Archives for April 2009

The Seattle Times editorial board is at it again:

In unemployment pay, Washington is not a cheap state, nor is either side — labor and business — proposing to make it one. It has the fifth-highest unemployment benefit among the states and the sixth-highest level of taxes.

Really?  WA has the sixth-highest level of taxes?  According to whom, and by what measure?

According to the conservative Tax Foundation, Washington’s state and local tax burden ranked 35th as a percentage of personal income in 2008, dead even with Mississippi, while WA’s own Department of Revenue had us ranked 28th in 2006.  Both the Tax Foundation and the state DOR pull their numbers from the US Census Bureau.  Furthermore, the Tax Foundation ranks WA as having the 12th best “business tax climate” in the nation.

So where does the Times get its number that ranks WA with the sixth-highest level of taxes?  They don’t tell you, but I’m pretty sure the only math that could get us anywhere near that high would be to calculate total state, local and federal taxes per capita, a bullshit number for comparative purposes that even then they’d still have to fudge.

On average, Washington is not a high tax state.  It’s simply not.  And if the Times is going to insist on making that assertion, even in passing, they have an ethical obligation to back it up with real numbers.

Usually one can get some sense from a news article who is full of it and who has a legitimate point. But this Oregonian article about the economic wreckage caused by the Bank of Clark County failure leaves me scratching my head about what the truth actually might be.

While the U.S. Treasury funnels billions to Wall Street in the name of economic stimulus, its sister agency, the FDIC, is forcing some solid, local businesses into a damaging limbo.

Since taking over the failed Bank of Clark County in January, the Federal Deposit Insurance Corp. has frozen borrowers’ lines of credit and declared active loans in default, demanding immediate repayment. And in some cases, it has denied borrowers access to thousands of dollars of their own money locked in Bank of Clark County accounts, former customers claim.

But the FDIC insists it is flexible and responsive:

FDIC officials were vehement that they are sympathetic to the plight of the borrowers and highly flexible to their needs.

“If the loans are performing, the terms and conditions of those loans remain intact,” said Ron Bieker, deputy director of the FDIC’s department of resolutions and receivership. The FDIC will happily extend a line of credit, he said, as long as a borrower qualifies and provides updated financials and an appraisal of their collateral.

“We’re very sensitive to these issues,” he said.

It does sound like some business owners may have been caught in a nightmare if they weren’t fortunate enough to have been tipped off about troubles at the bank, as many well-connected bidness guys and gals were. Their frustration is certainly understandable, although nobody seems to be placing much blame with the directors and management of Bank of Clark County, who were an elite group of Clark County’s best business minds.

If you read the full article, another thing worth noting is that it sounds like the credit markets are still not performing very well down in the trenches, as these businesses can’t seem to get loans for legitimate business needs. So we’ve spent trillions on the big institutions and the little folks still can’t get credit.

Long term, this sad episode points out the need for sound regulation of financial institutions. Short term, maybe a Congress-critter or two could take a look at these complaints and, if warranted, see what can be done to ease the situation. Sure, in hindsight people would have been better off not doing business with Bank of Clark County, which was basically a pet project of the developers and the local movers ‘n shakers, but honest business folks can’t really be faulted for doing business with an FDIC insured institution.

The damage to the local economy needs to be mitigated somehow. It doesn’t make sense to lose more jobs over this.

Ack.

Washington is falling behind other states when it comes to competing for aerospace business, a new study finds.

The study, conducted by Deloitte Consulting and obtained by local analyst Scott Hamilton with Leeham Co., was funded by the state of Washington.

David Groves of the Washington State Labor Council responds in an email sent out today:

As for the Deloitte “report” itself, in my cursory initial review, I already see that it uses the identical legislative talking points used by Boeing and business lobbying groups to try to lower their taxes (although I missed any mention of WA’s $3.2 billion tax break they already got). On Page 20, Deloitte’s report recommends that Washington “align workers’ compensation benefit levels (and thus cost to employers) with competing states.” The important thing to note here is the specific reference to benefits, as opposed to actual employer costs. There is a reason they — and business lobbyists in Olympia — write it this way.

