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On the last day of 2006, the Olympian's Brad Shannon reports on what to expect from the blue ribbon commission on health care. It sounds like it will be more modest than many expected. That's probably a good thing. Sweeping changes in complex systems invite complications that can undo the best of intentions.
In his weekly column, AWB president Don Brunell calls on state lawmakers to trim the budget proposed earlier this month by Gov. Chris Gregoire. He recalls the consequences of an earlier decision to spend down the state surplus.
... legislators would be wise to heed the warnings of their own budget office and trim the governor’s request.
Governor Dixy Lee Ray dealt with a similar revenue windfall in 1978 when the state had nearly a half billion in surplus revenues. Ignoring advice to hold onto most of it for a rainy day, she used half of the surplus to jumpstart an expensive education finance reform in 1979.
When the state economy hit the skids in the early 1980s, Gov. John Spellman and his fellow Republicans who took control of the legislature in 1980 were forced into several special legislative sessions to raise taxes and chop state spending. Remember, unlike the federal government, Washington is required to have a balanced budget.
Projections of a foreseeable budget deficit don't have to become reality.
Lawmakers can avoid the coming train wreck if they do two things: Control spending and maintain an adequate budget reserve.
Read the whole column here.
The Senate Ways & Means Committee released its analysis of the governor's budget shortly before Christmas. The Committee's overview provides a concise legislative perspective on the budget.
The legislature adjourned after the 2006 session with $228 million in the general fund ending balance. Additionally, the legislature set aside $825 million in three specific accounts: $350 million in the pension stabilization account, $200 million in the Heath Services account, and $275 million in the student achievement account. $75 million was spent during the 2005-07 biennium leaving $750 million for this budget.
There have been three official revenue forecast adjustments since the 2006 session that have added a total of $923 million dollars to the ending balance. Therefore, Governor Gregoire had approximately $1.9 billion in these various reserve accounts
when she began to build her 2007-09 budget.The Governor’s budget includes approximately $1 billion for compensation (including $381 million for the I-732 COLAs), as well $294 million in K-12/Early Learning investments and $241 million for vendor rate increases.
The most significant budget savings, $106 million, comes from the proposal to repeal gain sharing after the projected 2008 distribution.
The Governor’s budget proposes leaving a total $606 million in reserve: $289 million in the ending balance, an additional $55 million from the alternative judicial budget savings, and $262 million in the new budget stabilization account ... The money set aside in the three accounts last year has been spent and is no longer available.
It's a clear rundown on new spending, including a nice chart (on page four)
showing how much of the new spending is policy-driven (that's discretionary) and how much is maintenance level (arguably discretionary also, but less so - it's the cost of continuing current activities).
In this morning's Seattle P-I, Chris McGann profiles House Speaker Frank Chopp. It's a good piece. I wouldn't bet on state aid for the Sonics or a tunnel replacement for the Alaskan Way viaduct.
The Spokesman-Review reports that the state has reached an agreement with the Spokane Tribe that will allow the tribe to operate a casino on trust land off the reservation.
Some like it:
"This proposed compact promises to benefit not only our tribe but the entire region as well, creating needed jobs and boosting the local economy," said Richard Sherwood, the tribe's chairman. ...
"The economic survival of the tribe is at stake here," said Scott Crowell, the Spokane Tribe's gaming attorney. "We need to provide significant services to tribal members. We are desperately underfunded."
Others don't:
Spokane County Commissioner Todd Mielke said the plan to locate the casino off the reservation "sets an incredible precedent." ...
I think that generally the community has expressed some concerns about expanding gaming," he said. "It certainly does have some impact on the surrounding community."
And this should cause some concern:
Sen. Margarita Prentice, D-Seattle, a member of the State Gambling Commission, told the Seattle Times that the Spokanes' proposal was "really offensive."
"I can't imagine how we can possibly approve this," Prentice said.
The News Tribune headlines AP coverage of the deal, highlighting its statewide implications.
The proposed compact calls for the Spokane Tribe to have greater freedom in offering games than other tribes in the state, and that will likely prompt some of those tribes to seek the same deal.
Under the agreement, the tribe can operate up to five casinos, with a total of 4,700 video gambling machines. ... But the Spokanes can offer much higher stakes at some tables, and would be allowed to operate video gambling machines that will accept coins or currency, rather than paper tickets.
Such machines are currently banned in Washington. ...
Because the state’s compacts with other tribes guarantee that any advantages negotiated by one tribe cannot be denied others, it seems obvious that others would petition for whatever changes the Spokanes come up with.
Virtually every other incremental expansion of tribal gaming in Washington has worked that way ...
