Washington Policy Center Blog

Paramount duty?

In the midst of a lawsuit by the Washington Education Association against the state for “inadequately” funding schools and thus failing the state’s paramount duty as stated in the Constitution, it appears teachers in the Bethel school district believe the best way to fulfill their paramount duty to students is to keep the school doors shut by engaging in an illegal strike.

The Tacoma News Tribune quotes Clover Creek Elementary School teacher Danielle Edmonds saying, “We’re really doing this for the parents, and the community and the children,” Edmonds said. In order to get high-quality teachers, we need that “TRI” (more pay for work outside the school day) package and we need class sizes manageable so we can instruct their children … in the best way we can.”

That’s a new one. The teachers are engaging in an illegal strike for the parents.

While the state’s teacher unions have claimed that the law concerning strikes is unclear, the Attorney General weighed in unequivocally in 2006 saying: “In Washington, state and local public employees do not have a legally protected right to strike. No such right existed at common law, and none has been granted by statute.”

Back in 2002 in the case Issaquah School District vs. Issaquah Education Association, King County Superior Court Judge Joan Dubuque said the following when granting an injunction to end that illegal teacher’s strike (courtesy EFF):

“…It is this court’s determination, after reviewing the Supreme Court precedents of this state and well as the laws of this state, that teachers do not have a right to strike, and what is going on is an illegal strike at this time.”

She went on to say:

“Under our state constitution, Article IX, Section 1, it is clear that the state has indicated and said expressly that the paramount duty of this state is to provide a public education. There is statutory authority implementing that paramount interest of the state, and that is mandatory education provisions that we have for all children. As I have indicated, our Supreme Court, in decisions ranging from 1958 forward has affirmed, has reiterated, and has expressly stated the fundamental precept that there shall be no public employee strikes, and there has been no legislative action by the legislature to overrule this common law.”

She concluded:

“At common law in the state of Washington, our Supreme Court has spoken at least three separate occasions, and has made it abundantly clear: Strikes by public employees are illegal. Port of Seattle was decided in 1958; Roza was decided in 1972; Burke and Thomas were decided in 1979.”

As for the issue driving the Bethel teacher’s strike, TRI, the Attorney General may want to comment on whether he thinks what is being requested is legal. A good review of the TRI controversy here: Skirting the law on teacher pay raises

Let the light shine

Today was the first meeting of the state’s Sunshine Committee created by SB 5435 (adopted with only one dissenting vote this past year). The purpose of the committee is to review the more than 300 exemptions from disclosure carved out of the state’s public records law. When the law was originally adopted by votes in 1972, it contained only 10 exemptions from disclosure.

 

Hopefully not a harbinger of things to come, the committee got off to a rough start even before its first meeting with news that Governor Gregoire appointed City of Seattle attorney Tom Carr as chair. Carr is best known to supporters of open government for his role in a Supreme Court case a few years ago RESTRICTING access to public records.

 

Here is a sample of the editorials commenting on his appointment:

   

Gregoire Appointment Doesn't Fit With Open Government Claims

Will the sun shine again?

Restore access to public information

Wrong man for job

Public Records: The Empire Strikes Back?

 

One interesting suggestion at today’s hearing was to take the preamble of the state’s public records law and put it into the state Constitution. According to the act:

 

“The people of this state do not yield their sovereignty to the agencies that serve them. The people, in delegating authority, do not give their public servants the right to decide what is good for the people to know and what is not good for them to know. The people insist on remaining informed so that they may maintain control over the instruments that they have created. This chapter shall be liberally construed and its exemptions narrowly construed to promote this public policy.”

 

If an effort was made to put this into the state Constitution it may very well receive the highest margin of support ever for a ballot measure.