The truth is that the latest objective state-by-state comparison of workers’ compensation systems — the only one of its kind that we know of — conducted by the Oregon Department of Consumer and Business Services, recently ranked Washington 38th in terms of costs (that’s 14th lowest, including D.C.) Yes, the benefits are comparatively higher, but our state-run system is considered a national model for its low-cost, high-benefit efficiency. Many of those “low labor cost” Southern states we compete with have privatized workers’ comp systems, which introduces profit into the equation and raises costs. The Oregon study found that our aerospace competitors in South Carolina (13th highest costs), Texas (17th) and North Carolina (22nd) all have MORE EXPENSIVE workers’ comp systems than Washington’s. So now Deloitte is recommending that Washington cut benefits to injured workers to make us more “competitive” and drop employer costs even more?

Meanwhile Joe Turner dubs a new subcabinet position the state “Department of Boeing.” Hey. The governor practically tripped rushing to the podium to mollify Boeing. You know, it’s fine that Boeing is at the table, and given due consideration, but the tractability by the governor is rather startling. We thought we were supporting a Democrat, when we were in fact supporting a Dreamliner of a politician.

[youtube]http://www.youtube.com/watch?v=JN99jshaQbY[/youtube]

It’s pretty clear that, taken as a whole, the Democratic Party is a captive of corporate interests, which to anyone who has been paying attention the last twenty years is no surprise. The Legislators in power are products of the Clinton era and honed their survival skills on triangulation and seeking the approval of traditional media. The corporate lobbyists threaten to take away jobs, the traditional media issues harrumphs, and most of the Democrats fall in line. Rinse, repeat.

What’s amazing is the sheer tone deaf attitude leadership has for relatively modest requests regarding workplace, environmental and consumer initiatives. If we’re going to continue to worship at the neo-liberal altar, sanding a few rough edges off doesn’t seem unreasonable, unless you’re the Washington Legislature. Anything that might upset editorial boards or business groups is to be hamstrung, delayed, obfuscated and finally discarded.

They play a bunch of games in Olympia, changing the faces and who takes the blame, but if you were hoping for workplace privacy, clean power, continued voter-approved teacher pay or homeowner warranties, you can suck eggs. Our local school districts are going to be savaged, and the Big Three are expecting we will once again fall in line and beg voters to vote for regressive taxes to save K-12 and/or the sick.

This game has been going on for a while. Every year progressive legislation gets sabotaged and we get a bunch of promises and lip service. At some point the excuses no longer bear up under scrutiny.

Fine. It’s not that long until 2010, and it’s even shorter until this November. Let’s see that tax increase on the ballot and let’s see the plaintive cries about saving the wee kiddies from the horrors of overcrowded classrooms. Maybe we could have fought that fight together.

Honestly, now, I’m not so sure.

State budgets have come out in the House and Senate, and the word “brutal” comes to mind. Goldy wants an income tax. Does that make him crazy? Are there good alternatives in the face of a state revenue collapse? Will someone show leadership on the issue? And how long will it take voters to warm-up to the idea?

Wait…wasn’t that Mike!™ McGavick’s shtick? Senators Murray and Cantwell vote to slash the estate tax. What the hell were they thinking? Same-sex marriage Marriage equality gets a huge boost with a ruling in Iowa, and votes in Vermont and Washington D.C. How long will it take here in Washington state? Finally, the panel peeks at the rave reviews from the Barack Obama World Tour.

Goldy was joined by Seattlepi.com’s Joel Connelly, Peace Tree Farm’s N in Seattle, Effin’ Unsound’s & Horsesass’s Carl Ballard, and Executive Director of the Northwest Progressive Institute Andrew Villeneuve

The show is 42:19, and is available here as an MP3:

[audio:http://www.podcastingliberally.com/podcasts/podcasting_liberally_apr_7_2009.mp3]

[Recorded live at the Seattle chapter of Drinking Liberally. Special thanks to Confab creators Gavin and Richard for hosting the Podcasting Liberally site.]

Over on their editorial board blog, the Seattle Times’ Bruce Ramsey calls me out for calling out Susan Hutchison for her connections to the Discovery Institute and their Christianist, anti-science campaign to foist so-called Intelligent Design theory on unsuspecting school children.

