WashACE Blog

Congratulations are due all around on workers' compensation reform

House Bill 2123, the workers' compensation compromise bill, which passed the Legislature yesterday, and is on its way to Governor's desk, is the result of extreme heavy lifting by the business community, the Governor, and reform-minded legislators. Congratulations are due all around. See this morning's Seattle Times and the News Tribune for the most recent update.

AWB reports in its Fast Facts yesterday that

 House Bill 2123 is expected to prevent double-digit rate increases next year for most employers, in part by allowing for voluntary structural settlements. Organized labor denounced the plan, even though everyone from Gov. Chris Gregoire to House Speaker Frank Chopp – who had been firmly in labor’s corner – called it fair for everyone. 

While it doesn't do everything that we wanted, some success trumps no success...or as Erik Smith writes at the WashingtonState Wire and Richard Davis takes one step further, we're baby-stepping into a full workers' compensation solution. 

Here is a round-up of other reports on the legislature's recent workers' comp compromise:

Lawmakers race special session deadline in Olympia (Puget Sound Business Journal) 

AWB Statement on Workers’ Compensation Agreement (Association of Washington Business) 

Senate, House and governor announce agreement on workers’ comp (The Hopper, Senate Democrats Blog)

Statement from Speaker of the House Frank Chopp on the workers’ compensation reform (HDC Advance, Chopp Statement)

Gov. Gregoire’s statement on workers’ compensation agreement (Governor's Press Release)

Workers’ comp deal: “We have now produced what I consider to be a good system” (Capitol Record, TVW)

Lawmakers reach likely deal on workers' comp (Seattle Times)

WA leaders reach key deal on workers' comp changes (more from Seattle Times) 

Gregoire, legislative leaders reach deal on worker's comp (Political Buzz, The News Tribune)

 

 

Speaker Chopp, Let our legislators go home: Allow the House to vote on workers' comp

Make no mistake, the main thing holding the Legislature in Olympia is Speaker Frank Chopp who, in lock-step with organized labor, is setting the stage for double-digit increases in workers' comp rates. The increases will primarily hit small, locally based businesses in Washington, and the current stand-off in Olympia threatens to require a second 30-day special session.  Here are some of our regulars on the current status of work compensation reform and a budget for the upcoming 2011-13 biennium: 

House should allow vote on crucial reform, Everett Herald, and House should allow vote on workers’ comp reform, The News Tribune, Richard Davis

Something’s About to Give on Worker’s Comp – But What?, Washington State Wire, Erik Smith 

TVW takes a revealing look at Oregon's workers' comp success story, Olympia Business Watch Blog

State preps for July shutdown as budget talks stall, Associated Press, Mike Baker 

Keep our best teachers? It's a "no-brainer."

Partnership for Learning and Stand for Children have sponsored a radio ad in support of HB 1443 that is running on radio stations across the state starting today, Wednesday, April 20. Listen to the ad here and read the text below. Also, read an op-ed in Publicola by Washington Roundtable President Steve Mullin.

Most important, call your legislators and tell them to stand for children. Urge a yes vote for HB 1443. 

Here's the text of the radio ad:

Our schools face some difficult choices: budget cuts and teacher layoffs.

 What do you think matters most when deciding which teachers to lay off?

Seniority or excellence?

It's a no-brainer, right?

Wrong.

When it comes to layoffs and teachers, excellence should trump seniority. But in Washington schools today, pink slips go to teachers with the fewest years in the classroom-regardless of their performance.

And guess what? Students suffer.

Our leaders in Olympia are listening. We say "thank you" to senators from both parties who voted to keep our most effective teachers in the classroom. And we urge House members to vote yes on HB 1443.

Because excellence in our classrooms should matter more than seniority.

Visit GreatTeachersWA.org to learn more and contact your legislators.

 

Analysts compare house and senate budget proposals

The Washington Research Council posted its comparison of the house and senate budget proposals, concluding that the senate version

makes many of the same reductions as the House-passed bill, but it cuts $326.7 million more. The need for deeper cuts is a consequence of not assuming that $300 million would be raised by privatiz- ing the distribution of liquor.

 On the education front, the Partnership For Learning evaluates each of the budget proposals and provides a budget breakdown chart comparing the governor, house and senate's budgets on PFL priorities.

Similarly, the Workforce Training and Education Coordinating Board compares the three budgets for treatment of their key K-12, community college, and workforce education issues. 

 Finally, on the workers' compensation reform front, the procedural move last week to bring SSB 5566 to the house floor for a vote failed, but the bill has been deemed NTIB -- or necessary to implement the budget -- so there is still the possibility of it being part of the final budget solution. 

Continue your calls and letters to your legislators. Tell them to pass a sustainable budget within existing revenues that includes important voluntary settlements for injured workers.

