Trying to figure out how to have this kind of performance in all our schools in Washington is more difficult. A school and a district’s reputation drive population movement. Many people have moved to Bellevue and Lake Washington because of the schools. These tend to be people who value education, and consequently their students tend to do better in school. This drives the performance of the district, further improving in-migration of education-lovers. Interestingly, this also drives up home values.

Government scientists found that chairs containing flame retardants, like the one being tested above, burn just as fast as identical chairs without them. (Consumer Products Safety Commission / May 5, 2012)

In 2005, 2006, and 2007 I championed a bill in the Legislature that prohibited the use of poly-brominated diethyl (PBDE) flame retardants in products sold in Washington State. I argued that PBDEs were toxic for children and unnecessary. It was an ugly fight with the chemical industry. I was surprised at the level of duplicity in the testimony presented. At that time I had not seen the level of hardball that people were willing to play when their financial interests were at stake.

I eventually succeeded in banning PBDEs in most furniture and children’s products, though the industry is working to slightly tweak the chemical composition of their product to get around the ban. The Chicago Tribune has done some serious reporting on the issue and is coming out with a big series of articles that expose an even deeper level of duplicity than I had believed possible, even after seeing the testimony here in Washington.

The average American baby is born with 10 fingers, 10 toes and the highest recorded levels of flame retardants among infants in the world. The toxic chemicals are present in nearly every home, packed into couches, chairs and many other products. Two powerful industries — Big Tobacco and chemical manufacturers — waged deceptive campaigns that led to the proliferation of these chemicals, which don’t even work as promised.

Chicago Tribune

This is a follow-up to an April 5 press release (attached) we sent you regarding SR 520 construction on Lake Washington. We are operating under new Coast Guard requirements for boaters with vessels over 45 feet tall. Please see today’s attached traffic advisories regarding a bridge opening this afternoon.

Updated Coast Guard rules require WSDOT to open the SR 520 drawspan for tall vessels with advance notice. This requirement is in place because floating bridge construction barges block the eastern navigation channel near Medina, which has clearance for boats up to 64 feet tall. A majority of boats use the 45-foot-tall west navigation channel to pass beneath SR 520.

Drawspan openings this week and weekend

We have twice successfully avoided opening the SR 520 drawspan during the daytime by working with the contractor to allow some non-commercial vessels to pass by their equipment. This week crews are pouring the bridge’s first shaft anchor and positioning equipment for other anchors. There is too much construction activity near the Medina shore this week to make a safe path for boaters.

As a result, at least four sailboats with masts taller than 45 feet are expected to require daytime drawspan openings today, Friday and Sunday (April 19, 20 and 22).

Today at 12:30 p.m., we stopped motor vehicle traffic to allow a sailboat to pass through the SR 520 drawspan. Although the process of opening and closing the drawspan can take up to 30 minutes, we were able to accomplish it in 20 minutes. We worked closely to negotiate this midday opening to avoid more severe traffic impacts during the evening commute. We warned drivers using WSDOT’s many communications tools, including variable message signs approaching the bridge, mainstream and social media. Attached is the traffic advisory explaining the situation to media.

We are minimizing driver delays on Friday by opening the drawspan at 11 a.m. for two vessels, instead of doing two separate openings.

Balancing bridge traffic, construction and boaters

As the weather improves more drawspan opening requests will occur. WSDOT and the Coast Guard are working cooperatively to further revise the new requirements to strike the right balance to meet the needs of boaters while minimizing driver delays and maintaining construction progress.

Our construction equipment will be out of the eastern navigation channel during the first weekend in May, which is the official opening of boating season, so that vessels can pass under the bridge during this busy maritime weekend.

I will update you again in the coming weeks as we continue to work with the Coast Guard. Please contact me with any questions.

