Olympia Business Watch

Is the SEIU Initiative in Trouble?

David Seago at The News Tribune thinks so. Seago, writing last week, noted that opponents wanted the initiatives tossed because of misleading language.

The Community Care Coalition, an industry group, urged Reed by letter to reject the SEIU petitions because they describe the initiative as an initiative to the people, which would require a statewide vote in November. But the text of the initiative calls it an initiative to the Legislature, which means the measure would first go to the 2009 Legislature, and then to the ballot if lawmakers fail to approve it.

Ask yourself what would happen if Tim Eyman were to make a similar gaffe.

Here's Seago's take, with a nice link to Political Buzz:

In an earlier Political Buzz blog post, a spokesman for the secretary of state's office said he thought the office would accept the petitions because he didn't think it was a big mistake.

I think it is a fundamental mistake...

I think so, too. And the folks at the Evergreen Freedom Foundation share their thoughts here.

Two Initiatives May Deepen Budget Hole

Credit to Chris Mulick of the Tri-Cities Herald for bringing to light the effects Initiatives 985 and 1029 could have on the state's $2.7 billion budget hole. Both initiatives apparently gathered the required number of signatures for the fall ballot. If both should pass, the budget problems worsen, with the deficit expected to exceed $3 billion. Here's how Mulick reports it.

Preliminary estimates from the Department of Revenue indicate that professional initiative promoter Tim Eyman’s traffic congestion measure – Initiative 985 –would cost the state about $290 million during the next two-year budget cycle and the rest of the current one.

And the campaign for Initiative 1029, a home-care worker training measure backed by the powerful Service Employees International Union, believes its measure would cost at least $23 million during that time. That number’s based on a nonpartisan analysis of similar measures before the Legislature this year.

Tim Eyman was quick out of the blocks this morning with an email arguing that I-985 would be good for the state's economy.

Nothing slows down our economy more than traffic congestion.  Nothing would boost our economy more than reducing traffic congestion.  State Auditor Brian Sonntag's performance audit report on transportation confirms that implementing his recommendations will result in a $3 billion boost to our state's economy.    

I-985 will boost our state's economy both by the implementation of its policies and by illustrating the public's support for making reducing traffic congestion the top transportation priority.

Stopping short of claiming that their initiative will be a boon to the economy, SEIU argues that, well, it's about more than the money. From Mulick's story:

Worries about its costs don’t stand up to its benefits, campaign manager Jeff Parsons said.

“How can we not afford to take care of our seniors?” he asked. “They need to have the best care we as citizens of the state of Washington can afford to give them.”

It's early days yet. And more analyses of the initiatives will be available before the election. It is safe to say, however, that it is about the money. (cross posted at WashACE.com)

"Changes" You Can Believe In?

Sometimes policy discourse can include a euphemism so apparently political that one has to simply stop and gawk.  So it is with yesterday's Senate Ways & Means memo showing the now $2.7 billion budget gap that Richard Davis highlighted here. 

As they have done in past, it is anticipated that the Governor and the Legislature will
use available reserves and implement spending reductions and/or revenue changes.

Revenue "changes"?

 

Senate Ways and Means Committee Budget Outlook: Now a $2.7 B Shortfall

A new outlook from the Senate Ways and Means Committee shows the effects of the June revenue forecast.  As expected, the hole has deepened to about $2.7 billion.

Ways and Means staff explain their forecast this way:

[It) generally reflects the assumption that future revenue and spending
corresponds to historical trends. However, due to the complexity and potential
volatility surrounding the state's economy and factors impacting state expenditures,
this estimate should be seen as a baseline estimate to inform the Legislature and the
Governor of the current budget outlook and aid in longer term fiscal planning.

As they have done in past, it is anticipated that the Governor and the Legislature will
use available reserves and implement spending reductions and/or revenue changes
to balance the 2009-11 budget.

I'd like to see a little more talk now about those "spending reductions and/or revenue changes."

Talking Taxes - About Average Burden ... and More

The revenue department's recent release of the annual fComparative State/Local Taxes data book gave the Spokesman-Review's Rich Roesler plenty of fodder for a good tax story today. The department relies on Census Data for interstate comparisons. That's generally considered the safest, most reliable source, but it has one large disadvantage: There's a substantial time lag. The new report covers 2006 tax collections, before the recessionary slide.

