and can leave the results of close races a mystery for weeks. With the state's ongoing move to close all poll locations, it is time to require all ballots be received on Election Day. This is exactly what Arizona, California, Colorado, Florida, Georgia, Hawaii, Idaho, Kansas, Maine, Montana, Nebraska, Nevada, New Jersey, New Mexico, Oklahoma, Oregon, South Dakota, Vermont, Wisconsin, and Wyoming require. North Carolina goes a step further requiring absentee ballots to be returned by 5 p.m. the day before the election. Secretary of State Sam Reed supports requiring mail in ballots to be turned in by Election Day . . . READ MORE

State Auditor's Office reviews its performance measures

The State Auditor's Office (SAO) acts as the eyes of citizens to help ensure state and local governments are operating in an accountable, transparent and effective manner. To help lead by example, staff at SAO met last week to focus on strategic planning and performance measures planning session for the agency. I had the opportunity to sit in on the sessions and was very impressed with the direction SAO is heading. Earlier this year the Office of Financial Management (OFM) issued an assessment of the performance measures SAO was using for its activities . . . READ MORE

Open Government Task Force Meeting Nov. 2

The Open Government Task Force created by State Auditor Brian Sonntag and Attorney General Rob McKenna will have its final meeting on November 2 to vote on recommendations to improve enforcement of the state's open government laws. Currently the only option available to citizens is to file a lawsuit if they disagree with an agency's opinion on whether a record should be disclosed. State Auditor Brian Sonntag noted at the October 5 Task Force meeting that there has to be a better way for citizens to access government records without having to resort to lawsuits. Attorney General Rob McKenna agreed highlighting the fact that every other area of law has an administrative mechanism for addressing concerns. The reason is administrative mechanisms are faster and more cost effective than relying solely on court relief. Unfortunately, Washington lacks this type of recourse for enforcement of the state’s open government laws. On the agenda for Monday's meeting . . . READ MORE

Commerce Director: "Government doesn't create jobs, businesses do"

The headline is a quote from the relatively new director for the Department of Commerce, Rogers Weed. He goes on to say, "About 80 percent of our state's economy comes from private sector activity, so we must have a strong, mutually beneficial relationship between government and the business community if we are to succeed in our mission to grow and improve jobs throughout the state." Since the Legislature changed the name and focus of the somewhat amorphous Department of Community, Trade and Economic Development to simply the Department of Commerce, the department has gone through a metamorphosis of sorts. The legislation passed earlier this year not only changed the name of the department but directed the new staff to deliver a plan to better serve the needs of businesses and narrow its focus on economic development. The department is preparing to release its formal plan next week . . . READ MORE

Agencies asked to determine which programs are mandatory

The Spokesman Review this morning highlighted an October 15 memo from the Office of Financial Management to state agencies asking agencies to identify which of their activities are mandatory. As reported by the Spokesman Review: Washington state agencies have been ordered to compile a list of their tasks – and whether they’re required by federal law or the state constitution – in preparation for budget cuts next year. An Oct. 15 memo from the state Office of Financial Management, the governor’s budget agency, tells all agency directors to describe the work their agency does, the number of employees the work takes and the amount it costs the state’s general fund . . . READ MORE

52% opted to donate to state parks in September

Earlier this month the Washington State Parks and Recreation Commission announced motorists had contributed $1.4 million to state parks by opting to donate $5 on their vehicle license renewals. As explained by State Parks: "In the new donation program, vehicle owners’ license tab renewal notices have an automatic $5 donation added to the total due. Those who do not wish to make the donation simply subtract it from the total due, as outlined on state Department of Licensing renewal notices and payment coupons. The Legislature projected that State Parks would need $28 million in donations over the two-year budget period starting July 1, to make its budget and keep state parks open. The program started with September renewals, leaving only 22 collection months instead of 24. Because of this, the agency needs to collect an average of $1.25 million each month over two years to meet its budget. The September 30 total includes donations that were made in July and August – from people who paid their September renewals early and from some who made donations under the preceding donation program." Thanks to the number crunchers at the Department of Licensing we now can see the raw numbers of those contributing through their vehicle renewals to state parks (link shows County numbers by month) . . . READ MORE

