Goldy

It’s really, really complicated. The impact, the morality, the unintended economic incentives… everything about a “tip credit” (or “tip penalty” as opponents call it) is a lot more complicated than our current minimum wage debate allows.

Which is a long way of saying that I’m not finished writing the post on the tip credit that I had previously promised. In the meanwhile, I’d be interested in hearing your thoughts on it in the comment thread.

Sorry if you’re seeing those annoying 508 errors again. I’ve been messing around under the hood trying to optimize site performance and add some nifty new features, and while everything was working fine yesterday, I awoke this morning to find HA struggling to load pages. So I’m dialing some of the updates back in the hope restoring some equilibrium.

In any case, if you see new features that you like, let me know. If you discover bugs, really let me know. And if there’s some change you are aching for, I’d love to get your suggestions and feedback.

I haven’t had much to say on the disappearance of Malaysia Airlines Flight 370, because I’ve got no particular aerospace expertise and thus had nothing useful to add to the speculation. But I do know something about modern telecommunications, and so all this talk about attempting to track the plane via pings and other automated transmissions to various satellite and ground-based receivers, got me thinking: in this day of on-board WiFI Internet connections, why are we still relying  solely on an aircraft’s “black box” for a record of its final minutes or hours?

This instrument data is simply too important to be left at the bottom of a deep-sea trench, so why isn’t it constantly being transmitted real time via satellite as a kind of off-site backup? Cockpit voice recordings too. All of it compressed and securely encrypted. With no means of turning off the transmission. The technology is there. The satellites are there. Isn’t this a totally obvious solution?

Am I missing something here? Are there any experts out there who can explain why we don’t already do this?

It wouldn’t take much more than the whim of federal and international regulators to mandate this virtual black box on all modern jetliners. And given the low cost of telecommunications technology, it wouldn’t add much to the cost of flying. But it would provide closure for the families of victims of future crashes, as well as valuable data on how to prevent a repeat.

[Oddly, some of my more popular posts over at Slog were about my backyard garden, a stark departure from my wonky policy analysis and foul-mouthed political rants. So I’ve decided to continue these posts here on HA.]

I spent the past few days of fair weather belatedly getting the last of my early spring sowings into the garden before the rains returned. Snap peas, snow peas, carrots, and a variety of lettuces, greens, and herbs have been sown under floating row covers in freshly turned and composted beds. Radishes, arugula, and at least one variety of lettuce have already sprouted. Potatoes have been buried in compost in separate containers. And 20 feet of onion starts are beginning to take root—I’ll start thinning out salad onions in another month so. (I’ve had much better luck with the Walla Walla onion starts that McLendon’s carries than I ever have with sowing directly from seed or from bulbs.)

In case you’re wondering about the floating row covers, they serve dual purposes. These thin yet sturdy pieces of remay fabric let through light, air, and water, yet are light enough to be lifted by the growing seedlings. The result is that they function as a sort of green house, warming and insulating the soil, while keeping out pests. But the row covers are also necessary to protect the beds from cats, squirrels, and other animals that just love to dig through freshly turned soil. Without the row covers the loose soil beckons like a giant kitty litter box. Once the seedlings are well established and the soil crusts over a bit, the cats tend to lose interest.

So I’ve found floating row covers to be an absolute must.

As for what I’m currently eating from my garden, well, not much survived the couple of extended hard freezes we had this winter. I’ve got kale, of course, and in addition to the leaves, the tender stems and flower buds are delicious in stir-fries or sautéed with garlic and tossed with pasta. I’ve still got a few leeks left to harvest, and the over-wintered parsley is coming back nicely and should stock my kitchen until its newly sown replacement matures. Other than that, it’s just perennial herbs—rosemary, oregano, sage, and thyme—plus a few scattered chives.

But next week no doubt I’ll be adding radish and arugula thinnings to my salads, and the 2014 garden season will officially begin.

Mayor Ed Murray’s Income Inequality Advisory Committee has released the two studies it commissioned on proposals to raise the minimum wage in Seattle to $15 an hour. I’ve only just skimmed through them—there’s a ton of data and analysis—but I thought it useful to skip straight to the conclusion of the report from three professors at UC Berkeley, Local Minimum Wage Laws: Impacts on Workers, Families, and Businesses:

In 1994 David Card and Alan Krueger published a groundbreaking study that changed how many economists view the minimum wage. Card and Krueger (1994) looked at employment in fast- food restaurants across the New Jersey and Pennsylvania border after New Jersey increased its state minimum wage. They found no measurable negative impact on employment. As we reviewed above, a large body of research has since built upon their methodology. As a result, we have learned a great deal about how employers respond to increases in the minimum wage.

