WashACE Blog

WA CEO Looks at Math & Science Education

This month's issue of Washington CEO carries an excellent cover story, Failure to Compute, on math and science education in Washington. Senior writer Aaron Corvin puts the issue in proper context.

Our state may now be a hotbed of high-tech, bioscience and entrepreneurial activity, but that hotbed will cool if we don't have educated workers with strong math and science skills.

The numbers don't look good.

The story looks at dismal WASL performance - scores so bad that lawmakers postponed requiring students to pass the science and math WASL in order to graduate from high school. Corvin reports on how the US lags globally in math and science, the challenges tech businesses face in recruiting employees with solid math credentials, and the remedial math now required at the UW to overcome the knowledge deficit of incoming freshmen.

And he identifies one source of the problem.

...critics say, when it comes to math and science education, Washington has been watching the grass grow, in part because changes in the teacher-pay policy have been resisted by the politically powerful Washington Education Association, the teachers' union.

...Given the shortfalls in funding and teachers, experts say it's important to narrowly focus policy prescriptions. One of the cheapest, quickest and most laserlike ways to remedy the shortage of math and science teachers and pump up student performance is to pay salary premiums to those teachers, especially in high schools.

Yet, as we've written here, the union balks at even modest pilot programs designed to strengthen math and science education.

Read the whole story. And remember that if we're going to continue to have a strong tech sector in this state, lawmakers will have to put the interests of students ahead of those of the WEA.

MORE Liv Finne of the Washington Policy Center has an op-ed in The News Tribune today proposing other reforms to address the shortage of qualified math and science teachers. (h/t Jason Mercier)

Seattle Times Examines State Spending

Andrew Garber takes an in-depth look at the state budget in Sunday's Seattle Times. It's an interesting read and a balanced, well-executed analysis of a topic that's usually treated episodically through serial anecdotes about what various state programs mean to different constituencies.

He gets right to the point:

As much as anything, Gov. Christine Gregoire's first term in office is notable for one number: $8 billion.

That's how much state spending has increased since Gregoire, a Democrat, was elected in 2004.

Another way of looking at it: The two-year general-fund budget has jumped 31 percent, to $33.6 billion. That's the largest percentage increase in the past 16 years.

He compares Gregoire's first term with her predecessors back to John Spellman. The piece comes with plenty of charts and graphs, slicing spending by function and object and examining compensation and workforce growth.

Read the whole thing for a clear look at this campaign season's most important issue. Washington Roundtable president Steve Mullin sums up why the budget is a critical concern:

"We will have a multibillion-dollar shortfall to deal with," said Steve Mullin, president of the Washington Roundtable, an association of corporate executives. "That's not open to debate."

And,

"We think it's become clear that the significant increase in state spending over the past four years is simply not sustainable."

For a look at what happens when these warnings aren't heeded, consider what's going on in California as reported in the July 17 Wall Street Journal.

California faces a $15 billion budget deficit and Democrats who rule the state Legislature have proposed closing the gap with a $9.7 billion tax hike on business and "the rich."

The WSJ noted the announcement came as AAA announced its decision to close call center operations in the state, shifting 900 jobs elsewhere, and as Toyota canceled plans to build a Prius plant in Bay Area, opting instead for Mississippi.

The root of the California deficit is too familiar.

What the politicians in California refuse to address is their own overspending. State outlays were up 44% over the past five years, meaning that California is spending at a faster pace than even Congress.

Enough said.

UPDATE Tennessee has attempted to mitigate its budget shortfall with early retirement buyouts. This morning, Gov. Phil Bredesen says it's not going well.

MORE Several readers have asked about the difference between the 31 percent growth in spending cited by Garber and the 33 percent figure commonly cited by Republicans. Here's the difference, as I understand it:  The governor's budget office says the main state two-year budget has risen 31 percent in four years, from $25.6 billion to $33.65 billion. But the Rs counter that when the governor took office, the budget was $25.2 billion, not $25.6 billion. The budget office excludes the 2005 supplemental budget, which the governor signed. The Republicans count all budget growth since the governor took office. Using the $25.2 billion baseline and including the 2005 supplemental yields a 33.6 percent increase.

Either way, as Patrick O'Callahan writes, they're tough numbers.

"Initiative 1029: To the Ballot, the Legislature, or the Court?"

The Secretary of State's decision to accept Initiative 1029 for the fall ballot comes under more scrutiny by the editorial boards. Although the petitions clearly state that the measure is an initiative to the legislature, SEIU - the union backing the initiative - says 1029 was intended to be an initiative to the people. And the Secretary of State says he'll overlook that mistake and let it go to the ballot.

I wrote about it in a column that ran Wednesday in The News Tribune and Herald of Everett. At first, I'd not considered it a topic for WashACE. But now I think it worth mentioning here. So much of public policy in our state comes via the citizen initiative that the processes by which measures reach the ballot cannot be ignored. I'll not re-argue my concerns here. They're laid out in the column.

Here's what some others are saying.

The Seattle Times thinks the secretary made the right decision.

Blogging at Olympia Business Watch, Kris Tefft neatly dissects the arguments.