DOR publishes report comparing Washington's state and local tax ranking

The Department of Revenue (DOR) today published an updated comparison of state and local tax rankings. According to DOR's press release: Washington ranks 26th highest nationally in state and local taxes as a percentage of personal income, and 32nd highest in property taxes, according to newly released federal data covering Fiscal Year 2007. Washingtonians paid $109.25 in state and local taxes per $1,000 of personal income, compared to a national average of $113.32. Of that, $29.25 went to property taxes, compared to a national average of $34.04. Washington ranked 15th in state and local taxes per capita at $4,269, $35 more than the national average of $4,234. Washington ranked 27th per capita in property taxes at $1,143, $129 less than the national average of $1,272 . . . READ MORE

State Auditor reviews Commerce's fee use

The Joint Legislative Audit and Review Committee (JLARC) held a public hearing this morning to discuss the State Auditor's performance audit of the Department of Commerce's use of fees. The performance audit found: Commerce does not follow best practices to identify programs that could charge fees, which could provide the state with additional revenue; Some user fees are not established in accordance with state law and others are not accounted for or used in accordance with state law; Commerce could reduce general fund spending by between $2.2 million and $2.4 million or more over five years if fees were charged for four programs. Among the audit recommendations was the need for Commerce to use best practices identified by the U.S. Government Accountability Office to determine which government activities should be funded with user fees . . . READ MORE

GAO: Nation's long-term fiscal outlook remains unsustainable

The U.S. Government Accountability Office today released its Fall update on The Federal Government's Long-Term Fiscal Outlook. The prognosis is grim unless our elected officials in D.C. take action soon. From the report: Weaknesses in the economy and financial markets—and the government’s response to them—have contributed to near-term increases in federal deficits, which reached a record level in fiscal year 2009. While a lot of attention has been given to the recent fiscal deterioration, the federal government faces even larger fiscal challenges that will persist long after the return of financial stability and economic growth. GAO’s simulations continue to show escalating levels of debt that illustrate that the long-term fiscal outlook remains unsustainable. In little over 10 years, debt held by the public as a percent of GDP under our Alternative simulation is projected to exceed the historical high reached in the aftermath of World War II and grow at a steady rate thereafter . . . READ MORE

9th Circuit Court of Appeals orders release of R-71 petitions

The Ninth Circuit Federal Appeals Court has ruled for Secretary of State Sam Reed in the dispute whether or not to release the R-71 petitions in response to a public records request. Here is the Court's order:  The court, after consideration of the record and briefs of the parties, and oral argument, has determined that the district court’s Order Granting Plaintiffs’ Motion for Preliminary Injunction (the “Preliminary Injunction Order”), filed September 10, 2009, relies on an incorrect legal standard and, therefore, must be reversed . . . READ MORE

Supreme Court rules judiciary not subject to public records act

In a 7-2 ruling this morning (includes one concurring opinion), the state Supreme Court declared that judicial records are not subject to disclosure under the public records act. Writing for the majority, Justice Susan Owens said: "This court previously held that the PRA does not apply to the judiciary and the legislature acquiesced to that decision by not modifying the PRA. We see no reason to violate the doctrine of stare decisis here. The trial court correctly held that the PRA does not require the City to release the judicial records requested by Koenig, and we affirm." Chief Justice Gerry Alexander and Justice Debra Stephens dissented saying . . . READ MORE

Sunshine Committee recommends sunset review for new records exemptions

The state Sunshine Committee this morning unanimously adopted a recommendation that any new exemptions from public disclosure undergo a sunset review. Here is the recommendation as adopted by the Committee: "The Committee makes the following recommendations for new legislation: 1. The Legislature incorporate all existing and further exemptions into the Public Records Act by express reference. 2. The Legislature limit all future exemptions to a term of five years and be that such exemptions be examined by JLARC (Joint Legislative Audit Review Committee), the Sunshine Committee, or other competent body, a year prior to their expiration on a case by case basis to determine if they merit reauthorization or should be eliminated or revised." The recommendation adopted was an amended version of this proposal first introduced on May 12 . . . READ MORE