Show us the spending

It appears budget transparency is on the agenda of at least three presidential hopefuls. As reported by Reason Magazine:

“Presidential aspirants Sen. Barack Obama (D-Ill.), Sen. Sam Brownback (R-Kan.), and Rep. Ron Paul (R-Texas) . . .  have signed off a trans-partisan initiative that has the potential to radically transform not just the presidency but the way the federal government does business. Obama, Brownback, and Paul have all signed The Oath of Presidential Transparency, a pledge to follow through on two actions.

First, signatories agree to conduct "THE most transparent Administration in American history--a lofty, laudable, far-reaching goal. This oath signals that whether it's earmarks, directives, or ongoing management of taxpayer expenditures, the goal of transparency will be evident throughout all policy making aspects of your Administration."

Second, signatories commit their presidential administrations "to full and robust implementation of the Federal Funding Accountability and Transparency Act (FFAT Act) of 2006." The heart of that legislation, co-sponsored by Obama and Sen. Tom Coburn (R-Okla.) in the Senate and signed into law last year by President Bush, is the creation of a free, searchable website that will list every recipient of every federal award.

Regardless of ideology or partisan affiliation, this is something that every American--with the possible exception of lawmakers who prefer to shroud their activities out of guilt, shame, fear, or some combination of the same--can get behind. Estimated to cost a relatively measly $15 million between now and 2011, the searchable database will give watchdog groups, government reformers, and regular citizens unprecedented amounts of information about where taxpayer dollars are going and how their elected representatives are behaving.”

The Washington Policy Center is part of the Reason Foundation-led coalition that is circulating this transparency pledge to presidential candidates. While having three signers is great, what do the remaining candidates have against spending transparency?

Closer to home, WPC is encouraging state lawmakers to consider enacting the same type of budget transparency the feds adopted in 2006. Stay tuned for new developments.

How about hiring some oversized scissors instead?

Are you a small business owner who feels that your business can't make any move whatsoever without having to deal with strong government regulations? (Is the Pope catholic?)

Yesterday the National Ombudsman for the Small Business Administration came into town to hear just a smattering of regulatory nightmares small business owners and entrepreneurs face from federal regulations. The SBA's Office of Advocacy and the National Ombudsman play an important role in attempting to show government agencies just how the thousands of federal regulations affect small businesses and to what cost. It's unfortunate that we need them.

Federal regulations cost the American public $1.142 trillion in compliance costs in 2006 (that's Trillion with a capital T); that's 9% of our national GDP. If you combine the cost of regulatory compliance with the federal budget, the reach of the federal government is 29% of our entire economy.

Since 1995, agencies and Congress have enacted 48,000 regulations. To Congress' credit, they are only responsible for around 8% of the total regulations hitting businesses over the head. Until regulations are recognized for what they are -- de facto taxes -- expect the regulatory burden to get worse. The general electorate is much more likely to revolt or vote our representatives out of office when taxes are raised, they are far less likely to do the same when the regulatory burden increases.

Until something changes, expect to see more bureaucrats hired to "help" small business owners wind their way through layers of red tape. More bureaucrats to help with the regulations. That doesn't sound promising.

State's earmark budgeting exposed

Kudos to the Seattle Times for digging into the state’s capital budget and highlighting questionable “earmark” spending by lawmakers. As noted by the Times:

The Everett School District will soon get $433,000 from the state to spruce up its sports-stadium complex — even though it didn't ask for the money. In Seattle, a nonprofit assisted-living home has received $1 million in state grants to renovate and expand its operations. It's also been cited with multiple licensing violations and been briefly banned by the state from accepting new residents on three occasions. And in Tukwila, the state plans to spend $10 million on a road needed for a proposed 490-acre development. The developer is a large contributor to Democrats and has donated to the Senate committee chairwoman who helped get the money. These projects weren't handled like the vast majority of those paid for by the state's capital budget, which totaled $4.3 billion for the 2007-09 budget cycle. They were added — or earmarked — at the request of one or more lawmakers on behalf of their constituents. While many earmarked projects may be worthwhile, they often get little scrutiny. Their merits aren't widely debated in legislative hearings. Sometimes you can't tell which lawmaker asked for a particular project. Earmarked spending has reached record highs since Democrats gained control of the state House, Senate and governor's office in 2004. Since 2005, lawmakers have spent or allocated nearly $270 million on earmarks in the capital budget, which funds construction projects. That's more than was spent in the previous 15 years combined.