First, paying workers more can change their work performance. It can change their productivity, their attitude about their job, how hard they work, and their ability to make it to the job on time. Second, low-wage labor markets have high levels of job churning. Turnover levels are high as workers leave jobs looking for better wages or because they are unable to stay in their jobs due to poverty-related problems such as difficulties with transportation, child care, or health. As a result, rather than eliminating jobs, raising the minimum wages can reduce turnover and increase job stability. Third, firms can absorb higher labor costs through other means as well. They can pass on some of the increased costs to consumers through higher prices or earn lower profits. In short, firms use a combination of strategies to adjust to higher minimum wages without cutting jobs or hours (Schmitt 2013).

Nonetheless, it is important to emphasize again that the existing research literature is necessarily limited to the range of minimum wage increases that have been actually been implemented. While these studies are suggestive, they cannot tell us what might occur when minimum wages are increased significantly beyond existing local, state, or federal mandates.

Finally, raising the minimum wage is not a cure-all, especially in the face of larger forces generating inequality that require national attention. Still, our assessment of the research evidence is that these policies have worked well. They raise the incomes of low-wage workers and their families. The costs to businesses are absorbed largely by reduced turnover costs and by small price increases among restaurants. Additional benefits, such as reduced spending on public assistance programs and the local stimulus of additional spending by low-income families, might also occur. But we do not yet have enough definitive research on these effects.

Seattle’s business community insists that raising the minimum wage to $15 an hour will result in the loss of hundreds of businesses and thousands of jobs. That’s what opponents claim before every proposed minimum wage hike. Yet according to the UC Berkeley report, there is no evidence that this ever happens.

Yes, the proposed Seattle hike is larger than most others (though not unprecedented), so no, we cannot know for sure that a hike to $15 won’t have a negative impact on businesses or employment. But the point is, there is nothing to suggest that it would. And so the burden of proof is on opponents to support their arguments with more than just the anecdotal empty threats of business owners who are loathe to abandon the low-wage economy to which they’ve grown accustomed.

Huh. I’ve got this nagging feeling that there’s something missing from the Seattle Times editorial board’s list of things we need to do to attract and retain corporate headquarters:

Support and fund education for students ages 3 to 23. Raise the quality of and reduce inequity of access to pre-K, K-12 and higher education. Protect and enhance the area’s vaunted quality of life and make strategic investments in transportation. Continue to promote a civic culture that values innovation, diversity and tolerance.

Oh. Yeah, that’s right. They forgot to mention the money it takes to pay for all these great things.

It doesn’t take much courage to argue for expanded funding of pre-K, K-12, higher education, transportation, and other public investments that improve our collective quality of life. I do it all the time. But what’s consistently missing from the editorial page of our state’s paper of record is support for raising the taxes necessary to pay for these things. It’s as if there is only one side to the financial ledger—the spending side—and it would be absolutely crazy to even mention the topic of revenue.

I mean, if attracting corporate headquarters provides the strange logic you need to put you over the top in support of universal preschool, fine by me. Whatever floats your pre-K boat. But then what’s so wrong about taxing the incomes of highly paid executives in order to help pay for all the public investments that draw them to the region? Washington does have the most regressive tax structure in the nation, after all.

Without the mention of revenue, the editorial comes off as scolding the rest of us for stingily refusing to invest in the things corporate executives refuse to pay for. Weird.

Leviticus 25:44-45
And as for your male and female slaves whom you may have—from the nations that are around you, from them you may buy male and female slaves. Moreover you may buy the children of the strangers who dwell among you, and their families who are with you, which they beget in your land; and they shall become your property.

Discuss.

Seattle’s Tim-Eyman-wannabe Elizabeth Campbell, has filed an initiative that would repeal recently imposed caps on popular Transportation Network Companies (TNCs) like Lyft, Sidecar, and uberX. Initiative 111 (pdf) would also eliminate the $50,000 annual license fee per TNC that was intended to fund enforcement of the remaining regulations, while removing any reference to “the stability of the market for taxi and for hire transportations services” from consideration for subsequent regulatory review. If passed, the initiative would pretty much gut the work of the city council, freeing up the TNCs to operate at will and virtually unrestricted, while leaving the taxi industry capped and heavily regulated. So much for the “level playing field” the TNCs have been clamoring for.