More information for drivers and boaters is available on our website: http://www.wsdot.wa.gov/Projects/SR520Bridge/BridgeAndLanding/DrawspanInfo.htm

Sincerely,

Julie

Julie Meredith, PE
SR 520 Program Director
SR 520 Bridge Replacement and HOV Program
Washington State Department of Transportation
206-770-3568 direct | 206-770-3500 main
600 Stewart Street, Suite 520 | Seattle, WA 98101

Visit us at our Web site: http://www.wsdot.wa.gov/projects/sr520bridge/

This newsletter only addresses operating budget issues. Lots of other interesting things happened or are happening (520 bridge construction, for example) and I will address those in the next document.

The Operating Budget

We left the 2011 regular session with a budget that most neutral observers thought was a pretty reasonable product. It was balanced and had a healthy reserve of over $700 million. The final vote was a bipartisan one, with significant participation from Republican Senate members. Since then we’ve had pretty significant declines in our revenue projections due to the economy and faced about a $2 billion projected shortfall coming in to the December special session.

In that session we solved about $500,000,000 of the problem, leaving about $1.5 billion left to fix in January. We got good news in the forecasts, reducing the problem to about $1 billion, which we addressed in this year’s supplemental budget. Our negotiating process was bi-partisan, as was the final voting pattern.

The budget has no cuts to education. This means early learning, K-12, and higher education were left whole. This is a miracle, and was not accidental. I felt strongly that in light of the Supreme Court decision on school funding we could not in good conscience make reductions here, and as the budget committee chairman my opinion was able to prevail.

We worked very hard to preserve a functioning safety net, including maintaining healthcare for 50,000 people that the governor’s initial proposed budget and the Senate Republican budget eliminated.

The final package included several reforms that will help stabilize the budget in the long run:

• A significant reduction in early retirement pension provisions for new employees, saving $1.3 billion over 25 years. This is on top of almost $10 billion in (25 year) savings implemented in the past few years.
• A new balanced budget requirement for both the current and the subsequent biennium. The important reform here is the new process for producing long-term outlooks with assumptions that will be clear and adopted by the legislature.
• Added transparency in school employee healthcare purchasing. We spend $1.2 billion on this annually and it has been very opaque.

Like any budget chairman I worry all the time. Did we leave enough ending fund balance? Will the economy recover, or will Europe repeat the great depression, dragging us down with them? Did we not understand some big driver in our caseloads that all of a sudden turns around? Despite my worrying, we made a good set of decisions and the budget is much better than I would have expected in the fall.

Long-Term Outlook

As part of our efforts to resolve the budget difficulties we made significant long-term changes in how the state operates.

• In the past decade state population has increased by over a million people, resulting in a new congressional seat, so we are growing faster than other states, but the number of general government state employees per state resident has declined 13.4% over the past decade, and that’s before over a thousand FTEs were eliminated in this budget.
• Last year we adopted a process to regularly consider outsourcing of various functions, mostly administrative. The state printer comes up all the time – we’ll be taking a serious look at it this year.
• Over $11 billion in 25-year savings in the pension system made in the past several years. As a result of these changes and responsible actuarial work we have one of the top (#3) funded pension systems in the country.
• Repeal Initiative 728. Our re-write of the basic education funding model makes better use of the money than the original initiative did and leaving it in place resulted in double-counting in future biennia. This was painful to me personally, but we will make better use of the money in “basic education,” and the school community agrees.

The budget we adopted meets the “balanced” test in the new balanced budget requirement, both in this biennium and in the next. However, there are some deep structural concerns about our revenue structure.

• Revenue as a percent of the economy has declined significantly over the last few years.
• We are paying the lowest state tax rate since 1962 when we started keeping comparable records.
• We are back to the same per-capita general fund spending adjusted for inflation as we had in 1986. Most of our medical costs have increased much faster than inflation in that time.

Our long-term expenditure model has some serious concerns as well, concerns that will have to be addressed in the next few years.

