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Has state government grown too fast?

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ftes

When Republicans and their editorial board surrogates argue for an all-cuts budget, they routinely decry the spurt in state spending over the past couple years as evidence that state spending is out of control.  Long term trends however, show quite the opposite.

Above is an OFM chart that tracks growth in the number of full time state employees versus growth in population, and as you can see, the two numbers track quite closely.  This is an imprecise metric, as demographic shifts impose varying demands on state government (for example, the current surge in K-12 enrollment dictates the hiring of more teachers), but it clearly doesn’t indicate a state goverment that’s out of control.

I’m just sayin’.

Access problems?

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I’m hearing scattered reports of problems accessing HA and Publicola today.  Everything is currently working fine via my Qwest DSL and my iPhone’s 3G connection, but Darryl can’t access it via his Comcast service at home, and I’ve heard from folks in Olympia with similar problems.  Not sure what’s going on, but it’s likely a DNS issue of some sort.

UPDATE:
My hosting company has provided the following response:

There is a connectivity issue with an upstream provider in California. Your web site and email service is up and running, but you can’t access it because of this problem with the upstream provider. It is only affecting certain isps and should be fixed soon.

Locally, this appears to be affecting mostly Comcast customers and some local government networks.  Not much I can do about it.

B-Day

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It’s B-Day in Olympia, and not likely a happy one, as the Senate introduces its general operations budget at 10:30AM, while the House introduces its transportation budget at noon.  The smart money is on an all-cuts budget coming out of the Senate, with, of course, Seattle and light rail getting screwed by House transportation planners.

We’ll soon see.

UPDATE:
The TNT’s Political Buzz blog wins the local prize for first word on the Senate’s budget proposal:

Senate Democrats just unveiled their budget proposals, documents that proposed to close a $9 billion gap between tax collections and planned spending by freezing public school and state workers’ pay, closing a prison, eliminating 7,000 state jobs and lowering enrollment at colleges by more than 10,000 students.

Still waiting to see the specifics.

“We’re going to have to rethink the drug problem”

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I’ve written quite a bit recently about Afghanistan and the opium issue. There’s definitely a real danger of creating the same situation in Pakistan that we’ve already created in Mexico, with terrorist groups reaping massive profits from an illegal trade that we can’t stop. I’m hoping that this article on newly appointed Ambassador Richard Holbrooke is a sign that our policy is going to finally deal with reality over there:

So here Holbrooke was acknowledging the significance of the corruption issue, somewhat eloquently and candidly, yet he could not say how it might be addressed. As for Karzai’s government being “detached,” he didn’t go there.

Holbrooke is a wonderfully engaging character—an old-school power player. He schmoozes reporters, coming across as intelligent, crafty, and concerned. He is a charmer who knows his stuff. He won’t no-comment a tough question; he will compliment the reporter on posing an insightful query, show he fully understands the issue at hand (which he does), and then explain he can’t answer it—in a manner that can be convincing, not annoying.

But at the end of the briefing, Holbrooke did speak somewhat candidly about a vexing part of the Afghanistan problem: drugs. What to do about the opium flowing out of Afghanistan has always been a knotty element of US policy regarding Afghanistan. How much of a priority should it be? (Simply put, if you attack the the opium trade, warlords and locals get pissed off and join or support the other side.) Asked about the priority of drug fighting in the Afghanistan review, Holbrooke, as he was leaving the briefing, said “We’re going to have to rethink the drug problem.” That was interesting. He went on: “a complete rethink.” He noted that the policymakers who had worked on the Afghanistan review “didn’t come to a firm, final conclusion” on the opium question. “It’s just so damn complicated,” Holbrooke explained. Did that mean that the opium eradication efforts in Afghanistan should be canned? “You can’t eliminate the whole eradication program,” he exclaimed. But that remark did make it seem that he backed an easing up of some sort. “You have to put more emphasis on the agricultural sector,” he added.

I don’t envy Holbrooke at all. He has one of the toughest jobs of anyone Obama has appointed so far. Even if he succeeds at helping to rebuild Afghanistan (an extraordinary feat in itself), he could still end up with a major headache just across the border in Pakistan as a result.