Of course, Campbell is a bit of a self-serving pro-business crackpot with a habit of filing initiatives on spec and then hoping the corporate contributions roll in. She’s already filed a faux $15 minimum wage initiative that would not in fact raise the minimum wage to $15 for most workers, while lavishing tax cuts on business. No contributions thus far. So it’s not clear whether Lyft, Sidecar, and Uber were even aware of this initiative before it was filed, let alone whether they would lend it financial support.

That said, my sense is that a well-crafted initiative lifting the caps on the popular TNCs could very well pass. Everybody loves to hate on the taxis. So it wouldn’t surprise me to see the TNCs fund such an initiative, if not this particular one.

I’ve emailed Campbell and other parties for comment. I’ll update when I know more.

Great news!

According to a poll released Thursday by PEMCO Insurance, more than half of area drivers — 58 percent, to be exact — say that if a toll is put into place across Lake Washington on I-90, they will drive across the bridge less often. … A toll would propel 28 percent of drivers to choose greener commuting options, such as taking the bus, carpooling, or telecommuting.

Then, with consumers unwilling to drive across the lake to save 20 cents on a burger, we can raise the minimum wage even higher in Seattle. Because location, location, location!

God forbid we should be willing to pay for the public infrastructure we use, and all that, but if tolling I-90 not only helps eliminate unnecessary trips (and the climate-changing carbon emissions that go with them), it also helps support a more livable minimum wage here in Seattle, then I’d call that a win-win!

King County voters will soon receive their ballots for an April 22 special election in which they will be asked to approve or reject Proposition 1, a $130 million hike in local car tabs and sales tax. At stake is an additional $50 million a year desperately needed to maintain county and city roads, along with the $80 million a year Metro needs to stave off a devastatingly regressive 17 percent cut in bus service. So of course the Seattle Times chooses to kick off its coverage of this very important issue with a front page article featuring the views of the one organization opposing Prop 1!

An early face-to-face over King County’s proposed car-tab-and-sales-tax measure to fund transit and roads took place in front of one of the few organizations opposing the measure, the pro-highway Eastside Transportation Association (ETA).

… [ETA member Dick] Paylor and audience members complained about how Metro King County Transit is managed, voiced concerns about seeing some virtually empty buses on some routes and suggested having bus passengers themselves pick up a larger share of the service’s costs.

“The problem isn’t on the revenue side, it’s on the expense-control side,” said Paylor, arguing that Metro is operating under a “broken financial model.”

Jesus. ETA is just a who’s-who of old, pro-roads white guys (like the bitterly anti-transit Jim Horn), while the Yes side is a coalition of business, labor, transportation, environmental, and social service groups that enjoys endorsements from 19 mayors. So this is the equivalent of kicking off your climate change coverage by talking to the owners of a coal-fired power plant!

And of course, Paylor is totally wrong. The remaining problem is almost entirely on the revenue side of the equation. Through 2014, Metro will collect $1.2 billion less in sales tax revenue than previously projected, thanks to the Great Recession. Meanwhile, through a series of cuts, efficiencies, and fare hikes, Metro has lowered expenses or increased revenue by $148 million a year—$798 million from 2009 to 2013 alone. The only way for Metro to balance its budget without raising additional tax revenue would be to cut service and raise fares. Which, let’s be honest, is exactly what ETA advocates.

But wait… the stoopid doesn’t stop there. For the Seattle Times insists on citing Paylor citing the Washington Policy Center, a right-wing “think” tank best known for climate-change denial and its close ties to the stand-your-ground promoting ALEC:

Citing data from the conservative Washington Policy Center, Paylor said that from 2000 to 2012, Metro’s operating costs increased 83 percent, while the inflation rate over that span was 33 percent.

Uh-huh. And you know what else has increased over the past decade? Everything!

King County’s population has grown by 16 percent since 2000, while Metro’s service hours have grown 4 percent since 2008 alone, despite a 2 percent reduction in service from its least efficient routes. Costs for providing Metro’s paratransit services—federally mandated under the Americans with Disabilities Act—have grown by 25 percent since 2008, while security costs have grown by 80 percent, due to fare enforcement, increased policing, and enhanced tunnel security. To offset its revenue shortfall Metro shifted capital funds to operations, delaying the purchase of new buses that would have been less expensive to operate and maintain. Meanwhile, pension contributions—at a rate set by the state legislature—have increased by more the 40 percent.