Roesler gets to the bottom line in a hurry.

...total state and local taxes in Washington are actually a bit below the national average. When taxes are weighed against personal income, Washington came in 28th highest among the states. Idaho came in 29th. (All the numbers are from 2006 data.)

... To be sure, there are some wince-inducing standouts: Washington's high gas tax, for example. The liquor tax is among the highest in the nation and, at about $2.03 per pack, Washington has the fourth-highest cigarette tax.

But the data suggests that even the state's property taxes compared to average income are relatively modest: Washington ranks 29th on that measure. Idaho was 30th.

New WashACE Brief Looks at Budget Gap

A new WashACE brief examines the impact of the latest revenue forecast on the state budget.

Revenue Forecast Coverage

Yesterday's announcement of slight slippage in state revenues may have rightly taken a back seat to Sonics v. Seattle, Obama v. Obama, and McLaren being tossed out at home. But, while lacking in drama, the forecast confirms what most of us know: Tough decisions will be required to balance next year's state budget.

Washington has not escaped the effects of the national slowdown. Although Steve Lerch, the interim director of the economic and revenue forecast council, believes we'll not be in recession, that's practically beside the point. Slow growth will not be enough to avoid a substantial gap between revenues and maintenance level spending - a gap reliably estimated at about $2.5 billion.

The Washington State Budget and Policy Center gets the structural deficit half right

The new revision does not significantly alter the fiscal challenges we face. As we have said before, these challenges arise from an ongoing structural deficit in which state revenue does not keep up with spending.

Maybe not half right, just backward. Lawmakers spent too much, too quickly, and no conceivable change in tax policy could keep up.

Jason Mercier, for the Washington Policy Center, has a suggestion for voters.

Perhaps the question candidates should be asked before the election is: "Do you plan to use budget restraint or resort to tax increases to fix the state's fiscal health?"

Chris Mulick live blogged the meeting for the Tri-City Herald, passing up an Eyman press conference and sharing the hassles of live blogging with readers. The PI's Chris McGann also provides blog coverage, as does Rich Roesler for the Spokesman-Review.

Rachel La Corte's AP story brings in the gubernatorial politics.

Gov. Chris Gregoire's Republican opponent, Dino Rossi, seized on the report to blame Gregoire for "out-of-control spending."

Gregoire said Washington was in better shape than most other states.

Brad Shannon also has a good story in the Olympian.

The next forecast comes out in September.

Zarelli Calls for Hiring Freeze to Ease Budget Woes

State Sen. Joe Zarelli, R-Ridgefield, has issued a new "Budget Tidbit," making the case for a state hiring freeze.  He notes that since the February forecast

...Washington has lost jobs in the last three monthly reports,3 and recently the state’s forecast council revised downward our state’s economic and job growth projections for the next two fiscal years. Tomorrow brings the new quarterly state revenue forecast, potentially exacerbating the deficit projection.

I'm not sure about hiring freezes, but there's no question that Zarelli's recommendation conforms neatly with Denis Healy's First Law of Holes.

Unionization of Colorado Public Employees Moves Ahead: The Minority Rules

In January we posted on the curious, nearly subterranean, ways in which public employees in Colorado gained collective bargaining rights. Odd that we always say it that way, as if all public employees in Colorado wanted collective bargaining. Although I'm not thrilled with the outcome, at least in our state, expanded collective bargaining came about by legislative action and a gubernatorial signature. In Denver, the governor slipped it through by executive order.

Now, we see that the unions continue to gain ground. Hard to tell if it's a move the average public employee supports.

About 6,900 state workers from a pool of 22,500 who were eligible participated in the election, which gave them a choice between Colorado WINS or no union representation. Of those, 5,481 supported the union.

The results were based only on the number of votes cast, but even those who did not vote will now be represented by the union — regardless of whether they pay the voluntary union dues.

Hardly an overwhelming endorsement.

Comcast Newsmakers: Streamlined Sales Tax

Amber Carter of the Association of Washington Business appeared on "Comcast Newsmakers" to discuss the new Streamlined Sales Tax which will be implemented in Washington state July 1st, 2008.

For more information please check out www.destinationtax.dor.wa.gov.