Sen. Prentice is again quoted:
“I don’t see any reason for them to leapfrog over the other tribes,” Prentice said, adding other tribes would certainly pursue the changes.
She also predicted the Spokanes will not win federal permission to place a casino in Airway Heights, a Spokane suburb.
Details, including the compact, are on the Gambling Commission's web site. Here's what they say is next:
1. Formal notification about the proposed Compact to the Governor, Legislature, and Local Government Officials, and others
2. Public hearing within 30 days after the legislature receives the proposed Compact
3. Gambling Commission Public Hearing on February 8, 2007, to decide whether to forward the proposed Compact to the Governor
4. The Spokane Tribal Chairman’s final consideration and signature
5. The Governor’s final consideration and signature
6. Secretary of the United States Department of Interior consideration, signature, and
publicationAt the End of the Process
Provided all parties approve the Compact, the Tribe will convert its gaming operations to comply with the Compact.
This seems to be far from over.
Ever since I can remember, I've liked newspapers. Good ones, bad ones, liberal, conservative or confused ones. It doesn't matter. Traveling, I always buy the local paper and read it as thoroughly as time allows. The prep sports page, local news, obituaries for people I never met, the whole thing fascinates me. I like the feel, the variety, the sense of place, the rootedness of a community paper.
That's why, though I read it rarely, I'm sorry to see the January 21 folding of the King County Journal.
The King County Journal, which has a daily circulation of approximately 39,000 copies, was formed in 2003 by the merger of two long-time suburban daily newspapers, the Eastside Journal and South County Journal. Those papers previously had been known as the Journal-American and Valley Daily News.
Both were owned by Horvitz Newspapers, which bought the chain that also included the Mercer Island Reporter, in 1994.
The closure will cause 40 full-time employees to lose their jobs. The loss of the daily will hardly be cushioned by this:
Black Press, which purchased King County Journal Newspapers from Horvitz Newspapers on Nov. 30, will continue to publish the nine non-daily community newspapers that were included in the sale.
Six of those papers — the Auburn, Bellevue, Covington/Maple Valley, Kent, Renton and Redmond Reporter newspapers — will switch from being published twice a month to twice a week, beginning Jan. 24.
The Bothell/Kenmore Reporter will switch from twice-a-month publication to once a week on that same date.
The Mercer Island Reporter and Snoqualmie Valley Record papers will continue to be published once a week.
Don Kendall, general manager of King County Publications Ltd., the newly formed subsidiary of Black Press, said the Reporter papers will be revamped to include more local news, sports and features content.
The Puget Sound Business Journal has more on the circulation and revenue slide.
Mark Briggs, who blogs on new media for The News Tribune, has an insider's perspective.
Some observers will chalk this up to the pending demise of all newspapers. But from my point of view, it says more about the previous ownership’s failures than it does about the changing media landscape. After all, this is a newspaper that lost money during the delirious 1990s of the dot-com boom, a time when other newspapers were swimming in cash.
Whatever led to this day, it's a shame ... and not solely for the paper's soon-to-be former employees and readers. We're all a little poorer for the loss.
NASCAR, the Seattle Sonics, the Seattle Thunderbirds (that's hockey), and the rodeo are all coming to town looking for money. And they're not alone. The Seattle Times sums it up.
A Florida racetrack developer wants $166 million in state sales taxes for a NASCAR track in Kitsap County. Kent wants the state to pitch in at least $10 million toward a $50 million arena to lure the Seattle Thunderbirds hockey team. In Centralia, boosters hope taxpayers will cover two-thirds of an $80 million rodeo arena. The state's five minor-league baseball parks want $18 million in renovations, including $1.3 million for a new grandstand roof at Tacoma's Cheney Stadium.
The wish list tops $240 million — not including whatever the Sonics ask for.
The Times also provides an online link to a handy one-pager, suitable for framing.
Legislators have, so far, been able to hold their enthusiasm in check. The News Tribune knows why. The public is skeptical.
This is all part of a continuing public backlash against the Legislature’s decisions to help build new stadiums for the Mariners and Seahawks in 1995 and 1997. Enough is enough, many Washingtonians appear to believe: Let the big professional sports outfits pay for their own venues.
Elsewhere, though, there's a lot of continued interest. The King County Journal reviews the Sonics search for a home. The Puget Sound Business Journal is also on it.
And the Chronicle in Centralia likes the rodeo.
It's easy to be skeptical. But with a $1.9 billion surplus, who knows? As they say, that's why they play the game.
Gov. Gregoire wants public financing for judicial elections, and put $4.4 million in her budget to support a pilot project. David Postman assesses early responses here and here.