Bi-Partisan Senate budget proposal unveiled

 Senate leaders from both parties released their budget yesterday. It's all still under review, but early reports appear optimistic. The real debate now begins. Here are several stories to get you started:

Senate budget cuts teacher pay, raises tuition (The Olympian)

Senate Rolls Out Bipartisan Budget With a More Conservative Tone, But Has Same Big Pitfall (Washington Wire)

Senate releases bipartisan budget with $4.8 billion in cuts (The Capitol Record)

State Senate proposes even deeper cuts to education (The Seattle Times)

And for those wanting the real deal, here's the technical detail from:

Senate 2011-13 Operating Budget Proposals (Legislative Evaluation and Accountability Program)

 

Freshman Dems propose tax increases on home buyers

Brad Shannon reports this morning on new taxes proposed by freshman Democrats in the House:

Freshmen Democrats in the House introduced a bill that targets favorable tax treatment for large home lenders and out-of-state shoppers. They say it would raise $170 million for K-3 programs in public schools....

...HB 2078 specifically targets first-mortgage interest earnings of banks that exceed $100 million a year and would end tax breaks for out-of-state shoppers. It would raise more than $80 million a year from each tax.

Missing in this representation of the mortgage interest earnings exemption, in particular, is that if the tax exemptions mortgage lenders now enjoy in Washington were eliminated, banks would pass the tax on through to home buyers.

Result: Home purchases become more expensive and Washington's current housing market, which is struggling mightily to recover, takes another hit.

The continuing hew and cry for "closing tax loopholes" is misleading many into believing there is some quick revenue fix for balancing the state budget. But budget challenges in Olympia have been for some time and continue to be due to legislative over-commitment of state taxpayers to unsustainably high spending.  

Richard Davis's blog on the Washington Research Council's tax loopholes paper and  a subsequent Crosscut column explain the role and complexities of tax exemptions in Washington's tax system. 

The News Tribune calls "'Loophole repeal: An imaginary budget solution," saying 

the “loopholes” targeted by the protestors tend to fall into two categories: Expendable but piddly, and potentially lucrative but also justified.

Not everyone in the political environment currently surrounding the budget debate is interested in fully understanding the why's and wherefore's  -- as they say, "you don't want to wreck a good story with the facts!" -- but the information on tax exemptions is available. 

Higher ed funding cuts force rethinking of how we do college

Since higher education is unprotected by constitutional provisions (like basic K-12 education) or by federal program matching (like Medicaid) it is often a prime target for budget writers looking to cut spending. AP reporter Molly Rosbach writes about it here.

Among the changes currently in play for legislative consideration are tuition increases and tuition-setting flexibility at the state's 4-year institutions; accepting more out-of-state students, who pay higher tuitions yet; programs cuts; both cutting and increasing various state aid programs supporting tuition assistance for middle and low-income students; as well as fashioning better systems for moving students more smoothly and more productively through the education system from pre-Kindergarten through college and beyond.

The Greater Seattle Chamber of Commerce continues to advocate  for SB 5915 which grants Washington's 4-year institutions greater tuition-setting authority and the Washington Roundtable recommends that the state: 

...avoid disproportionately large cuts to higher-education funding in the 2011-13 budget, develop a more stable long-term framework for funding higher education and provide institutions with increased tuition-setting authority and operating flexibility, accompanied by clear accountability for results.

Stateline Staff Reporter David Harrison reports on education funding solutions being considered in other states, like three-year degrees in Ohio.

And, community colleges have long provided a less expensive alternative to the first two years of a four-year degree. They typically experience their largest enrollments during recessions when people are out of work and taking the time to get more education or to retrain for a different career. Stateline's Harrison writes on the community college role: 

With unemployment rates still stubbornly high, many laid-off workers now look to community colleges for the training and education they need to find a job. And steep tuition hikes at four-year schools have many high school graduates turning to community colleges as a more affordable alternative. 

 In his report Harrison describes the difficult challenge facing community colleges around the country and links to a helpful interactive map of the 50 states showing each state's community college enrollment and funding compared with the national average over time.

And, because education doesn't begin with college, the College and Work Ready Agenda (CWRA) and the Washington Partnership for Learning both have positive agendas for important solutions necessary in the state's K-12 system, like

1. Performance-based policies for teachers' reductions in force;
2. Alternative pathways to qualify new principals;
3. Mutual consent in teacher hiring policies; and
4. Maintaining our K-12 graduation requirements

...all promote greater efficiency and effectiveness in education spending and should be adopted by the legislature.

The CWRA says:

Whether they choose to attend a four-year college or go directly into the workforce after high school, we want our children to have the tools for success in hand once they have their diploma clasped in the other. The goal of the College & Work Ready Agenda is to ensure all Washington students graduate from high school with a more meaningful diploma that signifies they are ready for their next step in life. 

The Workforce Training and Education Coordinating Board has a side-by-side comparison of the Governor's and House budget proposals, showing how each affects various resources for K-12, workforce, community college, and Higher Education Coordinating Board funding.

We should be able to add the Senate's version soon...stay tuned.