Treasurer worries about state's credit rating

Earlier this year State Treasurer James McIntire highlighted the state's strong credit ratings. Now, however, he is worried the state may have to pay millions more to borrow money. According to the Seattle PI: "Tim Eyman's initiative that would limit government spending could hurt Washington's credit rating, which would cost the state tens of millions of dollars, state Treasurer James McIntire says . . . McIntire said credit ratings consider numerous factors, including initiatives like Eyman's." Credit raters like Moody's say "Voter initiative activity adds element of fiscal uncertainty,” and is a challenge for the state, but the adoption of a tax or spending restriction did not make Moody's list of things that would reduce the state's credit rating. Perhaps the reason adoption of a tax or spending restriction didn't make the list is the fact Washington already has both. In fact, the state's credit rating didn't drop after passage of I-601 (tax and spending restriction) in 1993 or I-960 (tax restriction) in 2007 . . . READ MORE

State Auditor & Attorney General: We need a better way to enforce open government laws

The Open Government Task Force created by State Auditor Brian Sonntag and Attorney General Rob McKenna met this morning to discuss alternative ways to enforce the state's open government laws. Currently the only option available to citizens is to file a lawsuit if they disagree with an agency's opinion on whether a record should be disclosed. Opening the meeting State Auditor Brian Sonntag noted there has to be a better way for citizens to access government records without having to resort to lawsuits. Attorney General Rob McKenna agreed highlighting the fact that every other area of law has an administrative mechanism for addressing concerns. The reason is administrative mechanisms are faster and more cost effective than relying solely on court relief. Unfortunately, Washington lacks this type of recourse for enforcement of the state’s open government laws . . . READ MORE

Governor wants agencies to focus on core missions

The House State Government committee held a work session today focused on how to improve agency efficiency. Rep. Sam Hunt, Chair of the committee, opened the meeting by asking, "What do we do to make government more efficient?" One of the solutions provided by the Governor's Office is for agencies to spend more time on their core missions versus "back office" activities. Here is the info from one of the Governor's handouts. Also discussed was the joint effort between the State Auditor and the Governor to review ways to improve agency efficiency. Here are additional details on the State Auditor's effort and the Governor's reform goals. 

DOR: Three Million State Residents May Have Unclaimed Property

In need of extra cash? The state is holding $700 million in unclaimed property - some of which may be yours. According to the Department of Revenue: "Three million current or former Washington residents have a stake in $700 million in unclaimed property being held by the Washington State Department of Revenue. You may be one of them . . . Unclaimed property includes items such as uncashed paychecks, rent and utility deposits, refunds, escrow funds, dormant bank accounts, stocks and bonds and even the contents of safe deposit boxes . . . Revenue Director Cindi Holmstrom said the odds of someone finding unclaimed property have grown steadily over the years, are now literally 50-50, as the Department continues its efforts to educate businesses on the legal requirements to turn over unclaimed property." Click here to see if the state is holding your unclaimed property.

Open Government Task Force Meeting October 5

The Open Government Task Force created by State Auditor Brian Sonntag and Attorney General Rob McKenna will hold the first of two meetings on October 5. According to the Task Force's website: "The purpose of the Open Government Task Force is to study and make recommendations on the creation of an administrative board to rule on complaints of violations regarding the Public Records Act (PRA) and the Open Public Meetings Act (OPMA)." Here is the agenda and handouts for Monday's meeting. The meeting is open to the public and will be held from 9 am to 1 pm in the Senate Rules Room.

Ways & Means budget handouts

The House and Senate Ways and Means committees met today to discuss the state budget. Among the many interesting presentations was the Senate update on the state budget outlook and the House comparison of state budget processes. Here are some of the details of note . . . READ MORE

No minimum wage increase in 2010 for Washington

The state's Department of Labor and Industries announced yesterday that there will be no minimum wage increase for 2010. The minimum wage for workers in this state will remain at $8.55 per hour. This is the first time since Initiative 688, the initiative that coupled the minimum wage to the Consumer Price Index passed in 1998, that the wage has remained static. For several years, Washington had the highest minimum wage in the nation, this move may knock us down a spot or two . . . READ MORE

Colorado economics professor defends I-1033

With the Initiative 1033 debate focusing on the impact of a similar law in Colorado, the Taxpayer Bill of Rights (TABOR), one of TABOR's biggest supporters is coming to the defense of I-1033. Dr. Barry Poulson, Professor of Economics at the University of Colorado at Boulder, wrote an article for the Bellingham Herald this week countering the attacks opponents of I-1033 have made against TABOR. According to Dr. Poulson: Opponents of Washington's Initiative 1033 are woefully uninformed about the Colorado's Taxpayer's Bill of Rights (TABOR) passed by voters in 1992. Critics of Washington's ballot measure say I-1033 is similar to our TABOR, which they claim is a disaster for our state. Nothing could be further from the truth  . . . READ MORE