Yesterday, the Everett Herald editorialized against her plan. They share the governor's distaste for some of the negative independent ads run in the recent Supreme Court campaigns. But, they say,
The marketplace of ideas can regulate this kind of speech just fine. ...
As long as we elect our judges - and in populist Washington, that's not likely to change - their candidacies must be subject to the political fray, messy as it is. Trust in the principle of free speech, and the voters' ability to separate wisdom from deception, is better placed than efforts to stifle political debate.
Bruce Ramsey makes a similar point in his Seattle Times editorial page column.
The campaigns were ill-mannered, but sometimes democracy is that way. The system — the whole system, including the press and interest groups — worked tolerably well. ...
He also reminded folks of how the pendulum swings, citing Eugene McCarthy's galvanizing presidential campaign that brought down LBJ and rallied Democrats against the Vietnam War. McCarthy got most of his backing from wealthy individuals, whose contributions would now be banned by campaign reform laws.
These days, opposition to campaign-finance control — it is control, not "reform" — has been a cause of the right. The left has the same interest. It also tends to get shut out when the establishment "takes the money out of politics."
The Seattle P-I editorial board takes a contrary view:
The governor's plan should be seen as a first step toward public financing of judicial elections. We don't think it goes nearly far enough, basically exchanging a candidate's agreement for a clean campaign code for matching state money. We'd rather see judges get a set amount of money -- and have them out of the fundraising business altogether. But we also recognize that perfect is the enemy of the good. Gregoire's proposal is a good first step.
In October, I wrote this, agreeing in advance with Ramsey and the Herald.
Today in the Everett Herald, John Burbank's column celebrates the latest increase in the minimum wage, from $7.63 to $7.93 per hour. In 1998, state voters overwhelmingly supported union-backed Initiative 688, which boosted the minimum wage to $6.50 per hour over a two-year period and indexed it to inflation thereafter. Burbank's Economic Opportunity Institute touted the benefits of the measure.
I wrote on this for the AWB magazine, Washington Business, last February. Indexing the minimum wage is a bad idea. Labor markets work effectively without the additional regulatory mandate. Further:
States that have set the minimum wage above the federal level tend also to adopt tax and regulatory policies that negatively affect business, making it difficult to isolate the effect of individual factors. A study we did for the Washington Alliance for a Competitive Economy provides additional perspective. Comparing border counties, Across State Lines looked at job growth in Washington, Oregon and Idaho. Washington — with higher taxes, higher minimum wage rates, and a more restrictive regulatory regime — trailed its two neighbors. Idaho, a right-to-work state with lower business taxes and the federal $5.15 minimum wage, fared best.
For workers, the benefits are also mixed.
People rarely remain long at the minimum wage, typically advancing to more lucrative employment. Increasing the minimum wage, therefore, provides little benefit to the working poor. The primary benefit accrues to those who manipulate the issue’s popularity to rally their political base and build support for so-called "family-friendly" legislation like family leave, pay-or-play health insurance and "living-wage" laws. Such attempts to dictate wages and benefits appeal to the kind of folks who want to give workers a raise without themselves having to meet a payroll in a competitive marketplace.
Ultimately, the costs compound and someone must pay the bill. The price may be reckoned in jobs destroyed or outsourced, careers denied, and opportunities lost.
Seattle P-I business columnist Bill Virgin is taking a look at regional economies this week. His column yesterday provides a concise overview of the changes in what he calls the "the Other Washington." He sets up it neatly:
Seattle ("the metroinsular city!") is often so fascinated with its own general wonderfulness and its own world-shaking problems that it is unaware of what's happening -- good or bad -- out there in the Other Washington.
Which is too bad, because there's an awful lot -- both good and bad -- that is happening in the Other Washington's economy.
Virgin confirms the continued importance of agriculture, natural resources, and manufacturing to the Other Washington. And he highlights economic and demographic changes that are transforming the regional economies, with direct implications for metropolitan Seattle and the state.
Reliance on old-economy drivers such as manufacturing, forest products and ag subjects regions to the cyclical ups and downs (and occasional booms and busts) of those industries. The in-migration of people who bring businesses, and the demand they create for others, along with the development of new industries such as alternative-energy production, will help diversify those economies and perhaps dampen some of the swings they've been subject to.
Meanwhile, he says, Seattle is riding high on the strength of its two major manufacturing firms, Boeing and Microsoft, which are both in highly volatile industries.
Combine that with such highly cyclical economic drivers as construction, and what you get is an economy that is even more likely to endure sharp turns and dizzying climbs and plunges.
Three of the five reports are available online now - links through Virgin's column - with the others to follow later this week. Good stuff.