Besides demonstrating a lack of prioritization by our elected officials, this type of feel good budgeting has real consequences for STATE projects as noted in 2005 by the legislature’s auditor, JLARC:

"...executive oversight of facility projects is not being accomplished in the manner required by statue and [the Office of Financial Management's (OFM)] own process as outlined in the Capital Budget Instructions. . . . The greatest weakness we found centered on resources and priorities for OFM." "Changing workloads have compromised OFM's ability to conduct front-end capital program evaluation. Moreover, the Legislature has contributed to this shift . . . [r]ising capital investment in local government and community-based projects, resulting in less time available to work on advancing state facility projects." "OFM's lack of benchmarks, uniform procedures, and historical performance information causes inefficiency in approving spending plans . . . OFM's ability to evaluate proposed major projects is compromised by heavy workload demands, unclear priorities and legislative directives, and weak information systems for front-end evaluation and cash control review."

The next time the capital budget is up for debate, it is up to taxpayers to remind lawmakers it’s the STATE capital budget, not Christmas time for LOCAL earmark projects.

We're all in this together, sort of

Apparently state Insurance Kommisar Commissioner Mike Kreidler doesn't like the fact that Premera Blue Cross is using surplus revenues from its Washington business to bolster its LifeWise insurance plans in Arizona. LifeWise is a new endeavor offering some of the least expensive individual and group insurance plans in Arizona, and like a lot of new businesses, it needs an infusion of capital.

I guess it's ok for the state to transfer funds amongst accounts and programs in ways that befuddle even the most learned, but heaven forbid a private business use its funds to expand its services to other people.

Back home there's a family that owns two successful grocery stores, each at opposite ends of the state. It's not inconceivable to think they occasionally use surplus revenue from one store for projects in the other, such as expanding the produce section or building a new deli. I wonder if the state Grocery Commissioner will go after them for doing that. Oops, silly me, I just checked and it seems we don't have a Grocery Commissioner. I guess I just assumed the state had a full fledged agency to regulate that industry, too. What was I thinking?

Kreidler's action highlights a major problem in the way states and the federal government regulate health insurance. Right now we can buy car insurance, homeowner insurance, renter insurance, life insurance, and probably any other kind of insurance you can think of, from ANY state in the union. We can go to any place in the country and buy other necessities of life--food, clothing, transportation. For that matter, I can go to some city in Florida I can't even pronounce and hire a contractor to come to WA and build my house.

But you can only buy health insurance from a company in Washington. Period. Rather than promoting the national common good by opening a national market, state insurance regulators have carved out their own little fiefdoms to control who comes hither. Premera Blue Cross is trying to help people in Arizona afford quality health insurance and the state put a stop to it.

Next time you wonder why your health insurance is so expensive, take a look at how many insurance companies are selling plans in Washington. Then go look at how car dealerships will bend over backwards lowering their prices and financing terms to get you to buy from them instead of the 5,000 other dealerships down the road.

Pick a winner

The New York Times reports that the federal government is using cryptic earmarks to give certain hospitals and health care providers larger Medicare reimbursements.

Government regulation picks winners and losers through such byzantine regulatory schemes as Certificate of Need, so we really shouldn't be surprised they use subsidies to do the same thing.

And surprised we aren't. But the really disturbing point of note here is that the legislation doesn't name the hospitals by name. Drafters instead use code-talk. For example, rather than the name, the bill refers to a hospital located on the border between Wisconsin and Michigan's upper peninsula.

English writer Oscar Wilde once opined that hypocrisy is the tribute vice pays to virtue. Proponents of the aforementioned earmarks seem to know all about that, or they wouldn't have used cryptic language in their legislation.