For several years, groups like the Senlis Council have been advocating allowing Afghan farmers to contribute to a legal market for opiate-based medicines. If we do go that route, and it works to keep Afghan farmers from contributing to the black market, it doesn’t mean that the illegal market for heroin will just dry up. It will just move elsewhere. The most logical place for it to move to would be just south of the border. This is the root of why this situation is so complicated. If we succeed, we could still end up creating a situation that becomes far more dangerous to us.

This conundrum is just one more reason that we need to get more serious about the kinds of harm reduction techniques that can reduce the demand for illegal heroin in the first place.

Structural deficit

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I’ve used the term “structural deficit” a lot over the past few years, only to have it pooh-poohed by the anti-tax/anti-government reactionaries on the right, so I thought it might be useful to spend a little time discussing exactly what I mean.

Washington state relies on the sales tax for about 56.5% of general fund revenues, one of the highest ratios in the nation, and yet as this study paper produced by Economic Opportunity Institute cogently explains, our sales tax base over time gradually represents a smaller and smaller portion of our overall economy.

The sales tax base is growing more slowly than demand for state investments and the economy overall. Historically, sales taxes have been applied to goods and not to services. However, personal spending on services is steadily growing, and spending on goods is falling as a percentage of personal consumption. Goods and services subject to Washington sales tax represented 32% of total consumer spending in 1959, but only 26% in 2000.

And when your tax base shrinks, you really have only three options:  expand the base, raise the tax rate, or shrink the role of government in our economy and society.  And despite all the rhetoric about state government growth in real dollars over the past two budgets, Washington lawmakers have largely chosen the third option over the past couple decades, steadily shrinking both revenues and spending as a percentage of our overall economy.

As the following chart prepared by the Washington State Budget and Policy Center shows, both state revenue and spending have fallen or remained flat since 1995, relative to the state economy.

relativegrowth

(It is also interesting to note that the projected budget gap in the 2009-11 biennium is not due to an explosion in state spending, but rather to a precipitous decline in revenues.)

Yes, I know that for many of you on the right, this data may appear counterintuitive, but it is widely supported.  Indeed, even according to the conservative Tax Institute, the organization whose data Tim Eyman has long used to support his own anti-tax agenda, Washington’s state and local taxes as a percentage of personal income have fallen from 10.4% in 1994, when the Tax Institute ranked us at 17th nationally, to a 35th place 8.9% in 2008, well below the national average of 9.7%.

Different organizations may calculate different raw percentages, but they all generally report the same ranking and the same relative decline.  According to the Tax Institute, Washington’s 2008 state and local tax “burden” was exactly the same as that of Mississippi. That’s a fact.

And these numbers should come as no surprise.  Our over-reliance on a retail sales tax levied on an ever shrinking portion of our economy makes this long term structural deficit inevitable, and unless we reform our tax system to broaden the base, or permanently increase sales tax rates, the ability of our government to provide the services taxpayers expect and demand will continue to shrink in proportion to its revenue base.

There is a legitimate debate to be had over the proper size and scope of government… but we’re not having that debate.  Instead, even as Democrats dominate the Legislature and the governor’s mansion, the lower-tax/smaller-government Republican agenda is winning by default.

Weekend Roundup

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This was quite a week in drug war news, and by all indications, the focus on this long-neglected topic is not going away.

– Senator Jim Webb of Virginia is leading the effort to reform the criminal justice system. Webb has consistently been one of the loudest (and loneliest) voices on this issue, as other politicians often see it as too risky. This is the right time for this kind of reform to happen, though, and it’s already starting to happen in some states. Patty Murray is one of Webb’s co-sponsors for a bill that would set up a blue-ribbon commission tasked with an 18-month review of the train wreck our criminal justice system has become.

– During the internet town hall that President Obama held this week, he was finally able to acknowledge the fact that questions about marijuana’s illegality have dominated each of these online forums. Unfortunately, he treated it as if the interest in the issue was something to be mocked. I want to agree with Scott Morgan here that Obama gets this issue more than he pretends to, but that’s not going to be enough sometimes. In a week where Obama was dealing with the crisis in Mexico, for him to make a joke about what’s arguably the biggest reason Mexico has that crisis makes him look incredibly out-of-touch.

As I’ve said before, the illegality of marijuana is not the most important issue America faces, but it is an important issue for a number of reasons, and it’s the issue where the policies we currently have are the most detached from reality. That’s why questions about it dominate these online forums, because prohibition has become such a dangerous spectacle that we’re desperate to finally break the silence over it.