... handling I-1029 will involve tolerance for irregularity.  If Reed is forced by court order to submit the initiative to the Legislature, that will be contrary to its sponsor's affidavit and the measure would bear a way-off serial number (were this correctly filed as an initiative to the Legislature, it would have likely been called I-409).  But it seems to me those irregularities have less gravity than assuming voters didn't know, or didn't care, about the plain language of what they were signing, a position which effectively removes them from the constitutional equation and reduces them to mere cogs in a sponsor's signature-harvesting combine.

The News Tribune gets it right. As does the Seattle P-I.

More good information at the Evergreen Freedom Foundation in this post by Jonathan Bechtle.

MORE See Kris Tefft's post on another SEIU initiative. This one's intentionally to the legislature. And puts pensions - and taxpayers - at risk.

Health Care Disconnects

An interesting post by Gracie-Marie Turner on the State Policy Network blog. She links to this review of polling data by Karlyn Bowman. Here's a bit of Turner's thumbnail summary:

77% of Americans are satisfied with the quality of their own healthcare, but only 38% say they are satisfied with the country's healthcare.

48% would prefer to maintain the current system based mostly on private health insurance while 41% would replace the current system with a new government-run healthcare system.

It reminded me of these results from a survey Bob Moore and Tim Hibbitts did for AWB in March, 2007.

... 94 percent of voters are covered by health insurance and most of them (87 percent) are satisfied with their coverage. A lot of people in the state get good coverage through plans offered by associations and other member-governed groups. Yet, many voters (70 percent) do not believe that most people in the state have adequate health insurance coverage.

There are legitimate reasons to be concerned about America's health care system. And we all know them. But it's important to remember that for most of us, most of the time, the system works remarkably well. If nothing else, that should alert would-be reformers to be both humble and cautious. There's a great deal at risk.

MORE Pat Muir writes in the Yakima Herald-Republic of another of the "Healthy Washington" forums. Again,

People's highest health care priority is making sure everyone is covered.

How to get there? Well, that's for later.

Health Care Updates

The requirement that all residents of Massachusetts have health insurance has run into problems. A lot of people choose not to buy the policies, possibly because they cannot afford them. The Boston Globe reports that the agency overseeing the "Connector" regulating the state's vaunted health care reform will be setting aside a chunk of money for appeals. (h/t State Policy Network)

The Commonwealth Health Insurance Connector Authority set aside $3.3 million - nearly 10 percent of its $39 million fiscal 2009 budget, which it finalized yesterday - for the 8,000 appeals the board expects to process. In the year that ended June 30, there were an estimated 2,000 to 2,500 appeals, the board said.

One reason for the increase in appeals: The penalty for not having coverage has bumped from $219 to $912.

Oh, and this will make it better.

Also, the board is considering regulations that would set a minimum standard for what kind of coverage individuals must buy, and members said that probably would also raise the price of coverage.

No wonder Grace-Marie Turner writes that "states should exercise caution before following Massachusetts."

Read AWB president Don Brunell's thoughts on Maine's health care fiasco here.

"Another Day, Another List of Business "Bests""

This time it's the annual Inc. Magazine ranking of "The Best Cities for Doing Business."

Coming in No. 14 overall, Tacoma came in first among Washington cities, followed by Bellingham (18), the Tri-Cities (23), Olympia (27), Seattle-Bellevue-Everett (54), Spokane (55), Bremerton-Silverdale (115), and  Yakima (146).

Bragging rights go to Texas, as the cover story by Joel Kotkin and Michael Shires makes clear.

In many ways Texas has become the new Florida, dominating the top of the list. Among the largest metro areas, a remarkable five of the top 12 best places to do business are from the Lone Star State, ranging from Austin (No. 2) and Houston (No. 4) to Ft. Worth (No. 9) and Dallas (No. 12). Among the small cities, Midland, now ranks No. 1, up 10 places from last year. Odessa and Longview, both big gainers, round out the Texas stronghold on the top portion of the list.

Texas' boom reflects solid growth in a variety of industries, from energy and agriculture to manufacturing and trade. "The big difference for Texas is we did not rely on the real estate bubble," suggests Bill Gilmer, a Houston-based economist for the Federal Reserve. "Our gains are based on jobs elsewhere and that has insulated us pretty well."

There's some good news for the Evergreen State, however.

Seattle continued its strong growth, notes economist Paul Sommers, due largely to the success of two companies -- Microsoft and Boeing. These companies have been expanding, providing high-wage jobs, and attracting skilled talent to the area. Another key advantage in this high energy cost environment: the Northwest's prodigious supplies of cheap and clean hydroelectric power. This helps everyone, from people building airplane parts to dot-com firms sucking copious amounts of electricity to run their servers.

Along with the good news, then, come two notes of caution: the continued reliance on the two pillars of the regional economy (aerospace and software) and the eroding energy advantage. As noted earlier, Washington has become less competitive for aerospace since 2003.  And maintaining what's left of our energy advantages may depend on whether I-937 can be amended to allow clean and abundant hydro to meet the increased energy demand.

