This week, I spoke with Sen. Dan Swecker about a Constitutional amendment he’s sponsoring for the regular session that would put an end to unfunded initiatives. What do Republicans and Democrats think? And how would this affect professional initiative writer, Tim Eyman? Here’s what Swecker had to say.

Q: First, tell me a little about your idea and how this came about.

Swecker: Actually, it’s kind of come from frustrations we’ve felt over the last four or five years as we’ve had to cut the budget. The biggest examples are initiatives 728 and 732 that provided for smaller class sizes and cost of living increases for teachers. The cost of those is just monumental – probably hundreds of millions of dollars every year and in an environment where you’re already having to cut programs in order to balance the budget. The idea of pouring more money into one part of one program just doesn’t seem appropriate. I also just don’t think that people have any understanding of whether or not an initiative is going to cost something or whether or not taxes would have to be raised. 

This bill would do two things. First, the state would do a fiscal impact analysis then the bill has the maker of the initiative indicate what the revenue source would be that would pay for the program. There was a recent issue of Initiative 1163 to provide training for home care workers and the ranges of cost were from $40 million to $80 million. We’re in a position where we’re already cutting programs for the most vulnerable and disabled parts of our population, things like Basic Healthcare. So it seems crazy to take more money out of htose programs to pay for training. So I just decided that it’s important that people take on the same responsibility that I have as a legislator.

Q: So, because not everyone might be totally familiar with how initiatives work: Once voters pass an initiative under current law — even if it requires a lot of funding — the Legislature basically can’t change it for two years.

Swecker: Right, it takes a two-thirds majority to touch it for the first two years.

I mean, everybody loves education and loves teachers and wants smaller class sizes, so it sounds like a really good vote. But when you take a look at the fiscal implications, it could be really horrendous. (more…)

Tags: initiatives, Q&A, Sen. Dan Swecker

Photo from Wikimedia Commons

Earlier this week, voters passed Initiative 1183, which would privatize the state’s liquor system. For this week’s Q&A, I spoke with Brian Smith, Communications Director for the Washington State Liquor Control Board, about what this change means for the WSLCB.

Q: Private stores will be able to sell liquor in June of next year – what’s happening before then in order for that transition to occur?

Smith: Immediately, there’s a number of things. We will need to do some emergency rule making to make sure that our existing rules and laws coincide with the initiative, because it goes into effect Dec. 8.

We need to do something about the trade area, which you may recall was an issue during the campaign.  We need to develop licenses for people to apply for: The spirits retail license, the distributor license do not exist. Then you have to have about 60 days to process them. So, for example, if you’re a grocer, you need to apply for a license, then through that process we work with local governments – all that takes generally about 60 days.

Q: You mentioned “trade area.” Is that a definition that will be established before any licenses are issued, or will that be a case-by-case basis?

Smith: We don’t know yet. We are contingency planning, but that is certainly something that’s going to have to happen very soon.

Q: If you read the initiative, it’s talking about distributors and retailers. Can you describe how that system might look?

Smith: Right now, there are beer and wine distributors in Washington. They do the jobs of not only collecting the product from manufacturers, then move it out to retailers. Usually, they provide a service: They go in and stock the beer shelf, etc. I would imagine it’s going to be something like that under this scenario. They’ll bring in the liquor; handle marketing it on shelf space. The retailer is going to be just that – anyone that meets the criteria of the initiative, which is 10,000 square feet or larger, hasn’t had a public safety violation in two years. Contract stores are grandfathered in but they’ll have some changes: Right now, a contract store is a small business. We own the inventory and we pay them a commission on their sales. Under 1183, they will have to purchase their own inventory, and that runs, on average, $125,000, which is pretty steep for a small business.

Q: I also noticed in the initiative that, while state liquor stores will close next summer, there will be a one-year period for the state to get rid of all the assets. Does that mean the liquor stock? The buildings?

Smith: Assets like land and buildings. We’ll have the distribution center and we’re supposed to auction off the existing state store license locations. (more…)

Tags: initiatives, liquor, Q&A, WSLCB

Last Q&A, I spoke with Sen. Ed Murray, Democrat and head of the budget writing committee, about the budget and his support for taxes. This week, I spoke with Sen. Joe Zarelli, the Republican who takes the lead on budget issues in the Senate, about the same. Here’s what he had to say.

Q: The magnitude of the budget crisis is hard to comprehend. Do you have any way to characterize it that might help people understand what you’re dealing with as legislators?