 

 

 

Revenue forecasts reported and discussed around the state

There's a lot of ink being devoted to yesterday's revenue forecast and what it means for the state's 2011-13 biennial budget. Here are links to reports around the state:

AWB's Olympia Business Watch - Don Brunell says:

In light of the forecast, AWB President Don Brunell renewed his call for fundamental change in the way the state provides services to citizens. "What this is really telling is us how fragile our recovery is right now, and that we can't make budget decisions that could potentially hurt our long-term recovery efforts," Brunell said.

Brad Shannon and Katie Schmidt of the Olympian

Jerry Cornfield of the Everett Herald

Katie Schmidt at TNT's Political Buzz

Jordan Schrader at TNT Political Buzz

Austin Jenkins, on TVW's Inside Olympia, interviews Sen Zarelli and Rep. Ross Hunter

Niki Reading at TVW's Capitol Record

Erik Smith at Washington State Wire

The Associated Press in Tri-City Herald

Jim Camden of the Spokesman-Review

Howard Buck of The Columbian

Yakima Herald-Republic Online

Chris Grygiel of Seattle PI.com

Strange Bedfellows Blog at Seattle PI.com

Seattle Times Editorial

Washington Research Council analysis of the revenue forecasts 

And for a peculiar view:

Washington State Labor Council 

 

 

With revenue and certainty down, biennial spending plans should undershoot forecasts

Chief state economist Arun Raha announced this morning that estimated revenues available for the 2011-13 biennium are down an additional $700 million from earlier forecasts.

Governor Gregoire, responding to Raha's report, urged the Legislature to develop long-term budget solutions, avoiding one-time fixes. 

“We can’t rely on short-term solutions,” Gregoire said. “Short-term solutions may cause less pain now, but we need a budget that is both sustainable and long-term.”

WRC President Richard Davis wrote in January that the earlier $4.5 to $5.5 billion budget deficit should more accurately be understood to be about $2.5 billion. This is because the higher deficit estimates include about $2 billion in spending that has never actually been spent...on programs like voter-approved initatives 728 and 732 (class-size reduction and teacher pay). These programs, as well as more recent education finance reforms, are on hold due to insufficient funding. 

Nonetheless, even without counting these items, the budget hole has now deepened to more than $3 billion and there is no reason to believe that future forecasts will improve the revenue outlook. On the contrary, global economic conditions are more likely to contribute to a worsening revenue picture yet. Anticipating continuing reductions in revenue forecasts, Davis wrote earlier this week that lawmakers "should underspend the forecast..." for the next biennium.

We can't afford the government we've created, says Davis. Savings outlined in Thrive Washington papers being produced jointly by the Washington Research Council and the Washington Roundtable provide a roadmap for how to prioritize spending within the budget shortfall that exists.  In dialing back the state's spending commitments we should...after funding those mandated activities like basic education and public safety and health...maintain our commitments to the greatest extent possible to those activities, like higher education and transportation infrastructure, that will contribute to the state's long-term economic recovery.

Ed reforms needed now says U.S. Education Secretary

Washington's education community is receiving some help from U.S. Education Secretary Arne Duncan, who was in town yesterday. The Seattle Times reports on his visit yesterday where he said:

...the state's education system is illogical and has an organization plan that isn't a viable business plan.

Duncan spoke in support of Governor Gregoire's plan for consolidation of the state's education system. Her plan, although receiving only lukewarm reception in Olympia, is still alive because it is considered Necessary To Implement the Budget (NTIB). Echoing Gregoire's earlier messaging on the plan, Duncan said:

...there have been enough studies.

"We have to get better faster. I just want to see the entire country share this sense of urgency," he said.

Duncan's earlier opinion editorial to The Times is here. 

The governor released a policy brief outlining how the state's current education governance structure places a direct million dollar drag on the biennial budget with an additional $100 million annual price tag for taxpayers in underprepared students, remedial coursework, course retaking, and the years necessary for most students to complete a 4-year degree. According to her brief:

Every year taxpayers pay more for students who fall behind, retake grades and grow discouraged. The more important costs are those to our students through higher unemployment and lower lifetime earnings. With the current structure — which operates in individual silos and with no accountability for the entire system — we are not serving students, families and taxpayers well.

Thrive Washington, a joint research series from the Washington Roundtable and the Washington Research Council, also acknowledges the problem in its fifth paper, Consolidation versus Specialization:

Outside OSPI and the challenges of a plural executive, the rest of Washington’s current education system remains similarly disconnected. The governor oversees five other education agencies. In addition, there are four independent boards: the Professional Educators Standards Board, Higher Education Coordinating Board, State Board for Technical and Community Colleges and State Board of Education.

Thrive concludes that:

A reorganized and more streamlined education governance structure could empower the executive branch to eliminate educational “silos” and forge a more cohesive and comprehensive educational plan.

As well, a number of additional education policy bills:

1. Performance-based policies for teachers' reductions in force;
2. Alternative pathways to qualify new principals;
3. Mutual consent in teacher hiring policies; and
4. Maintaining our K-12 graduation requirements

...all promote greater efficiency and effectiveness in education spending and should be adopted by the legislature.