Oh, come on. I don’t buy the argument from design, and once compared it to the fabulist Erich von Daniken. But Discovery does lots of things, from stuff on Russia to passenger trains. Discovery was the initial backer of the bored tunnel to replace the Alaskan Way Viaduct—an idea now endorsed by Ron Sims, Greg Nickels and Christine Gregoire. Funny how our progressive pundits missed the chance to make fun of that idea by talking about Intelligent Design.

Oh Bruce… why are you always picking on me?  When have I ever said an unkind word about your publication?

But if you’re gonna pick on me, the least you could do is pick your spots a little more carefully, for I’m pretty sure I’ve never missed a chance to make fun of Discovery by talking about Intelligent Design.  Indeed back in December of 2007, when the deep bored tunnel idea was first raised, I ridiculed Discovery in a post titled “Intelligent Transportation Design,” writing:

[T]he folks at the Discovery Institute are a bunch of fanaticist nutcases “visionaries”… you know, if by “visionary” you mean promoting Intelligent Design, seeking to overthrow the scientific method and “replace it with a science consonant with Christian and theistic convictions,” …

And then again a year later, in a similarly named post, I once again honed in on the cavemen riding dinosaurs meme, musing:

Yeah, but then again, these are folks who don’t believe in evolution, so forgive me for taking their claimed scientific and technical expertise with a grain of salt.

There are a lotta things you can tar me with Bruce, but being inconsistent ain’t one of ’em.

And as for your main premise:

There are two obvious questions that matter about Susan Hutchison as King County Executive. One is whether her career as a TV news anchor and in arts fundraising qualifies her to be CEO of the largest county government in Washington, which is involved in police, courts, jails, land-use control, public health and elections. The other is how Hutchison would use the power the county executive actually has. Focus on these, and give us all a rest regarding the Discovery Institute.

Well, forgive the over-the-top forced metaphor, but I’d say that arguing that Hutchison’s association with Intelligent Design has no bearing on her fitness for office is kinda like considering Mussolini to head Sound Transit, and insisting the only thing that really matters is whether he has the proven ability to make the trains run on time.

Of course Discovery is a valid issue in this campaign, as are Hutchison’s self-identification as a conservative Republican.  These are issues and labels which help inform us about Hutchison’s values, and whether she shares those of the majority of King County voters.  Given her background, Hutchison should be forced to answer whether she accepts evolution as valid science, and whether she believes Intelligent Design or other “alternative theories” should be taught in the schools.  Surely, Bruce, you’re not arguing that voters would be better served by having less information about their candidates?

As I stated yesterday, the bulk of the invitations for Hutchison to sit on boards came from her role controlling Charles Simonyi’s vast checkbook, but her position at Discovery, and the conservative Christian organization Young Life were different.  These were board positions Hutchison sought out, presumably because their agendas were consistent with her own personal beliefs.  Good for her.  People should act on their principles.

And people’s principles should be issues in political campaigns.

[youtube]http://www.youtube.com/watch?v=8ZaGks5LkkI[/youtube]

If there were meaningful truth in advertising laws, these “real people” would say “I’m a shitty, no-talent actor willing to work for hate merchants because I have no self-respect.”

On the other hand, I am a real Washington state parent successfully teaching my children that political advertising is usually deceptive, and that basic human rights are not optional. You don’t even have to be very old to see through this stuff. A storm, oh, for crying out loud.

But, please, please, please, someone comment that we must be “civil” towards the hate merchants, because if we’re not civil to the hate merchants, then we’re the haters. Because pointing out ridiculous bigotry is exactly like being Hitler and Pol Pot, you know.

(Props to AMERICAblog.)

Here are some news updates and other links:

– Prosecutors in Kitsap County have dropped charges against Glenn Musgrove, the 56-year-old quadriplegic and medical marijuana patient who the WestNET drug task force initially claimed was selling marijuana for profit. Musgrove won a large settlement for a medical malpractice suit and his attorney believes that Kitsap County went after him in order to get their hands on some of that money. His two caregivers were also facing prosecution, but those charges have also been dropped. It appears that the acquittal of Bruce Olson and the increased media attention on Kitsap Prosecutor Russ Hauge’s behavior is finally starting to yield some positive outcomes. Unfortunately, situations like this are not isolated to Kitsap County. The Cannabis Defense Coalition is also looking into cases in Mason and Pierce Counties as well.