Zarelli: Generally, when you make reductions in government spending it’s those who obviously are dependent on government spending that feel the reduction. So it’s hard to express. For those people, obviously it’s a very real scenario. For us, regardless of the fact that one could say we actually have more money projected for this biennium than last biennium, that’s only because we went from a very high projected revenue to a very low projected revenue.

It gets harder as you make those reductions, it’s no different than people sitting around their kitchen table. It gets harder every time as you have to make more cuts. For us, the faces (of those affected by the cuts) are real.

Q: Is there a way to get to the $2 billion in reductions simply through cuts? Or would that be going too far?

Zarelli: Well, I don’t think we have much of an option. To generally raise taxes – the desire of some – I’m more of the mind that we have to make cuts first of all and if someone wants to generally look at the idea of taxes, then they’ll have to take it to the public. And that’s going to be a real hard sell because the basis for our declining revenue is based on the inability of consumers to spend money because they don’t have money. To generally raise the price of goods through taxes, I don’’t know how that helps us get out of our funk.

The answer is, how do we get people working so that people can take care of themselves and not have as great a need for the government. So to me, we should focus rather on the folks and how do we get them employed and make it so that the private sector can create employment strategies.

Q: What are your thoughts on eliminating tax exemptions? There’s been some talk of getting rid of a tax exemption that doesn’t demonstrably boost the economy.

Zarelli: Yeah, I think that’s our job (more…)

Tags: Budget, Q&A, taxes, Zarelli

This week’s Q&A is with Sen. Mike Carrell, who I spoke with mostly about SJR 8205, which will remove a provision in the state’s Constitution that has never been enforced — and has been ruled unconstitutional. We also talked about next week’s big Economic and Revenue Forecast, where the state’s top economist is expected to have more bad news for lawmakers. Read all the way through the interview to see what Sen. Carrell has to say about it.

Q: First, what would the SJR do, in your own words?
Carrell: What it will do is eliminate from the state constitution a redundant part which is Article 6, Section 1(A). Article 6, Section 1 says what the qualifications are for a person to vote: You must live in the state, be 18 years of age, you can’t be a criminal — things of that nature. But Article 6, Section 1(A) says if you’ve been a resident of some state outside of Washington and you haven’t been here at least 60 days, then you can only vote for the president and vice president. The U.S. Supreme Court declared that it was unconstitutional to not allow somebody to vote that was of the age and had the other qualifications. But this has remained in our state constitution. I’ve tried for a number of years to convince people of both parties to clean up the constitution by removing this clause, and I finally did convince virtually everyone, so it’s going to a vote of the people.
It’s more a matter of doing some house cleaning to clean up something that was never implemented. It was passed by the people in 1977 and since that time, it has never been in actual effect. We have ignored it, so it is time to get rid of it.
(more…)

Tags: Budget, initiatives, Q&A, Revenue forecast, SJR 8205, supercommittee, voting

This week’s Q&A is with Sen. Joe Zarelli. I spoke with him about SJR 8206, a Constitutional Amendment that will bolster the Rainy Day Fund by requiring the state to put “extraordinary revenue growth” in the bank.

Q: First, tell me what this would do in your own words.

Zarelli: Well, it builds upon what we put out a couple of years back establishing the Rainy Day Fund. For me, it’s one of those long-term lessons learned from the current revenue scenario we’re in, where we saw revenue grow way outside a typical scenario (earlier in the decade).  What this does is this sets up a process in the future where if this ever happens again, we’d be required to capture a percent of extraordinary revenues and move it to the Rainy Day Fund. That does two things: First, it makes us save some of that money and second, we don’t spend it — so it has a double effect of making the budget more sustainable over time.

Q: You mentioned that it saves money in two ways — the second being that you don’t create new programs with extraordinary revenue. Can you say more about that?

Zarelli: Well, the biggest problem is that when you have a spike in revenue that you know isn’t going to continue and then you spend that spike, it creates a bow wave — you have no way to support that spending. When revenue comes back down to its historical growth pattern and then spending is way out of balance, that creates problems like we’re in now. The idea is to harmonize the spending pattern so it stays consistent with what is long-term growth instead of the ebbs and flows.

Q: There hasn’t been much opposition to this Constitutional amendment. Does that reflect bipartisan support across the state?

