Olympia Business Watch

SEIU's OTHER Initiative -- Cripple State Pension Returns

From Brad Shannon at The Olympian: 

The Service Employees International Union filed a citizen initiative to the Legislature on Thursday that could limit the state's investment in major private equity companies, specifically those getting questionable tax breaks or with poor records of treating workers and the environment.

Two things are notable here:  First, apparently SEIU really can distinguish between an initiative to the Legislature and an initiative to the people.

Secondly, this idea would, as the State Investment Board points out, have a major detrimental effect on the investment strategies of the state and its effect on the beneficiaries of those investments as well as the taxpayers who would otherwise have to pony up to backfill the state's obligations.

SIB executive director Joe Dear said the initiative is troubling and would "destroy our ability to invest in our highest-returning asset class. If it's approved, it will cost taxpayers and beneficiaries millions in higher taxes and contributions."

...

The SIB would be authorized to take into account "additional investment risks posed by lack of transparency, poor employment practices, environmental impacts, and other indicators of irresponsible corporate behavior," the text of the measure says.

But Dear said, "No private equity firm that we want to  do business with will do business with us under these terms."

That would harm pensioners, he said, because $13.9 billion of the pension system's $62.2 billion is invested in private equity, which has returned 12.6 percent over the past decade compared with about 7.9 percent for pension holdings as a whole.

Apparently SEIU is serious about the initiative, and Shannon perhaps unintentionally saves the best line for last:

Cook said SEIU is serious about pushing the measure.

"You've seen us run initiatives. We'll spend whatever it costs," she said.

Indeed.

Rethink the I-1029 Petitions, Says the PI

We've been following, here and here, the ongoing kerfuffle over the legitimacy of SEIU's I-1029 petitions.  This morning the Seattle P-I editorial page agrees that Secretary of State Sam Reed ought to rethink the position he's taken on these "egregiously mislabeled" initiative petitions.

More on I-1029

This morning at our Governmental Affairs Council retreat at Alderbrook, AWB members heard a short presentation on the merits, as well as the legal shortcomings, of the I-1029 initiative from a representative of one of the members of the Community Care Coalition.  In the latter regard, it appears evident this group will justifiably challenge Secretary of State Sam Reed's peculiar decision to process I-1029 as an initiative to the people when the petitions direct him on their face to submit the measure to the Legislature. 

We touched upon all of this yesterday, here.  In comment to that post, Tim Eyman also directs attention to the reliably sensible editorial page of the Tacoma News Tribune, where it leads off today with the question "Are Washingtonians smart? Or are they dumb?"  As in, with respect to what they sign when they're asked for a signature on a petition to government. 

Realizing the SEIU's mistake means there's going to be an error one way or the other, the Tribune concludes with the key point:

As secretary of state, Reed may have the legal discretion to do what he did – though that’s likely to be challenged in court. The bigger issue is how much credit to give the voters who lent their signatures to it. Supporters of I-1029 are essentially saying that virtually all 300,000 missed the critical “to the Legislature” language and ought to be given an initiative to the people instead.

But that’s giving their inattention the benefit of the doubt. If their carefulness were given the benefit of the doubt, I-1029 would be headed for the 2009 Legislature, not the 2008 ballot.

What to do with the I-1029 Petitions?

Competing views on what to do with the legally defective I-1029 petitions today from Dick Davis's syndicated column and the Seattle Times editorial page. 

Quick background: I-1029, the local Service Employees International Union's initiative to require certification and more training of long-term care workers (and, one imagines, some how, some way, some day mint more SEIU members from which union dues can be extracted) was filed, numbered, and processed as an initiative to the people for the fall ballot.  But the actual petitions prepared by SEIU, signed by voters, and turned in earlier this month uses the statutory formula for an initiative to the Legislature, a constitutionally distinct species of direct democracy.    