The Inc. rankings amount to a sophisticated look in the rear-view mirror. Places do well on the rankings because they've shown growth in recent years. The ranking methods are nicely summarized this way.

The index is calculated from a normalized, weighted summary of: 1) recent growth trend: the current and prior year's employment growth rates, with the current year emphasized (two points); 2) mid-term growth: the average annual 2002-2007 growth rate (two points); 3) long-term trend: the sum of the 2002-2007 and 1996-2001 employment growth rates multiplied by the ratio of the 1996-2001 growth rate over the 2002-2007 growth rate (two points); and 4) current year growth (one point).

No pesky public policy considerations to complicate the assessment. Nonetheless, you can infer some clues from the fact that most of the "best cities" are in states that typically show well on other lists that explicitly consider costs, workforce, transportation, and education.

"Best States for Business, CNBC Edition: WA Tied for 18th"

Here's another of the annual business climate scorecards. CNBC's "America's Top States for Business" puts Washington in a tie with New Jersey for 18th place.

The Top 5? Texas, Virginia, Utah, Idaho, and Colorado.

CNBC lays out its criteria fairly well, unlike some other media reports. The analysts look at ten categories: cost of doing business, workforce, economy, education, quality of life, technology & innovation, transportation, cost of living, business friendliness, and access to capital. Washington cracks the top 5 in only one category. We rank fourth in access to capital. The state does, however, do well in technology and innovation (6th) and quality of life (9th).

Of continuing concern, Washington ranks near the bottom on four critically important criteria: cost of doing business (35th), workforce (37th), cost of living (36th), and business friendliness (34th).

As we've said, these rankings vary some and no single study should be considered the last word. But our high business costs have consistently placed us at a competitive disadvantage in national rankings. That's a major reason Washington business leaders look at a looming budget deficit, paid family leave, unemployment insurance issues, and the potential impacts of regional cap-and-trade legislation with concern.

Costs matter. And we're near the top.

State Revenue Collections Below Expectations Last Month

Well, this isn't good news. The July 11 release from the Economic and Revenue Forecast Council shows June revenue collections coming in about $61 million below expectations. The analysis provides more reason for concern than simply June's underperforming revenue collections. Some excerpts:

All revenue categories except for liquor and cigarette sales came in below their forecasted values...

Adjusted for special factors, Revenue Act receipts this period (primarily May 2008 business activity) were 0.6 percent below the year-ago level, the second collection period this year that has shown a decline in adjusted year-over-year growth (adjusted April 11- May 10 collections declined 0.7 percent year-over-year)...

Adjusted Revenue Act growth has averaged only 1.8 percent in the first five months of calendar 2008 activity. This reflects a sharp deceleration from the 5.9 percent average growth in the last six months of calendar 2007 and the 8.9 percent average growth in the first half of 2007...

There has been no improvement in real estate activity. June 2008 real estate tax receipts excluding penaties and interest were 51.8 percent below the year-ago level...

And so on. Chris Mulick's Olympia Dispatch blog reports it this way.

Bottom line, there?s one less month for the state to be rescued by an economic upturn before budget writers have to start figuring out how they?re going to plug a budget hole that isn?t getting any shallower.

While we track the negative numbers, it's worth remembering that, although the sluggish economy has deepened it, lawmakers dug the hole with two biennia of overspending.

What About That $2.7 Billion Shortfall?

On the Washington Policy Center blog, Jason Mercier writes that Governor Gregoire doubts the Senate Ways and Means Committee projection of a $2.7 Billion gap between revenues and business-as-usual state spending. The comments came during an interview on KIRO radio with Dori Monson. (Jason provides the link.)

Without wanting to get between dueling analysts - and, to be sure, we're not, because OFM hasn't offered an alternative budget outlook - we have a lot of respect for the work of the nonpartisan Ways and Means Committee. And, while there certainly a lot of twists and turns yet to be navigated before the governor presents her budget in December, the likely shifts in caseloads, health care costs, and revenues ultimately will be trivial relative to the shortfall.

See this WashACE brief for more detail.

The governor has reinstated the Priorities of Government (POG) process to set spending priorities. That will work best if she similarly commits to containing spending within available revenues. Ultimately the gap, which is probably in the $2.7 billion neighborhood, will be closed. A disciplined use of the POG will close it without a tax hike.

"ETS "Perfect Storm Briefing" Sheds Light on Global Competitiveness Challenges"

TVW carries a July 2 briefing by Dr. Irwin S. Kirsch, one of the co-authors of the Educational Testing Services 2007 report "America's Perfect Storm - Three Forces Changing Our Nation's Future." The report

looks at the convergence of three powerful socioeconomic forces that are changing our nation's future:

• substantial disparities in skill levels (reading and math)
• seismic economic changes (widening wage gaps)
• sweeping demographic shifts (less education, lower skills)

The conference runs for nearly two hours, a long time to watch on your computer. But take the time to watch the nine-minute vide Kirsch to kick off his presentation. It comes on at about 17:58. Even those of us who've grown weary of "perfect storm" analogies will have to agree that the folks at ETS didn't overstate.

The challenges identified are real. They're here. And they're eroding our competitiveness.