Zarelli: Well, there are some of those in the social services arena who think that we can’t commit to saving money, we have to spend it because there’s a huge need. There is a small group, but my message to them is that it does us no good if we commit to spending that we then have to withdraw from. (more…)

Tags: Budget, budget stabilization, Q&A, Rainy Day Fund, revenue, SJR 8206, taxes, Zarelli

Last week, I spoke to Tim Eyman about his latest initiative and how it would affect tolling across the state. This week, I spoke with Doug MacDonald, former secretary of transportation. He retired in 2007, just after the Tacoma Narrows Bridge opened. He’s an opponent of the initiative. Here’s what he had to say.

Q: First, what does this initiative do from your perspective?
MacDonald: Well, the worst part of the initiative is that it’s going to stop a whole lot of progress that’s been made on roadway improvements. I’m not sure that Tim Eyman, when he drafted this initiative, understood what some of its effects would be. But the kind of bomb that it dropped that’s most significant is on the 520 bridge project, because that’s structured to be financed by tolls to pay back bonds that would pay for some of its cost. That’s a good thing because it means that costs get paid in part by the users and not fall on taxpayers across the state. That’s a plan that’s been very attractive.

But the initiative says that tolls have to be set by the Legislature, which is absolutely not consistent with tolls being used to pay back that kind of a bond. And the confirmation of that isn’t coming from people like me, it’s coming from our state treasurer, Jim McIntire. McIntire has analyzed all this and he has put out a statement, reflected in the OFM fiscal analysis, that says that investors won’t buy bonds at as favorable a rate if there’s the political uncertainty of having tolls being set by the Legislature. (more…)

Tags: Doug MacDonald, funding, initiative 1125, Q&A, taxes, Tim Eyman, tolls, transportation

This week, I spoke with Tim Eyman on Initiative 1125. Eyman says it provides straightforward protections for toll revenues. Opponents say it blows a hole in transportation funding and is just bad policy. And the Office of Financial Management’s projections say it could jeopardize funding for some big-ticket projects.

Usually, Q&A conversations are limited to 15 minutes. This one went a bit longer — so when I talk to the opposition next week, I’ll give them an extra five minutes, too.

Q: First, what does this initiative do from your perspective?

Eyman: Biggest thing that the initiative does is that it follows up on last year’s initiative 1053. We did that last year, it was the fourth time the voters voted for the policy. It got 64 percent approval. That was about saying, if they’re going to raise taxes, it takes a two-thirds vote. If they’re going to increase a fee, they’ve got to take a legislative vote. It was the fourth time the voters had voted for these policies. It was just a long-standing debate and the voters said this is what we want unambiguously. During session, the transportation budget writers decided not to comply – they re-delegated the authority to set tolls right back to the Transportation Commission.

In theory, initiatives are good for two years. After two years, they can start monkeying with it. This is the first time I’d ever seen them sidestep a provision in an initiative within the two-year period. What 1125 does is the idea that it needs to be the Legislature that sets the tolls it can’t be the unelected bureaucrats at the state agency. (more…)

Tags: bridges, Eyman, highway funding, initiative, initiative 1125, Q&A, tolls

Last week, I spoke with Nora Gibson about the pros of Initiative 1163, which would require more training for home care workers. This week, I spoke to Julie Ferguson, who is an opponent. Ferguson is a board member of the Washington Private Duty Association, which represents home care businesses. She’s also an administrator and part-owner of a private duty home care agency, Advanced Health Care.

Q: From your perspective, what does this initiative do?

Ferguson: Well, this initiative is troublesome. Initiative 1163 is special interest training program benefiting only the SEIU with absolutely no funding mechanism. My colleagues and I work with seniors every day, we care for thousands of seniors, we employ thousands of caregivers and this expensive union-sponsored initiative is not necessary. The costs will be passed on through higher taxes and small businesses like mine will be forced to raise their rates to compensate for non-funded training.

The Legislature didn’t fund the predecessor, Initiative 1029, for three years because there’s simply no money in the budget. Earlier this year, SEIU filed several initiatives that did similar things — all the others had a funding component except for 1163. For some reason, they chose that one to focus their signature gathering efforts on. I don’t know where they think the money will come from.

Q: Can you say more about this initiative being a mechanism for unions?

Ferguson: It’s funded, written and has been completely designed by one labor union, just the SEIU. It benefits them and the people that work for them but it’s hugely, hugely expensive. We’re looking at $55 million. The money just isn’t here. To us, when the state’s facing the biggest financial deficit since the Great Depression, how can we justify a union training program? (more…)

Tags: home healthcare, Initiative 1163, Q&A

Photo from Wikimedia Commons

This week’s Q&A is with Bruce Beckett, Government Affairs Director of the Washington Restaurant Association and a spokesman for the Yes on Initiative 1183 campaign. I wanted to talk to him about this year’s effort to privatize liquor sales in the state. I’ll be following up next week with someone against the initiative. Here’s what Beckett had to say.”