Federal transparency bill moves step closer to floor vote

Earlier this year Washington Congressman Brian Baird (D) introduced a resolution calling for a 72-hour review period on legislation before a vote could be taken. Baird's House Resolution 554 is co-sponsored by Rep. John Culberson of Texas (R). Since House leadership has not scheduled the bill for a vote, Baird has joined with other Representatives to try to force floor action on the transparency proposal. According to The Hill: "Democratic Rep. Brian Baird (Wash) has signed on to a discharge petition intended to force a floor vote on transparency legislation backed by Republicans. If the petition wins 218 signatures, it would pave the way for a vote on legislation that would change House rules to require that bills are posted online for 72 hours before the House votes on them. It is rare for a lawmaker to sign on to a discharge petition intended to force the leaders of his party to hold a floor vote. It is also considered to be a slap in the face of leaders . . . READ MORE 

Workers' compensation premiums increase 7.6%

The Department of Labor and Industries has increased state workers' compensation premiums for 2010 an average of 7.6%, the largest increase since 2004. Preliminary rate increase speculation from the Department earlier this summer hinted towards a possible 15-20% rate increase. State law requires employers to carry industrial insurance and only a small portion of the state’s thousands of employers are allowed to self-insure. All others are required to use the state’s system. Currently the state program covers over 2.5 million workers and over 170,000 employers and collects over $1.6 billion in annual premiums. The dollar figure associated with the increase is approximately $117 million to both businesses and employees (since employees also pay into the system) . . . READ MORE

DOR releases annual property tax report

The Department of Revenue (DOR) today released its annual property tax report. DOR's "Property Tax Statistics 2009" provides details on property tax collections, assessments, legislation, history of significant changes and tax levies. According to DOR's press release: Property tax revenue increased 5.4 percent to $8.6 billion in 2009, with nearly 70 percent of the increase stemming from new construction added to the tax rolls and higher voter-approved levies, the Washington State Department of Revenue reported today. About 1.6 percent -- $128 million of the $439 million in additional taxes over 2008 -- was due to regular tax increases on existing properties. The rest resulted from taxes on new construction and voter-approved tax increases for schools and other taxing districts . . . READ MORE

Governor calls for spending cuts in response to revenue forecast

Washington's budget outlook worsened by an additional $238 million today according to the state's Economic and Revenue Forecast Council. In response to this news, Governor Gregoire said in a press release: “Although we believe the recession has bottomed out, it will take some time for revenues to recover. I am preparing a supplemental budget request that accounts for the revenue shortfall we have experience since May . . . The budget I signed in May was built on tough decisions that I made together with the Legislature. The shortfalls in the last two forecasts necessitate more spending cuts, as do the lawsuits that have restricted our ability to implement reductions.” The focus on spending reductions versus tax increases is commendable. Earlier this year when the Legislature was considering tax increases, state and national economists warned that such action would further damage Washington’s economy and hamper economic recovery . . . READ MORE

WPC review of Initiative 1033

In November the people of Washington will vote on Initiative 1033. The measure is sponsored by Tim Eyman and would create a new revenue limit for the state, counties and cities with the goal of annually reducing property taxes. Eyman calls Initiative 1033 the “Lower Property Tax Act of 2009.” Initiative 1033 is the latest in a series of initiatives considered by voters which seek to control the growth of state government, though it is the first to include local governments under its requirements, and it is the first to focus primarily on providing ongoing tax rebates to property owners. According to the state’s Office of Financial Management, passage of Initiative 1033 would result in approximately $5.9 billion in state property tax rebates and $2.8 billion in local property tax rebates going to citizens by 2015. At the same time state and local revenue available for spending increases would grow each year by an amount based on population growth plus inflation. Eyman argues that Initiative 1033 attempts to close loopholes created by the legislature to an earlier voter approved initiative, Initiative 601. Enacted by voters in 1993, Initiative 601 sought to improve on the shortcomings of Initiative 62 adopted in 1979. Here is WPC's brief review of the previous state revenue and spending limits, a similar law in Colorado, and of Initiative 1033: Citizens’ Guide to Initiative 1033