And on and on and on. I won’t even bother fact checking the Washington Policy Center, because only an idiot or a liar would pit the CPI against Metro’s operating costs over a 12-year span and presume that there was any meaningful contextual relationship between the two numbers.

And yet there it is, totally unchallenged, in black and white on the front page of the Seattle Times. Next stop no doubt: a credulous citation on the paper’s anti-tax editorial page.

“As bus ridership rises, battle over funding measure heats up,” the Seattle Times headline reads in the teach-the-controversy tradition of climate deniers and Intelligent Design bamboozlers. Except there is no battle. It’s every other transportation stake-holder in the county versus the anti-transit ETA. And, I suppose, the Seattle Times.

To be certain, police misconduct and the political storm surrounding it were never my beat, but I know enough about the subject to know that the Seattle Police Department’s handling of the issue these past few months has been more than a little bit weird.

Misconduct findings have been summarily reversed, with not much in the way of a rational explanation (and no, arguing that the appeals were handled in “a manner consistent” with a process with “serious flaws” is not a rational explanation for a troubled department under a federal consent decree). Reformers like former interim chief Jim Pugel have been disappeared, replaced by one-time Seattle Police Officers Guild (SPOG) vice-president Harry Bailey. And while actual misbehaving street cops get their records expunged, the SPD’s most effective and accessible public information officer, Sgt. Sean Whitcomb (who irked some SPD insiders for not being sufficiently devout in his defense of the thin blue line), remains exiled to lands unknown on a trumped up ethics complaint related to the department’s wildly successful Hemp Fest Doritos giveaway.

And of course, then there was the reversal of the reversal of the discipline to the officer who threatened Dom, an astounding fuck-up on both a policy and a communications level, that left Bailey looking weak, unserious, and uninformed.

So, how to explain the apparently anti-reformist behavior at SPD during the first few months of Mayor Ed Murray’s administration? Well, one bit of rather obvious speculation that I keep hearing is that Murray cut a deal with SPOG in order to get their campaign endorsement.

Now, I have no idea if this is true. And there’s no real point in asking Murray, as he’d be absolutely crazy to say anything but an emphatic “No!” So let’s just assume that’s his answer. But regardless, at this point the truth isn’t nearly as important as perception, and fair or not, three months into his first term Murray is beginning to come off as a toady to SPOG—and while that may win him points within SPD ranks, it won’t help him build the consensus he’ll need from the broader community in order to push through the reforms he ultimately proposes.

SPD’s cultural issues are just too ingrained to be solved simply by cultivating buy-in from the rank and file. Most officers are courteous and professional, yet few are willing to break the code and turn against the bad apples who ruin the reputation for all. Thus true reform can only come from outside the ranks. So if Murray is to be an effective reformer, he’s going to need to be perceived as leading the department, rather than as acceding to the demands of SPOG.

Who could have predicted?

An experiment in bipartisanship that began with so much promise a year ago totally crumbled in the final hours of this year’s legislative session.

I don’t know a single Olympia press corps veteran who believed that Rodney Tom’s faux-bipartisan senate Majority Coalition Caucus held any promise of delivering results, while I don’t know a single daily newspaper editorial board that didn’t.

These people really need to get out more.

Personal finance social network WalletHub ranks Washington the 6th best state in which to be a taxpayer.

Apropos to yesterday’s post on the proper context in which to put proposed local tax hikes, I’d just like to mention for the umpteenth time in my decade of political blogging that, on average, Washington is not a high-tax state.

We’re just not. There’s no debating it. Even here in tax-happy Seattle.

Is our sales tax high? Absolutely. But then, we don’t have an income tax. Are our gasoline, alcohol, and tobacco taxes some of the highest in the nation? No question. But then, we don’t have an income tax. Are our property taxes abnormally high compared to other states? Um, no. Measured by either percentage of home value or percentage of household income, our property taxes are actually quite middling. And, we don’t have an income tax!

Everybody uses a different methodology, but no matter how you look at it, Washington’s state and local taxes are consistently found to be below the national average. The Washington State Department of Revenue ranked our state and local taxes as a percentage of personal income 35th nationally in 2011, the last year for which full US Census data is available. Personal finance social network WalletHub recently released a report that finds Washington to be the 6th best state in which to be a taxpayer. Even the conservative Tax Foundation—the “think” tank Tim Eyman used to love to cite—ranks Washington 6th in favorable business tax climate and only 27th in state and local tax “burden”:

Washington’s 2010 tax burden of 9.29% ranks 23rd lowest out of 50 states, and is below the national average of 9.9%.