– Glenn Greenwald’s report for the Cato Institute on drug decriminalization in Portugal can be read here. He adds in this post at his regular Salon blog that we’re at the point now that even longtime skeptics of decriminalization are being forced to admit that it works to decrease both drug abuse and its collateral effects. Although there are still some entertainingly obstinate holdouts.

– Washington State’s Senate Democrats have created an online forum similar to the one that the Obama Administration set up for their virtual town hall. I’ve posted a question about regulating and taxing marijuana.

– I’m a bit more pessimistic than Pete Guither here that Attorney General Holder really is on the verge of a spectacularly boneheaded attempt to arrest even more people for simple marijuana possession. At all levels of government, we already arrest around 3/4 of a million people every year for marijuana possession. If Holder actually thinks that increasing those arrest totals will lower the amount of money being made by Mexican cartels, he needs to sit down and read Greenwald’s report on Portugal.

– Finally, the Injustice in Seattle blog is a good local blog that’s flown under my radar for a little while now. I need to get them in my regular reading rotation. I’m not on the Twitter bandwagon yet, but if you are, they have a feed.

As Goldy noted earlier this morning, a “temporary” sales tax increase of about one-third of a cent is an idea that is gaining traction in Olympia. The money would be used for health care. The problem, of course, isn’t the small increase or the laudable goal of providing health care, it’s the already ridiculously high sales tax rate we pay because of our stupid, broken tax system.

Jeff Mapes at The Oregonian also noticed the proposal and casts a hopeful eye northward on behalf of struggling Oregon retailers, speculating that a Clark County sales tax rate of 8.5% or more would cause even more residents of Southwest Washington to shop across the river.

Perhaps more relevant for us in the Portland area, the rate in Vancouver is now 8.2 cents on the dollar. So you can do the math on what you save buying one of those $1,000 flat-screen TVs in Oregon – that is, if anyone is in a mood to buy one of those things now.

Clark County has always born the brunt of Washington’s stupid, broken tax system. With no income tax, and thus no way to reciprocate with Oregon on income taxes, Oregon reaps a financial windfall from workers who live in Washington. As Clark County has grown over the years, not only do Washington and Clark County lose millions in revenue each year to “leakage,” jobs take a hit as well.

Personally, I don’t like the idea of a “millionaire-only” income tax. It will be spun as a punitive, soak-the-rich scheme. At least one rich asshole would publicly threaten to move out of the state, causing lots of middle class conservative assholes, clinging to their adolescent Ayn Rand fantasies, to screech about socialism some more. It’s just not worth it.

What I would propose is a “simple progressive income tax,” with say three basic tax rates. Those at or near the poverty line would pay little or nothing, and as income goes up, so does the percentage rate.

While most people hate taxes, what they truly despise is the complexity of the federal income tax system. One reason Steve Forbes and others got so much mileage out of a flat tax was that people loved the idea of filling out their income taxes on a postcard.

You could do the same thing with a graduated income tax, if, and this is a big if, you could somehow prevent Legislators and lobbyists from creating an endless number of deductions, tax credits and loopholes. (Yes, it would be like taking heroin from addicts, but a fellow can dream.)

Citizens should be able to just take their adjusted gross income from their federal taxes and pay a simple percentage rate. It really would fit on one page.

And then the other thing would be to somehow Constitutionally limit the maximum rate of sales tax, because the cynics of the world usually insist that if we allow an income tax, the sales tax will never go down. Solving that problem would be key.

Now that I’ve laid this out so simply, I expect policy experts to design and implement it in short order.

Washington state’s business, media and political establishment are often breathtaking in their lack of boldness, so I guess it should come as no surprise that, faced with a nearly unprecedented economic and budgetary crisis that has finally ripped the mask off our decades-old structural revenue deficit, the few calls for real change are being shouted down with deafening cries of “No we can’t!”