Governor looks to streamline natural resource agencies

Governor Gregoire's Natural Resource Subcabinet has released more than twenty “ideas” that they hope will provide “a starting point for further discussion” as they seek ways to consolidate services, improve efficiency and reduce costs within the state's natural resource agencies. Additional information and analysis of the “ideas” presented by the Natural resource Subcabinet can be found here: Ideas to Improve Management of Washington’s Natural Resources. The Subcabinet is also looking for feedback from citizens. To provide feedback on the Subcabinet’s ideas, as well as provide your own ideas, you can use the Electronic Feedback Survey or send an email to resource.reform@ofm.wa.gov. Comments will be accepted until October 28, 2009.

Appeals Court rules against GA contracting rules

The state Appeals Court Division II ruled this morning to invalidate three of the Department of General Administration's (GA) rules for implementing the competitive contracting provisions of the 2002 Civil Service Reform. The ruling affirms a May 23, 2008, decision by Thurston County Superior Court Judge Chris Wickham. The Washington Federation of State Employees (WFSE) sued to have the rules thrown out. At issue are WAC 236-51-006, 236-51-010(11) and 236-51-225. The controversy focuses on what it means to be a "displaced employee" due to an agency competitively contracting work. The state noted in its legal brief . . . READ MORE

Protestors target government spending priorities

Protests were held across the country this past Saturday by citizens frustrated with the spending decisions being made in Washington D.C. Among the local protests were rallies at the state capitol in Olympia and in Yakima. Here are some photos of the Olympia rally. When asked by The Yakima Herald why he was at the Yakima rally, sixty-nine year old Jack Weston replied: “Bank bailouts should never have happened. Taking over the car companies should never have happened,” he said. He ultimately came away encouraged. “I’m doing a small part in protecting this county.” The largest of the spending protest occurred in Washington D.C. with an estimated tens of thousands converging on the Capitol. The New York Times reports the number of protesters took authorities by surprise . . . READ MORE

Judge rules for OFM in dispute with Eyman

Thurston County Superior Court Judge Richard Hicks has rejected Tim Eyman's legal challenge of I-1033's fiscal impact statement prepared by the Office of Financial Management (OFM). This means OFM's I-1033 analysis will be included without alteration in the voters' pamphlet. According to OFM, passage of Initiative 1033 would result in approximately $5.9 billion in state property tax rebates and $2.8 billion in local property tax rebates going to citizens by 2015. At the same time state and local revenue available for spending increases would grow each year by an amount based on population growth plus inflation. These tables (click link) show the year-by-year revenue growth, I-1033 fiscal growth factor and forecasted property tax rebates projected by OFM. Yesterday the Washington Research Council released its analysis of I-1033. Here is the Council's conclusion . . . READ MORE

OFM responds to Eyman's I-1033 fiscal note challenge

Earlier this week I mentioned Tim Eyman's lawsuit against the Office of Financial Management (OFM) to change the details in the fiscal note the agency created for the voters' pamphlet for Initiative 1033. Here is a copy of OFM's response to Eyman's lawsuit. Of note from OFM's brief . . . READ MORE

Eyman sues OFM over I-1033 fiscal note

As reported by The Olympian, Tim Eyman is suing the Office of Financial Management (OFM) to change the details in the fiscal note the agency created for the voters' pamphlet for Initiative 1033. I-1033 would create a new revenue limit for the state and several local governments with the goal of annually reducing property taxes. As required by law, OFM conducted the fiscal impact statement on I-1033. According to Eyman's lawsuit . . . READ MORE

Indiana Governor warns colleagues on spending

Indiana Governor Mitch Daniels wrote a must read opinion editorial for the Wall Street Journal on the new realities of budgeting for states. Daniels notes: "Most governors I've talked to are so busy bailing that they haven't checked the long-range forecast. What the radar tells me is that we ain't seen nothin' yet. What we are being hit by isn't a tropical storm that will come and go, with sunshine soon to follow. It's much more likely that we're facing a near permanent reduction in state tax revenues that will require us to reduce the size and scope of our state governments. And the time to prepare for this new reality is already at hand. The coming state government reset will be particularly wrenching after the happy binge that preceded this recession. During the last decade, states increased their spending by an average of 6% per year, gusting to 8% during 2007-08. Much of the government institutions built up in those years will now have to be dismantled" . . . READ MORE