– A week after Eric Holder promised that the DEA would not raid medical marijuana dispensaries that are complying with state law, the DEA raided a medical marijuana dispensary in San Francisco. The DEA claims that it was in violation of state law, but won’t say which one. The speculation is about their financial dealings, either a failure to pay taxes or a policy that allows low-income people to obtain medicine for free. Either way, city officials didn’t seem to be aware that the raid was happening, so the DEA apparently believes that they, and they alone, will be the ones determining whether or not a dispensary is violating state law.

If so, this completely undermines the policy that Obama and Holder have announced. As we’ve discovered here with our medical marijuana laws, unless you have a clear defense against being arrested (or having your supplies confiscated), nothing is going to stop it. If the DEA can just say (without proof or agreement from state or local officials) that a facility is in violation of state law, it’s not much different from the Uncle Jimbo policy, where all you need to do is say something at the time of the raid in order to justify it. If this raid was not based on an actual violation of state law, either people in the DEA’s office need to be shown the door, or Obama’s policy is still an empty promise.

– Speaking of this state’s medical marijuana laws, another patient received some long-delayed justice this week. Timothy Adams of Kennewick was able to pick up 40 marijuana plants and growing equipment that was taken from him by police in 2005. An Appeals Court judge ruled that Adams was wrongly convicted in 2007 and was entitled to his stuff back.

– The decriminalization bill in Olympia may have died, but it’s been inspiring more and more people to speak up on the issue. Lynnwood state representative Mary Helen Roberts doesn’t understand why it’s a crime to grow a plant in one’s house.

– Remember the weird editing from the Jon Stewart/Jim Cramer interview? The reason for it was because Cramer said that he’d be ok with legalizing drugs (specifically cocaine).

– The Drug War Chronicle has a plus-sized roundup of the week’s corrupt cop stories.

Wise words from Gregoire

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Sometimes, you just have to do the right thing…

The last time the state had a comparable budget shortfall was in 1981-1982, when Republicans controlled both houses and the governor’s mansion. The Republicans raised taxes to help deal with their budget woes, and come the 1982 elections, Democrats were elected back into power in both the House and the Senate. Two years later, Republican Gov. John Spellman was voted out as well. In 1993, majority Democrats had to raise taxes and cut programs to deal with budget problems, and in 1994, lost their majority in the House and hung on to a one-seat majority in the Senate.

Gregoire said that history lesson shows it won’t be easy.

“There’s no easy way out of this,” she said. “And you have to look past the political consequences, and do what your heart and your head says is the right thing to do.”

And if the right thing to do is raising some taxes to help the state through these tough economic times, as both Republicans and Democrats have reluctantly done in the past, let’s hope that Gov. Gregoire is able to lead the legislature toward it, the political consequences be damned.

That “not Goldy” guy isn’t posting

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I would like to alert my fan (singular) that I will not be posting for a while due to a long-scheduled vacation. I’m going to go research my cultural heritage at the John Brown Museum and Cabin, in hopes of developing a line of John Brown license plate holders and car antenna flags.

I’m also envisioning some silver on black John Brown mudflaps. I really don’t understand why the accessory options are limited to the Confederate side. This could be an entirely new market.

Now is the time for a “high incomes tax”

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I’ve got no particular insight into how the budget dance is being choreographed, if at all, but it’s hard to believe the cuts-only budgets being introduced next week are intended to be anything but an opening gambit.  Most Olympia insiders I’ve talked to expect an effort to put a tax measure before voters at a special election in June, a measure that would most likely include a temporary increase in the state sales tax to fund specific programs.

And progressive activists like me will once again be expected to promote a highly regressive tax increase on the lower- and middle-income families who can afford it least.  Huh.

The truth is, it would be irresponsible to attempt to close a budget gap this big without relying on cuts, deficit spending, and new revenue, and there are few current revenue options in Washington state that don’t impose a substantially regressive burden.  And regardless of how distasteful I may find yet another sales tax increase—let alone the even more regressive excise taxes that would likely accompany it—I fully understand that there isn’t the time to implement the type of structural reforms I would prefer, while still meeting the immediate needs of the new biennial budget.

Yet that doesn’t mean Democratic legislators and their progressive constituents are free to simply shrug their shoulders and accept the status quo.  Indeed, passage of the regressive June measure may provide exactly the opportunity we need to move our state forward toward a more equitable and sustainable tax structure.