Take for example today’s Seattle Times editorial endorsing a 30% tuition increase over two years to help offset dramatic funding cuts.  Yes, I agree that tuition “should rise significantly to preserve student access, quality and years of progress toward preparing a sophisticated work force,” and without a doubt, these “whopper tuition increases” are somewhat mitigated by the fact that our state schools are an absolute “bargain compared with peer institutions.”  And it’s hard to argue against the notion that, as painful as it might be, given the size of the impending funding cuts, “it would be much worse without the tuition jump.”

But nowhere in the editorial did the Times mention anything about financial aid.  Not once.

And then there’s the news today that a temporary sales tax increase is once again gaining traction, a week after dreadful polling convinced most lawmakers that such a ballot measure would be virtually dead on arrival.  The solution?  No, our special Olympians aren’t rallying around an innovative high-earners income tax (which actually polls well), but instead, are coming back with a smaller, third of a cent sales tax increase proposal in the hope that voters might reluctantly swallow this less painful pill.

You know, conventional wisdom says that an income tax is a nonstarter, whatever fairness or simple math or recent polling says, so why even bother to go there?

The problem is, both these solutions, the tuition and the sales tax hikes, are half-measures that may make the budget easier to balance in the short term, but do absolutely nothing to address our long term problems.  And both solutions place their financial burden solely on the backs of those who can least afford it.  Both solutions, on their own, only make our revenue system less fair and less stable, and in the long run, will only serve to undermine working class Washingtonians’ faith in the ability of our state government to adequately meet their needs.

Increase tuition and fees by $3000 a year, and our schools will still remain a bargain compared to “peer institutions,” but without a commensurate increase in financial aid, many of our state’s low and middle income students will be priced out of an opportunity to attend a four-year university.  And if voters cooperate and agree to temporarily raise the sales tax a mere third of a cent on the dollar, we’ll save some crucial health care services now… only to watch them trickle away over time once the increase sunsets and the steady erosion of our state government’s purchasing power continues unabated.

Now, in this time of crisis, we have the opportunity to ask voters to grit their teeth and join us in embracing real change… and all we seem to get out of our so-called leaders are half measures.

Well, personally, I’m tired of half-measures, and morally conflicted about continuing to join the current Democratic establishment in fighting half the battle, when it has become increasingly apparent that they will never fulfill their promise to join me in fighting the other half.  Long term revenue adequacy can never be achieved without tax fairness, and the refusal (with few notable exceptions) to publicly acknowledge this simple truth, undermines our ability to achieve either.

From the Department of Irony:

Microsoft was told by a federal jury to pay $388 million to a Singapore company for infringing a patented invention used to deter software piracy.

The jury in Providence, R.I., deliberated less than two days before finding Wednesday that Microsoft violated a patent owned by Uniloc Singapore Private and Uniloc USA. Uniloc claimed Microsoft wrongfully used its security technology to earn billions of dollars.

Though my understanding is that Microsoft has taken Uniloc’s president hostage in an effort to negotiate a more favorable settlement.

For the second year in a row the Washington Post’s Chris Cillizza has named HA to his list of best state political blogs.  A big thanks to you loyal readers who apparently lobbied on our behalf.

Washington

Horses Ass
Strange Bedfellows (Seattle Post Intelligencer)
Politics Northwest (Seattle Times)
The Petri Dish (Everett Herald)
Political Buzz (Tacoma News Tribune)
Northwest Progressive Institute Advocate

You’ll notice HA is listed in bold, at the top of the list.  According to Cillizza:

In a state where one blog was far and away the most recommended by Fix readers, we have noted it by bolding the name of the blog.

Eat my dust, newspaper blogs!

But considering all the guff I get about the unserious name of my blog (yes, I’m talking to you John Carlson), I’m perhaps most proud of making a second, even more exclusive list:

The best named blogs on the list: Doc’s Political Parlor & Lawn Mower Repair (Ala.), Rum, Romanism, Rebellion (Ariz.), My Left Nutmeg (Conn.), The Old River Road (La.), Writes Like She Talks (Ohio), Not Larry Sabato (Va.) and Horses Ass (Wash.)