Senator challenges press on public records exemption

Yesterday the state Sunshine Committee voted 8-1 to recommend the Legislature repeal its exemption to the public records act for legislative records. State legislators are currently the only officials in the state with this exemption. The lone no vote was Sen. Adam Kline, Chair of the Senate Judiciary Committee. Reporting on the vote Crosscut notes: In this state, the 2007 Legislature passed a law that shields journalists from having to reveal their sources in court. Kline was prime sponsor of that shield-law Senate bill. Representative Lynn Kessler, another Sunshine Committee member, was prime sponsor of the identical House version, which became law . . . READ MORE

Sunshine Committee votes to repeal legislative records exemption

At long last the state Sunshine Committee voted to repeal the Legislature's exemption from the public records act. Committee Chair Tom Carr originally proposed the resolution on March 18. By a 8 to 1 vote: 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 . . . READ MORE

Did TABOR destroy Colorado?

This November Washingtonians will vote on Initiative 1033. The measure is sponsored by Tim Eyman and would create a new revenue limit for the state and several local governments with the goal of annually reducing property taxes. Due to the similarities between I-1033 and Colorado’s Taxpayer Bill of Rights (TABOR), opponents of I-1033 have sought to compare the impact of TABOR in Colorado to what voters can expect to happen in Washington if I-1033 is enacted. Without debating the details of I-1033, it is worth considering the claims about TABOR's impact in Colorado . . . READ MORE

Open Government Task Force Members

State Auditor Brian Sonntag announced yesterday he is creating an Open Government Task Force with Attorney General Rob McKenna. The purpose of the new Task Force is to study and make recommendations on the creation of an administrative board to rule on complaints of violations regarding the state's open government laws. The Task Force meetings are scheduled for October 5, 2009 and November 2, 2009 from 9 a.m. to 1 p.m. at the Attorney General's Office in Olympia. Here is a list of the Task Force members . . . READ MORE

State Auditor critical of school bond practices

Liv Finne has a post on the WPC blog about the State Auditor's latest performance audit. Here is an excerpt: "On August 24, 2009, the state auditor issued its performance audit report examining school district practices for selling bonds to finance school building and other projects. The audit found that: 'Had school districts been following best practices on bond issues published by the Government Finance Officers Association, they would have saved $44 million to $79 million between 2003 and 2007.' The auditor recommends that the Superintendent of Public Instruction would be in the best position to facilitate guidance and training related to bond issues by bringing together school districts, educational service districts and staff from the Office of the Treasurer to improve guidance and develop training. Perhaps a better idea would be to centralize this function in the Treasurer's office" . . . READ MORE

PDC holds work session on enforcing open government laws

An all-star panel participated in a Public Disclosure Commission (PDC) work session today discussing how the public records and open meetings acts should be enforced. The focus of the work session was HB 1784 introduced during the 2009 Legislative Session by Representatives Liias, Chase, Hasegawa, Appleton and Ormsby. The bill received a hearing but was not voted on. PDC staff highlighted similar open government enforcement efforts in Connecticut, New Jersey, and New York. The discussion centered around common themes. From the citizen advocates: It is too hard for requestors to take on governmental entities in an open government dispute. From the government lawyers: There need to be more costs/restrictions on citizens to avoid abuse of the laws and burdening governmental entities . . . READ MORE

JLARC releases annual report

The Joint Legislative Audit and Review Committee (JLARC) issued its annual report today. According to JLARC: "Between 2001 and 2008, JLARC issued over 200 recommendations directly to state agencies. Some 83% of these recommendations have been implemented to date and another 11% are in progress . . . The amount of benefits JLARC produces each year that are either financial or non-financial depends on the assignments it receives from the Legislature. JLARC has historically achieved significant financial savings from its recommendations. The savings impact from 1990 to 2008 is $494 million in one-time savings and $91 million in annual ongoing savings. In recent years, assignments from the Legislature have focused more on non-financial objectives." Additional details here: Legislative Auditor’s Annual Report

Legislative records exemption on the clock

The state Sunshine Committee may finally take action at its meeting next Monday on the issue of legislative records and the public records act. Here is the draft agenda. Additional information here: Legislative records exemption vote postponed again