• In the McCleary decision, a unanimous supreme court held that we were not meeting our constitutional requirement to adequately fund our education system. Between now and 2018 we will need to come up with around $1.5 – $2 billion per year in new money to meet this requirement. This is equivalent to 1.5 to 2 additional points on the sales tax, or some other solution.
• Our population is aging rapidly, and the number of people eligible for Medicaid funded long-term care is exploding. We need to come up with a funding model that works – what we have today does not.
• Many people in my district are deeply concerned about our flagging investment in higher education.
  • Our children must have the ability to compete in the economy of the 21^st century, an economy with a huge premium on higher education.
  • Our economy needs talented, educated workers to make it go. We are no longer a timber and agricultural state – only 2% of the state’s economy is driven by the entire agriculture sector but 8% comes from Microsoft alone, and another 4% from Boeing.
  • We’re under federal court supervision for our lack of support for the foster care system. The outcomes here are terrible – only 3% of our foster kids complete college. We can (and should) do better.

There is some good news though – the federal Affordable Care Act will, we think, wind up about neutral on the state’s cost structure, but result in over 700,000 new people being insured. We don’t know how to model the impact this will have on the private healthcare system, but it’s hard to imagine that there won’t be less uncompensated care in emergency rooms and hospitals – this will result in significant savings to both the state and private hospitals and insurers, and consequently to all of you.

What’s Next on Budget?

In the final budget negotiations my Republican Senate negotiating partners didn’t ask for additional cuts (other than a symbolic cut to family planning funds that we didn’t do;) they asked for a handful of buy-backs that their members needed. There’s not much more room in the human services budget for additional structural reductions.

We are going to have to make some substantive changes in what we do, in how we raise revenue, and how we run the state. To keep Washington a great place to live we need to have a strong economy, but also a strong education system, a clean and safe environment so high-tech workers want to live here, and a functioning safety net. These decisions will be made in a tumultuous political environment that requires cooperation and negotiation.

I look forward to the discussion.

Contact Me

I love to hear from you about your issues, suggestions, or concerns. We can solve a lot of problems for people, direct you to resources, etc. During the time between legislative session my assistant Marilyn Pedersen and I have an office in Bellevue and it’s best to contact us there.

Olympia Office
312 John L. O’Brien building
Capitol Campus
Olympia, WA 98504
Phone: (360) 786-7936

Bellevue Office
16011 – 116^th Ave NE Suite 206
Bellevue, WA 98009
Phone: (425) 453-3064

Email: hunter.ross@leg.wa.gov

I maintain a web site at www.rosshunter.info

You can sign up for regular updates there, or join my Facebook empire.

“We have been negotiating in good faith practically every day of this special session,” said House Ways and Means Chair Ross Hunter (D-Medina). “We’ve taken significant steps toward the Republican position, and are still willing to discuss the final sticking points, but the time has come to act as well as talk.”

“We will also be placing a striking amendment to the budget on the bar Wednesday morning,” said House Majority Leader Pat Sullivan (D- Covington), “and we plan to take action on it later this week. The length of time it takes to pass a budget through both chambers means we have to begin moving things now.”

The list of bills includes:

• HB 2824: Initiative 728/Basic Education Study – Creates a joint task force to help the legislature meet the requirements of the McCleary decision and repeals I-728 in order to make revenues available for the implementation of basic education reform and for funding the reform recommendations of the task force.

• HB 2822: Working Capital Reserve – Modernizes the way the local government portion of the sales tax is handled.

• HB 2827: 2-year Balanced Budget and 4-year Outlook – Creates the statutory requirement that the current biennium budget be balanced and requires the Economic and Revenue Forecast Council to produce a 4-year outlook with clear assumptions.

• PSHB 2823: Revenue Consolidation – Directs the Solid Waste Tax to the operating budget in the current and next biennia, retains the Education Construction Account portion of the lottery funds in the operating budget until the 2015-17 biennium, directs increased liquor profits to the general fund, moves the Public Utility Tax and the Real Estate Excise Tax from the capital to the operating budget and transfers funds from the Public Works Assistance Account back to the capital budget.

• HB 2825: Pension Changes – Eliminates the early retirement factors granted in 2007 for new employees, and creates a study to look at potential options for front-line workers who face significant danger and physical requirements.

• HB 2829: K-12 Employee Health Benefits – Begins to reduce the disparity in employee premiums for family coverage compared to single premiums, improve transparency in school employee health information, and increase equity in access to benefits for all K-12 employees.