So here’s the deal.  Put a sales and excise tax increase on the June ballot, and folks like me will give you our support… but only if you also put on the November ballot a measure that would repeal the June increase, and replace the revenue with a tax on incomes over $200,000 a year.

According to the Economic Opportunity Institute, a “high incomes tax” of 3% on incomes between $200,000 and $999,999, and 5% on incomes over $1 million, would raise about $2.58 billion per biennium, yet fall on only 4% of WA households.  I’m guessing that’s slightly more than the June measure would be expected to raise.

Yes, an income tax would take some time to implement, and yes, its constitutionality would surely be challenged.  House Speaker Frank Chopp and other legislators have conveniently argued that any income tax would require a constitutional amendment—a nearly impossible political feat—but the Tax Structure Study Commission concluded in 2002 that if challenged, the 1933 decision would likely be overturned:

[T]here is ample reason to believe that a modern income tax, established by the Legislature or by the voters, would now be upheld. The basic reason is that Culliton was based on an earlier Washington case which the State Supreme Court clearly misread.  More importantly, the earlier case was based on a line of United States Supreme Court cases that have subsequently been reversed.

[…] Today there are only two states (Pennsylvania and Washington) whose courts have not reversed earlier decisions treating income as property.  In all other states where this issue has been considered, the income tax is treated as a form of excise tax or in a category of its own.  Accordingly, there is a reasonable likelihood that if the Washington State Legislature or voters enacted an income tax today, Washington’s courts would approach the issue with a fresh view and might very well decide the matter in a manner consistent with the dominant view in other states with similar constitutional provisions.

Legislators who avoid this contentious issue by merely dismissing an income tax as unconstitutional are being disingenuous; it’s been 75 years since the state Supreme Court has directly addressed the core arguments, and many constitutional scholars have testified that they expect the 1933 decision would be reversed if challenged.  Furthermore, the scenario I describe, in which the severability clause is written so that the existing tax is not repealed until the new one is implemented, averts any potential 1933-like fiscal crisis that might be created should the court rule the other way.  Unless otherwise repealed, tax increases from the June measure, if passed, would continue to generate revenues until the high incomes tax is fully implemented, if ever.

Should the Legislature put a sales and excise tax increase on the June ballot, it will only be due to an overwhelming consensus amongst Democrats that additional revenue is desperately needed to help maintain crucial services during this economic downturn; if you believe the money is needed, there’s really no other way to generate it fast enough to make a difference.  But by tying it to a more deliberative November measure that would repeal the June package and replace it with a progressive, high incomes tax, Democrats would also be given the opportunity to take a clear stance for or against the interests of working and middle class families.

In short:  if we agree the revenues are needed, how best to raise them?  From families who already pay up to 18% of personal income in state and local taxes, or from the wealthiest 4% of households who have long benefited from the most regressive tax structure in the nation?

Are state Dems on the side of the wealthy or the rest of us?  This may be the session in which we finally find out.

King County Conservative District

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It was close, but in a streak of futility that rivals that of the Chicago Cubs, King County’s conservation community once again failed to win its chosen candidate a seat on the board of the King County Conservation District, with (u)SP endorsed Preston Drew edging out HA favorite Mark Sollitto by a 1,357 to 1,199 margin.

Ah well.  I guess the people have spoken.  You know, all 2,757 of them… out of a pool of over 1.1 million registered voters.  That’s a turnout rate of less than 0.25%, compared to the respectable 83.9% of registered voters who turned out last November.

What a stupid, fucking, ridiculous way to run an election.  I mean, why even bother?  Why not just rename the damn thing the King County Conservative District, and save the half-hearted effort to pretend this is an election at all?

No vote-by-mail, no neighborhood polling places, no voter’s pamphlet… not even a goddamn postcard reminding you to vote. Only a handful of blog readers and well-informed activists on either side even knew there was an election, as evidenced by the fact that Sollitto got 43.5% of the vote as a write-in candidate, seven times that of third place David Mauk, who was one of only two names on the ballot.

Standing in line behind Richard Pope at the Bellevue Library voting station, a poll-worker chastised me for talking politics in the polling place, warning that I was violating the law—oh God was I tempted to challenge her to call the cops.  In fact, I wasn’t talking about the race at all, but rather, how stupid, fucking ridiculous the entire KCCD election process is.  I mean, only a 0.25% turnout, and there’s a fucking line?

What a total joke.

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