Secretary of State Sam Reed, later aided by the Attorney General's office, has taken an Alfred E Neuman approach to the misstep.  He's decided to process the initiative for the fall ballot, thus choosing to ignore the directive of the petitioners themselves and instead honor SEIU's presumed intent in filing the initiative.  I-1029 opponents, the Community Care Coalition, have rightly called foul, and appear ready to seek a judicial remedy.  Lastly, initiative metaphysician Tim Eyman has weighed in to propose a via media -- don't reject the petitions outright, and don't put the thing on the ballot,  but rather effectuate the will of the petitioners as evidenced by the clear language of the petitions -- send the matter to the Legislature.

All of which Dick's piece nicely explores.  And that is a stark contrast to the Times' effort, which it seems misunderstands or brushes aside the structure, function, and purpose of any petition to the government, the importance of the distinction between initiatives to the people vs. to the Legislature, the statutory formalities that initiative petitions must contain, and the nature of the error here.  Calling the use of the statutory form for a petition to the Legislature a "minor mistake," the Times concludes the error "was not important enough to nullify 300,000 signatures."   

But there's the rub.  300,000 (or more likely, 240-250,000 valid) signatures are on a petition to the Legislature regardless of how the sponsors filed the measure back in March.  Reed's current trajectory ironically does nullify those 300,000 signatures because it takes an action contrary to their express directive.  It honors SEIU's presumed intent as sponsor, excuses the union's apparent printing mishap, and assumes the voters were ignorant or mistaken in signing the petition.      

Either way, handling I-1029 will involve tolerance for irregularity.  If Reed is forced by court order to submit the initiative to the Legislature, that will be contrary to its sponsor's affidavit and the measure would bear a way-off serial number (were this correctly filed as an initiative to the Legislature, it would have likely been called I-409).  But it seems to me those irregularities have less gravity than assuming voters didn't know, or didn't care, about the plain language of what they were signing, a position which effectively removes them from the constitutional equation and reduces them to mere cogs in a sponsor's signature-harvesting combine.

Davis, Eyman, and the Community Care Coalition have touched upon the better argument here.

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.

Politics, Red Tape Doom Tri-Cities Project

Proving the press corps doesn't take the interim off, Chris Mulick has a nifty piece of investigative reporting in the Tri-City Herald on the loss of "a major economic development score for the state" -- 400 new jobs, and possibly 625 current jobs, to neighboring Idaho.  The PI also picked up a version of the piece. 

Focusing mostly on intriguing back and forth between project proponents and the Governor's office, the story says a lot about the sometimes chilling effect of our state's legendary permitting process and peculiar environmental politics on our economic competitiveness. 

A Policy Summit Preview: Larry Sabato's Predictions

Larry Sabato, who will be speaking at this year's Policy Summit (September 24-26), got nice reviews at Capitol Comments, the Council of State Governments blog.

2008 AWB Session Review and Voting Record

We've just posted the 2008 Legislative Review and Voting Record to our website. AWB members will soon receive them with the May/June issue of Washington Business, which is in the mail now. Take a minute to review how your legislators voted on business issues in 2007 and 2008.

In the Senate, Republican Senators Jim Honeyford and Linda Parlette scored 100 percent in 2008.

Top ranking House members with 2008 scores of 96 percent were Republican Representatives Larry Crouse, Joel Kretz and Lynn Schindler.

Gov. Chris Gregoire received a 2008 score of 29 percent.

Economic Stimulus Through Public Works Spending

Carter Wood at the National Association of Manufacturer's ShopFloor blog looks at Governor Gregoire's Seattle Rotary Club speech yesterday calling for increased spending on public works as a form of economic stimulus.   

His verdict?  Deja vu.

Of Rulemaking and Sausagemaking

From this morning's P-I, on Governor Gregoire's decision whether to veto Washington's toy safety bill because of its various ambiguities and unintended consequences:

"The bill is flexible enough to allow the governor to provide the necessary guidance to the Department of Ecology to make sure those concerns are taken care of in the rule-making process -- that's the purpose of the rule-making process, it allows the department to implement the law in a way that makes sense," [the bill's main lobbyist proponent] said.

This is an interesting theory of lawmaking. 

Perhaps the response ought to be:  Flexibility -- ambiguity -- in laws creating liability for commercial conduct is no virtue, and drafting legislation so it may be, by its own terms, "implemented in a way that makes sense," is no vice.