• HB 2828: Child Support Enforcement Requirements/Child Care – Corrects an oversight in SSB 6386 that made a change in one agency, but not in all the places it needed to.

• HB 2830: Interpreters – Adds clarifying language concerning the collective bargaining rights of language access providers.

• HB 2826: Community Supervision – Changes the state’s community supervision violation program, realigning resources to increase the use of evidence-based practices and building on the success of the King County pilot project.

Hunter’s committee will hold a public hearing on the bills Wednesday at 1:00 pm and they could be voted on by the House as early as Thursday.

“Not every one of these bills may pass,” he said. “But if we’re going to get a budget out by Easter, it’s time to find out.”

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After 15 years of design and analysis, this week we are launching visible construction on Lake Washington for the new SR 520 floating bridge. Join us at open houses Tuesday and Wednesday nights where we’ll present a full slate of information about:

• Construction plans and updates
• Newly released designs of the SR 520 floating bridge
• Seattle Community Design Process update
• Program sustainability plans
• Permitting update
• Our plans to minimize construction effects
• How you can be notified about construction-related activities

Meeting details

Medina
March 27, 2012 – 4:30 to 7:30 p.m.
Three Points Elementary School
7800 N.E. 28th St., Medina, WA 98039

Seattle
March 28, 2012 – 4:30 to 7:30 p.m.
Museum of History & Industry
2700 24th Ave. E., Seattle, WA 98112

Questions? Email WSDOT at sr520bridge@wsdot.wa.gov, or call them at 206-770-3500.

I have received a lot of calls and e-mails from people about the Film Credit bill (SB 5539), as we do with any expiring tax credit or preference. The film industry is important to the state’s economy and to both the Spokane and Seattle areas in particular. We obviously want to do everything we can to encourage growth, however the structure of this particular credit has some issues.

The credit works as follows:

• Companies get a 100% B&O tax credit for donations they make to a non-profit organization, reducing state tax revenues.
• The non-profit in question can then subsidize film and commercial productions for up to 1/3 of the cost of production for their film or commercial.

In essence, taxpayers in Washington are paying out of state companies to do work in Washington. It’s one thing to give someone a reduced tax rate, but in this case it is a direct subsidy of commercial work. In deciding if a tax break is doing its job you have to look at what your alternatives are for spending the money. We could provide a much cheaper tax incentive to a wide variety of industries, or we could use the money to educate children (employing teachers, for example). In comparison to other incentives, this one is very, very expensive for the benefits received.

Film production credits have been critiqued by both progressive and conservative leaning think tanks. The Tax Foundation (the people who bring you “tax freedom day”) found that most film production jobs are either temporary or imported from other states, noting “When evaluating job creation, legislators should acknowledge that some jobs might be destroyed in the creation of film production jobs.” (Page 8, http://www.taxfoundation.org/files/sr173.pdf )

Progressive leaning groups have also weighed in against film credits. The Center on Budget and Policy Priorities concluded “State film subsidies are a wasteful, ineffective, and unfair instrument of economic development. While they appear to be a “quick fix” that provides jobs and business to state residents with only a short lag, in reality they benefit mostly non-residents, especially well-paid non-resident film and TV professionals.” (Conclusion, http://www.cbpp.org/cms/index.cfm?fa=view&id=3326 )

Because of the unique nature of Washington’s B&O tax, very little tax revenue is paid to the state from Hollywood movie studios. In its 2010 review of the film production tax incentive, The Joint Legislative Audit and Review Committee found that from 2007-2009 the film industry generated $36 million in direct economic activity and $36 million in induced economic activity; however only $873,000 in sales tax revenue was generated during the same time period. (An effective sales tax rate of 1.14% compared to the state sales tax rate of 6.5%). Rental of equipment for film production also enjoys its own sales and use tax credit. (RCW 82.08.315)

In general, the Washington State constitution enjoins the state from directly subsidizing businesses. This credit uses a unique mechanism to get around this prohibition in law, but not in spirit.

