Olympia Business Watch

Business Groups Fight Change in Vesting Law

February 26, a group of business associations and major developers wrote members of the State Senate in opposition to SB 5507, a bill that would upset existing property development vesting laws. This measure has not received much press coverage. It should.

As the letter, on AWB letterhead, says:

To extinguish the vested rights doctrine, as this bill would do, would be to remove all certainty and predictability from the process. Both public and private projects require a reasonable level of certainty and predictability.

Not that long ago, the Washington Competitiveness Council ranked regulatory reform as a top priority. Consider this finding from the first WCC report:

The current regulatory structure unnecessarily delays projects, increases project cost, creates unnecessary uncertainty, reduces operating flexibility, and increases barriers to business growth. It stirs hostility toward government. It wastes resources, increasing government costs. It leads to angry applicants and it encourages project opponents to manipulate the permitting system.

In the years after the report was released, state officials made progress. SB 5507 is a great leap backward. Worse, really.

Public Vote for Sports Facilities?

It looks like any decision on the proposed NASCAR track and the Sonics new arena will go to the voters after all. If, that is, the Legislature decides to move them forward. And that's still a long odds bet.

Sean Cockerham writes in The News Tribune that NASCAR backers agreed to let voters in Pierce, Mason, and Kitsap counties weigh in on the controversial plan. But the deal is far from done.

The bill is in serious trouble, though, and top legislators said adding a vote isn’t enough.

State Rep. Ross Hunter, chairman of the House Finance Committee, said Tuesday that he isn’t nearly ready to let the bill out of his committee. The Medina Democrat said he has concerns that range from the tax financing to the traffic issues.

“And I’d have to have support from the local electeds and legislators who represent the area,” Hunter said. “I certainly don’t have that.”

Meanwhile, in basketball news, the Sonics owners have decided that a vote may be in order. Greg Johns and Chris McGann have the story in the PI.

... the new principal owner of the NBA franchise also told a House committee in Olympia that a public vote on the proposal is no longer a deal breaker.

"I'm open to whatever the right answer is, whatever leadership recommends and whatever's right for this region," Bennett told lawmakers.

That's a change from his earlier stance.

I think the vote's the right way to go and say so in this morning's Everett Herald.

A Critical View of Canadian Health Care

For reasons I've never understood, more than a few Washingtonians look north for health care inspiration. Froma Harrop, a syndicated columnist carried by the Seattle Times, provides a timely reminder of why that's a bad idea. Today's column is a must read.

Many of my left-leaning friends ... worship at the altar of "Canadian-style single-payer." (I once belonged to the cult.) That's too bad because there are better universal-access systems to parade through a PowerPoint presentation. A health-care system that tolerates an average 10-week wait to use an MRI machine is not to be copied.

The Fraser Institute in Vancouver recently compared Canada's health-care system to about two dozen others — and found Canada's highly wanting. Yes, the Fraser Institute has an agenda: It promotes privatization and in the Canadian context is economically conservative. But its analyses of Canadian health care are sophisticated and honest. Unlike many conservatives in this country, Fraser starts with the premise that universal coverage would be a basic requirement of a modern health-care system.

Here's the Fraser Institute study.

Harrop sums it up in several sharp paragraphs.

First off, don't go the single-payer route, where the government picks up all the bills. Americans often confuse "universal coverage" with "single-payer." The great majority of universal health-care systems are not single-payer. They allow private coverage into the mix.

Why is that better? For one thing, patients who use private medical services reduce the load on the public system. ...

Private competition also helps assure quality. Without an alternative, the monopolistic system becomes an "uncontested standard" that may be inferior.

...

Canada and a few others take pride in not asking patients to pay a cent of their health-care costs, but it's a mistake not to charge user fees. ...

Canada's medical free ride leads to overuse of services. And that may add to the long waiting times — for which Canada is the worst, except for Britain's dismal National Health Service.

It's a good column. She goes a lot further than I would in encouraging a look at other models for universal coverage. I continue to believe we have a system that works extremely well for most Americans. We don't need to scrap it - better to make incremental improvements that allow more people to find affordable comprehensive coverage.

Viaduct Controversy Hits the Economist

A nasty report in the venerable Economist. No one looks good.

Seattle's tunnel has become a trip to political hell. All aboard.

Tough audience.

Research Council Releases Two Valuable New Reports

Yesterday the Washington Research Council released a report examining the so-called Connector, the Massachusetts health care strategy that has sparked national interest, including here in Washington.

Here's their conclusion:

With any luck federal tax code barriers to health care coverage for individuals and the unemployed can be fixed first, so that states may avoid constructing cumbersome, complicated, and costly ‘work-arounds.’ Not only are the long-term consequences of their real-life applications highly questionable, but they have not yet been demonstrated to actually work anywhere.

Governor Gregoire recommends a ‘go-slow’ approach. We agree. There are still too many questions and not enough answers about connectors. With luck, some of the answers will be supplied by the Massachusetts experiment.

The Council also released a report looking at the role construction plays in our economy and the impact it has on state revenues.