Q: First, what does this initiative do?

Beckett: Well, it simply removes state government from its role as the sole retailer of liquor in the state and allows private retailers, distributors or even manufacturers to enter into the market. It does so by allowing a limited number of qualified retail stores to sell liquor. They have to be 10,000 square feet or larger, and it also will increase revenues to state and local government over and beyond what they’re currently receiving from the liquor distribution center in Washington. And it strengthens regulations on the liquor sales to minors in particular.

Q: You were involved in an initiative last year to privatize liquor. What are the main differences this time around?

Beckett: Last year, the voters responded quite strongly to the campaign that was put out in opposition. (The opposition) focused on public safety and on revenues to state and local government. There were some legitimate issues raised by stakeholders. This initiative responds to those concerns in a number of ways.

(Initiative 1183) will increase revenue to state and local government by the imposition of license fees on retailers and distributors. The fee is 17 percent for retailers on gross sales, 10 percent for distributors or wholesalers. (The 10 percent rate) does decline to 5 percent once there’s the replenishment of the revenue the state would lose. So on the revenue side, that’s how that’s been addressed.

On the public safety side, there’s a number of things. First, it limits retail outlets to 10,000 square feet or more. That’s a pretty good-sized grocery store. That’s to eliminate the concern over liquor being in convenience stores or gas station mini-marts. Second, it increases education and training requirements for those employees that will be handling liquor in those stores. Third, it doubles the penalty for selling to a minor — doubles it over what would occur on beer and wine sales.

The revenue increase, which is being evaluated right now, is projected to be over $200 million more in the first biennium and then 10s of millions of dollars thereafter. Ten million of the increase is dedicate to public safety. (more…)

Tags: initiative, Legislature, liquor, privatization, Q&A

This weeks’ Q&A is with Sen. Derek Kilmer, the vice chairman of the Senate budget writing committee. (For last week’s interview with Rep. Gary Alexander, go here.)

Q: The Senate last week passed a bipartisan budget. As some of your colleagues pointed out in floor speeches, that kind of teamwork is difficult. What did that take?

Kilmer: The stage for a bipartisan approach was really set on the first day of session when the rules were changed to allow amending the budget with a simple majority vote on the floor. And that was, in a sense, a good faith gesture to demonstrate our intent to work in a bipartisan way. And you know, the reason for that is clear: The challenges facing our state are not Democratic or Republican challenges, I would argue they’re not even left or right challenges — they’re forward or backward challenges.

We believe that the state moves forward better when we work together to solve problems. And so from the beginning, there was an attempt to work across the aisle, to identify a strong path forward both for the supplemental budget and for the bigger challenge, which is the biennial budget.

Q: What does it mean in terms of the finished product?

Kilmer: There’s been very frequent interaction between Sen. Murray and Sen. Zarelli on the operating budget — that means that the budget that passed off the floor was probably not something that either of them liked every bit of. There’s not a lot of good options as it is. But there’s an acknowledgement when you work together that there’s some things that don’t get in that you would have liked to get in, that don’t get done that you would have liked to get done, but that there’s compromise in working together. Our hope is that that the effort last week was really one more step forward. It’s not a solution to the problem in the current fiscal year and it’s not a permanent solution to the problem the state is facing in the biennial budget, but it’s another step.

Q: You mentioned the biennial budget. Have negotiations started for that?

Kilmer: Yes. There are a couple things that are happening. One is, the committee leadership on both sides of the aisle having frequent dialog, but also really there’s a new approach that Sen. Murray’s laid out to create these sort of bipartisan working groups — on education,  healthcare, corrections … basically looking at various functional areas of the government in a bipartisan way and really asking a couple of core questions: One, what are the essentials that the state needs to invest in and what are some non-essentials that can be cut? Because I think there’s an acknowledgment that the state simply can’t afford to do everything. The state will need to do less with less. And then second, in each of these functional areas, we’re looking for opportunities for reforms, acknowledging that this isn’t simply a two-year budget problem but also hoping to set the stage for the next 20 years.

You know, we’re looking at ways to be more innovative about the delivery of services, looking for administrative efficiencies, and consolidation that make both policy and budget sense. That dialog is happening and will really happen much more in earnest when we can put the early action supplemental budget behind us.

Q: And that bipartisanship continues on the budget negotiations? (more…)

Tags: Budget, Kilmer, Q&A