Of course, Washington shamefully tops the nation in regressivity, thanks to our lack of an income tax and our subsequent over-reliance on high sales and excise taxes. If you earn over a million dollars a year you pay less than 2.8 percent in state and local taxes, but if you earn less than $20,000 a year you pay an exorbitant 16.9 percent. That is outrageously indefensible. But our mildly regressive property taxes play only a minor role in tilting our tax structure onto the shoulders of the poor, while funding much of the public services on which they rely.

Look, nobody likes to pay taxes. Not even me. But when I hear parks district and Metro funding opponents cry out that our state and local taxes are already too damn high, I tell them to go try out another state! We’ve been living on the cheap the past decade and a half, deferring maintenance on the infrastructure we have and refusing to invest in the infrastructure we need. Our tax “burden” is already on par with states like Mississippi—and if we don’t start spending a little more on roads and transit and parks and schools, our infrastructure and our economy will soon be on par with Mississippi as well.

It’s not that Seattle Times columnist Danny Westneat is wrong when he points out that our progressive city and county agenda of preserving Metro bus service, providing a stable funding source for city parks, and expanding high-quality preschool comes at a high cost. It certainly does. But if he’s going to describe the price tag as “steep,” then we need to have a little more context. For steepness is a measure of the relative elevation from Point A to Point B—and while Point B is not in dispute, the location of Point A is a bone of contention.

Yes, the county is asking voters for $130 million a year in car tab and sales tax revenue to stave off a 17 percent cut in Metro bus service. And yes, Mayor Ed Murray wants to go to the ballot with a $56 million a year parks district. And yes, the universal preschool measure the council is currently developing could ultimately cost Seattle taxpayers another $30 million to $70 million annually. Westneat isn’t exaggerating the numbers. That’s a lot of new taxes.

But “new” based on what? Our current diminished tax based? Or the city and county tax base we enjoyed before a series of tax-limiting statewide initiatives were passed against the will of Seattle and King County voters?

Take Metro, for example. Prior to the passage of Tim Eyman’s $30 car tab fee Initiative 695 in 1999, Metro relied on a relatively stable Motor Vehicle Excise Tax (MVET)—a tax on the value of your car—for about one-third of its operating revenue. King County voters rejected I-695, but it passed statewide, so the legislature granted Metro some additional sales tax authority to make up the difference. Unfortunately, sales tax revenue is much less stable than MVET, and when the economy collapsed in 2008, so did Metro’s funding. From 2009 through 2015 Metro will collect $1.2 billion less in sales tax revenue than previously projected.

That averages to $200 million a year in reduced tax revenue, far more than the $130 million a year Proposition 1 would raise.

Seattle tax revenues have been similarly slashed thanks to an Eyman initiative: I-747, which again, was rejected by Seattle and King County voters, but was approved statewide in 2001. I-747 limits growth in regular levy property tax revenues from existing construction to an absurd 1 percent a year—far below inflation. A 2012 report from the Seattle Parks Foundation concludes:

As a result of Initiative 747 alone, the City of Seattle’s property tax collections in 2010 are at least $60 million less than if the measure had not passed. The impact of the loss is compounded each year the limits remain in place, so annual losses increase by approximately $15 million per year, meaning that the estimated loss for 2011 will be at least $75 million. This estimate assumes the City Council would have limited the tax increase to the rate of inflation in the City’s labor costs (3.5 percent to 4.5 percent annually, which includes the cost of health care). If one assumes the City Council would have increased property tax to the statutory limit of 6 percent per year, the 2011 loss would be $126 million.

Taking into account compounding, and using Eyman’s own framing, I-747 will save Seattle taxpayers between $135 million and $186 million in 2015 alone, the first year any of the new taxes Westneat mentions would take effect. That’s far more than the combined annual cost of a parks district and universal preschool!

Such a bargain!

Yes, in both cases we’re talking about substantial tax hikes above what taxpayers are currently paying. But they amount to substantial tax cuts from what taxpayers would have been paying today had not I-695 and I-747 been forced on us by statewide voters. Indeed, the only reason we are going to voters with tax hikes to fund bus service and parks is that I-695 and I-747 left the county and the city without sufficient revenues to sustain these crucial services!

So are the costs high? Sure. It’s expensive to maintain the high-quality public infrastructure we want and need. But are these tax hikes “steep”…? Not if your starting point is the more rational local tax structure we enjoyed just a decade and a half ago, before that two-bit fraternity-watch salesman started fucking with our tax base for fun and profit.