Construction activity has a powerful impact on state revenues. And changes in state policy that reduce the level of construction activity will, therefore, have an impact on the general fund. Legislators should keep this fact in mind as they consider bills such as SB 5046, which, by increasing the liability exposure of contractors, could reduce the level of residential construction activity in the state.

The state’s deep fiscal crisis of the early 1980s stemmed from the unwinding of a historic construction boom.

Here's the important caution:

The last downswing in construction earnings’ share lasted for nearly 6 years (from the second quarter of 1990 to the first quarter of 1996) and the next downswing could last well into the 2009–11 biennium. The result would be a long period over which state revenues grew at less than their long-term trend.

Legislators should exercise caution as they write a budget for the 2007–09 biennium. Unlike the experience of recent years, above trend growth is unlikely to erase any structural budget deficit.

Both reports are well worth your time. Good stuff.

Climate Change Accord

Hot on the heels of Al Gore's night at the Oscars, five Western governors announced their agreement to work on global warming.

The governors of Arizona, California, New Mexico, Oregon and Washington state agreed to develop a regional target to lower greenhouse gases and create a market-based program aimed at helping businesses reach the still-undecided goals.

Lisa Stifler in today's PI has more on the agreement, including this from Grant Nelson.

Grant Nelson, governmental affairs director for the Association of Washington Business, was pleased that the business community would have input into the process thanks to a stakeholders group that the governor is forming.

Grant's referring to the process Gov. Gregoire announced February 7 and discussed here.

Emergency or Expedience?

Folks have railed against the Legislature's overuse of emergency clauses for several years. In the Everett Herald Sunday, Rep. Barbara Bailey has an op-ed laying out the problem and proposing a fix.

In the Legislature, an emergency clause added to a bill allows the measure to become law immediately after the governor signs it. Other bills signed by the governor but lacking the clause must wait until 90 days after the legislative session ends. ...

An emergency clause also exempts a bill from the referendum process. It is this power that most concerns me because of its potential abuse by lawmakers who may apply the emergency clause to a bill not to respond to an emergency, but to prevent citizens from changing legislation.

They're not rare.

During the 2005 and 2006 sessions, lawmakers attached emergency clauses to 447 bills. One which contained an emergency clause was a bill that eliminated, until June 2007, the two-thirds requirement to raise taxes and instead gave lawmakers the ability to raise taxes with only a simple majority. ... From those two legislative sessions, 132 bills containing emergency clauses were signed into law.

Here's her solution.

The measure I have proposed, House Joint Resolution 4218, would require 60 percent approval from the Legislature before an emergency clause could be attached to a bill.

Because use of the emergency clause is written into the state's constitution, it requires a vote of the people to make a change. If approved by the Legislature, Washington's voters would get the final say this November on strengthening the legitimate use of the emergency clause.

MORE AWB agrees that overuse of the emergency clause jeopardizes the citizens' referendum.

Lobby Lunch Podcast - Transportation

A great lobby lunch discussion Thursday on Transportation. Guests were Senators Mary Margaret Haugen and Dan Swecker and Representatives Fred Jarrett and Judy Clibborn. All but Sen. Haugen were able to join us for the podcast discussion.

Another Unhelpful School Funding Study

The Seattle Times reports on the latest education study finding that the state needs to increase spending a lot.

Public-school spending in Washington state needs to increase by 45 percent to $11.2 billion a year, according to the latest attempt to estimate how much schools need for students to reach state and federal learning goals.

The authors modestly acknowledge that it doesn't have to happen all at once.

"There's no way in the world that this was supposed to be something to fit with your current fiscal resources," said David Conley, the study's lead author and professor of education policy at the University of Oregon.

Instead, Conley said, it's designed to be phased in over time.

The study was paid for by the Washington Education Association.

Predictably,

To significantly increase school funding, said State Rep. Kathy Haig, D-Shelton, chair of the House Appropriations Subcommittee on Education, the state needs to have an honest discussion about where to find that money, and an income tax needs to be part of that conversation.

Expect the study to figure prominently in the coming lawsuit.

This is a much better way to look at education spending.

Perhaps not the Worst Bill of the Session ...

... but a contender.

Tuesday AWB’s Kris Tefft testified with a number of manufacturers - large and small - including The Boeing Company, Hobart Machinery, Goodrich Corporation, and Toray Composites -- in opposition to House Bill 1828.

Don Brunell wrote about this one earlier.

This year, union leaders are pushing legislation in Olympia that would bar aerospace companies from getting state tax incentives unless they agree to remain neutral toward union-organizing efforts. Under the proposal, aerospace suppliers would lose their tax incentives if they "choose to encourage or discourage unionization." In reality, the law is intended to penalize companies that oppose union organizing efforts.

... If legislators and the governor bend to the unions, they will send the wrong message to Boeing and other companies who are considering whether to locate, expand or upgrade operations in Washington. While the bill targets Boeing suppliers in Washington, its impact is international.

Kris hits another reason lawmakers should take a pass. Call it the inconvenience of the First Amendment:

Employers do not give up their rights to free speech when they choose to incorporate; to take on employees; or even to pay taxes at one tax rate versus another. Yet this bill seeks to regulate the content of employer speech on the basis of tax rate.  There is no compelling governmental interest that could pass the kind of strict constitutional scrutiny this bill would receive.