The contentious issue in the bill is the ability for the city of Wenatchee to impose a 0.2% sales tax with just a vote of the council, not a vote of the people. The current bill allows this, and everyone testifying on the issue stated that it was crucial to the success of the endeavor that they be able to do this.

I’ve gotten a lot of mail from the Wenatchee area on the issue. Here’s the mail I’ve been sending out in response:

Thanks for your email on the Wenatchee situation and on SB 5984. You can track the progress of the bill by clicking this link.

I intend to move 5984 out of committee, ideally with no amendments. I believe it is a locally-generated, rational response to the slow-motion disaster in Wenatchee. Sometimes when you a see a train wreck about to happen there is nothing you can do, but in this case we can actually intervene and allow the region to solve its own problem. The Wenatchee area made (I believe) a poor decision on how to finance the Town Toyota Center, but now need to be able to take responsibility for it and resolve a problem that will otherwise waste millions on legal action.

In general I believe that local governments should be able to resolve their own problems, and I trust them to make reasonable decisions. They are more attuned to local needs and desires, and get unelected if they take actions contrary to local interests. Indeed, my favorite early nineteenth century Franco-American philosopher Alexis de Tocqueville says it well:

Local assemblies of the people constitute the strength of free nations. Municipal institutions are to liberty what primary schools are to science: they bring it within the people’s reach, and teach them how to use and enjoy it. A nation may establish a system of free government, but without the spirit of municipal institutions it cannot have the spirit of liberty.

– Alexis de Tocqueville

I agree, and believe that we should enable Wenatchee to solve its own problems acting through its locally elected representatives. This position is supported by local representatives, the local newspaper, the local chamber of commerce, and everyone else who testified on the bill.

Actually, we “found” about $87 million in the revenue forecast update and about $330 million in projections of less usage of state services over the remainder of the biennium. In addition to this there has been less utilization of services in the “TANF box,” which is what we call the bundle of services we administer for the federal government that provide temporary aid to needy families.

This significantly reduces the level of severity of the budget cuts we will be making, but does not eliminate them. We expect to introduce the first draft of the House budget proposal this week. I expect significant changes over the remaining weeks of the session, but am hopeful (and on-schedule) to finish by March 8th, the official end of the session this year.

The Education committee, which heard the bill first, amended it to eliminate the required state assessment of writing skills, and consequently the graduation requirement that students must have proficiency in writing. I am very uncomfortable with this decision, as were a number of other members of the committee during the hearing. We assess core graduation requirements because we believe that what is measured is taught. We should not carry this too far, and many skills are best assessed in the classroom, but we assess core requirements to ensure that students have the opportunity to learn them.

Writing is one of the key elements of the four core learnging goals established in House Bill 1209 over a generation ago (in 1993), the bill that was the foundation of our work on the Basic Education Financing Task Force, and the core of the McCleary decision last month. Almost every single occupation that will provide a living wage for today’s students requires a level of communication skills that would have been difficult for someone even 20 years ago to imagine we should require, and the original 1209 was somewhat prescient.

We do a disservice to young people by not requiring that they do the work necessary to succeed in not just today’s, but tomorrow’s economy. In 1993, HB 1209 stated:

The goal of the Basic Education Act for the schools of the state of Washington set forth in this chapter shall be to provide students with the opportunity to become responsible citizens, to contribute to their own economic well-being and to that of their families and communities, and to enjoy productive and satisfying lives. To these ends, the goals of each school district, with the involvement of parents and community members, shall be to provide opportunities for all students to develop the knowledge and skills essential to:

(1) Read with comprehension, write with skill, and communicate effectively and responsibly in a variety of ways and settings;

(2) Know and apply the core concepts and principles of mathematics; social, physical, and life sciences; civics and history; geography; arts; and health and fitness;

(3) Think analytically, logically, and creatively, and to integrate experience and knowledge to form reasoned judgments and solve problems; and

(4) Understand the importance of work and how performance, effort, and decisions directly affect future career and educational opportunities.