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.

"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"?

 

Gubernatorial Candidates in The News Tribune

In The News Tribune's Sunday "Insight" section, the gubernatorial candidates square off, sharing their thoughts on the last four years and what to expect in the future.

We're pleased that the paper put to such good use the letters Dino Rossi and Chris Gregoire wrote to AWB members.

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. 

What Unions Want from the 2008 Elections

In this week's (June 21) The Economist magazine there is a story about America's labor unions and what they expect out of the 2008 elections.  Here is the checklist:

• universal health care and decent pensions
• protection against "callous" managers and foreign competition
• end to secret ballot elections in union organizing campaigns

The magazine reports the American Federation of State, County and Municipal Employees has linked up with MoveOn.org on an anti-McCain TV spot,  The message is "John McCain, when you say you would stay in Iraq for 100 years, were you counting of Alex?  Because if you were, you can't have him!"  The point is they are deviating from the traditional labor issues and going for the election win.  The Economist points out labor unions see a rare opportunity for Democrats to capture the White House and both houses of Congress.

Unions are sending people you trust to your door to get you to vote for Democrats.  The AFL-CIO is spending $53 million and expect to reach 13 million voters.  In Washington it is called their "Labor-Neighbor" program and it is designed to get people who support their candidates and issues to vote.

Unions are concentrating on 24 states and giving top priority to Ohio, Pennsylvania, Wisconsin, Michigan and Minnesota--the must win states for Barack Obama.

Finally, unions are catching up with business group spending.  According to the magazine, in 2000 firms and their workers outspent unions, 3 to 1.  In 2006, it was 2 to 1 and they are going all out.

All this activity is cascading down to the state level as well.  This is going to be a year where those who provide jobs need to be active and involved.   Here is the link:  www.economist.com.

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.

Job Protection Trumping Environmental Protection

A recent survey by Moore Information shows that a cooling economy has led to a shift in voter opinion regarding jobs and environmental protection.

Specifically, voters today are more likely to say they are concerned with protecting jobs (51%) than protecting the environment (39%). The remaining 10% have no opinion. … this sentiment has reversed from a year ago.

Here’s the question:

On issues involving jobs and the environment, are you more concerned about protecting jobs, or more concerned about protecting the environment?

In 2007, environmental protection won out, 49-40.

As they say, read the whole thing. It’s short, just two pages with some interesting subgroup tables.