A horse’s ass by any other name would smell as… well… you get the point.

[youtube]http://www.youtube.com/watch?v=lihLdXHx8jM[/youtube]

In print, budget battles are all about numbers, but in real life they’re actually about people.  The ad above, funded by a coalition of hospitals, clinics and health care unions, makes that point very well.

I’m told this ad will be running in fairly heavy rotation, and I’ve got a sneaking suspicion it’s just the opening salvo.

I’ve been admittedly obsessed over the past couple weeks with making the argument for a high-earner’s income tax, but the other policy issue I’ve been advocating this session also appears to be gaining a little traction: a move toward a high tuition/high financial aid model that could raise additional funds for higher education, while increasing access and decreasing costs to students from lower and middle income families.

A few weeks ago Rep. Reuven Carlyle (D-36) staked his own credibility to the concept in a guest column in the Seattle Times, and just last week, the even the Times editorial board wrote in favor of raising tuition and financial aid.  And today, coming on the heels of Gov. Gregoire’s proposal to let tuition rise 28% over two years, none other than University of Washington President Mark Emmert, writing in his own guest column in the Times, argues that if we are going to keep the “higher” in higher education, colleges and universities need more “flexibility on tuition.”

The leaders of our four-year colleges and universities understand that our schools must take cuts. But we also know that we can keep students coming to school and graduating on time if we are simply given more flexibility on tuition. We can help our students and our state without new state money. Moreover, we can fix much of this problem without denying access to students because of their income or family background.

The UW has the lowest tuition of any of its peers and is one of the best bargains in the country. With increased financial aid and the expanded federal tax credit, we can remain an excellent value for our families, maintain our world-class quality, and not slash the number of students we admit.

To give higher education the opportunity to resolve this crisis without requiring more state money is the only responsible thing to do. To do otherwise is to deny thousands of our citizens a chance to succeed in the knowledge economy.

Huh.  Guess the idea doesn’t sound so wing-nutty after all, when it’s coming from the mouth of Emmert.

So how does it work?  How can we possibly raise tuition while maintaining access and affordability to lower and middle income students?  Well, as I’ve explained before, it’s simple math:

Let’s say you’re a low to middle income student currently receiving financial aid in the form of $3,000 in grants, and the UW suddenly jacks up its $6,800/year in tuition and fees to $17,800.  Now let’s say the UW (ie, the state) increases your grant by another $11,000 to offset the hike.  How much extra money did this cost the state?  Zilch.  You were paying $3,800/year and you’re still paying $3,800.  It’s a zero sum game.

But if you’re a student from a wealthy family, who does not need financial aid, and thus does not qualify for it, you’re suddenly paying an extra $11,000 into the system… money that can be spent to increase the quality of education at the UW, or expand the number of seats, or even lower the costs for truly needy students.

The key of course is to increase financial aid commensurate to the needs of the students, both the dollar amount, and the upper range of incomes that qualify for aid.  The goal should be to accept students based solely on merit, and to charge them for their education according to their ability to pay.  That, in my opinion, is the best way to extend opportunity to all of our state’s young people.

Or, you know, we could continue with what we do now, where wealthy families who have easily afforded years of $23,420 annual tuition at Seattle’s exclusive Bush School, send their kids on to the UW at the same $6,800 bargain rate as everybody else, at the same time the university is being forced to slash classes and slots. Does that really make sense?

I know, I know… Washington voters overwhelmingly rejected an income tax 35 years ago.  But before timid lawmakers brush aside proposals to put a high-earners income tax on the ballot, they might want to look at some more recent polling data:

Almost three-quarters of Americans think it is a good idea to raise taxes on people making more than $250,000 per year, according to the latest CBS News/New York Times poll.

In fact, two-thirds of Americans think the tax code should be changed so that middle-class Americans pay less than they do now, while “upper income” people pay more.

That’s right, 74-percent of Americans support raising taxes on the wealthy.  74-friggin’-percent! So somebody please explain to me why now isn’t the perfect political climate to put a millionaires tax on the ballot?