When the government flexes its muscle -- be it through subsidies or regulation -- to pick winners and losers amongst businesses, we all lose. The market is the best way to pick winners and losers: those groups that provide the highest quality services at the lowest cost with greatest efficiency will survive and win, and the others will lose. Purchasers will vote with their feet and their pocketbooks. This is how it works with the other five-sixths of the economy, in food, clothing, transportation, housing, etc.

But until voters and taxpayers demand lawmakers and bureaucrats step aside and allow a true health care market to open, the government will keep on picking.

Responsible Pruning

As the Seattle Post Intelligencer says, "Big Ups" to a recent Disco-tech blog entry on capital gains taxation policy. In the post, author Bret Swanson quotes economist Irving Fisher:

"Think of a fruit-bearing tree. The tree both grows and yields fruit on an annual basis. The tree is effectively a capital asset, the fruit is the income, and growth of the size of the tree -- which will yield more fruit in the future -- is like a capital gain.

The fruit can be taxed without hurting the tree or diminishing its capital -- its ability to grow and bear more fruit in the future. But taxing a capital gain is like sawing off limbs of the tree. That diminishes its capital value and inhibits the tree's ability to produce fruit; that is to say, future income."

Though many "freedom from all taxes" people still walk the earth, most of us recognize that taxes pay for essential government services that we don't want to provide for ourselves. Our biggest concern with any taxation policy is twofold; first, that the tax revenue collected is spent efficiently and on core government functions. Second, that the system in place minimizes the economic effect.

Specifically targeting capital gains as juicy streams of tax revenue is one of the more shortsighted taxing policies in existence and shows just how out of control government has become in determining what should be taxed. As the disco-tech entry points out, taxing capital gains is taxing innovation. Now, who in their right mind wants to do that?

Reason #528 why sin taxes are bad policy

The USA Today reports this morning that while tobacco taxes are on the rise, smoking is in decline. That's bad news for lawmakers scrambling to fill state and federal coffers with funds to pay for ever-expanding health care entitlements.

Lawmakers are often schizophrenic about sin taxes. They want to use the tax to discourage behavior of which they disapprove, and at the same time want to extract revenue to pay for their spending programs.

What happens when they succeed in the former goal? They raise the tax and search for someone else to tax because the latter objective proves to be their primary motivation.

Here's a modest proposal: start selling cigarettes and cigars to zoos so animals fond of imitating humans can start smoking. That'll keep the revenue stream flowing without damaging human health.

Sounds absurd, right? Almost as absurd as taxing something to discourage its use while pegging the funds to health care spending, which is getting more expensive every year.

Thank you for smoking

It's not just the tobacco industry who thanks you for smoking, but state legislators too. Why? Because without tax revenues from your nicotine habit, they'd be in big trouble.

Maybe they already are.

The Seattle Times today reports that fewer adults are smoking in Washington. Yikes!!

"The toughest challenge is still ahead, said Secretary of Health Mary Selecky: Lower-income, less-educated people are still smoking at higher rates and are less likely to quit successfully."

Be careful what you wish for, Mary, because according to the Washington State Department of Revenue, in 2006 the state collected more than $460 million in tobacco tax revenue. Where does it go? State-subsidized health insurance for Washington residents.

But here's the real kicker:

"Selecky said the state will shift money so that more nicotine-replacement therapies, such as patches, are available to low-income residents who want to quit."

I see. So the state will tax the product being used, use most of the revenue for what lawmakers consider a top spending priority, then use some of the revenue to pay for programs intended to discourage the use of the product being taxed? It would be laughable if it weren't true.

This is unsound public policy, and it puts the state in a pickle: citizens become addicted to tobacco, then lawmakers become addicted to the revenue from taxing tobacco. What happens when citizens actually break free from their addiction? Might the state break free from its addiction to the revenue? Hmmm. I guess they'll just have to find someone else to tax.

Smoke 'em if you got 'em.