WashACE Blog

Organized labor is out-voted in the House on workers' comp reform...

...but, says Seattle Times Kate Riley, you wouldn't know it because Speaker Chopp won't let the issue come to a vote. In her editorial opinion today, Riley says Speaker Chopp needs to begin representing "all working families" (emphasis in the original) by supporting workers' compensation reforms that spur job creation and economic recovery, not just organized labor interests. She concludes, 

Citizens need lawmakers to step up and make difficult bipartisan decisions that put the state in better stead for a recovery.

Continue your calls and letters to House Speaker Chopp and urge him to bring ESH 5566 to the floor for a vote.

News Tribune gets it right on workers' comp

The News Tribune nails it in its editorial on workers' comp. It says:

Year after year, Washington’s workers’ compensation system has lurched closer to financial collapse – even as the payroll taxes that fund it have escalated relentlessly. Year after year, the Legislature has done nothing about it.

It explains the voluntary settlement provision that labor finds so deplorable:

This proposal came from a Democratic governor, Chris Gregoire, and is supported by Lisa Brown, the Senate’s Democratic majority leader. Forty-four other states, blue and red, already offer the lump sum option; Washington is an outlier in denying workers a choice on the matter.

Pragmatic Democrats have joined Republicans and business leaders in supporting this measure for an excellent reason: It promises to help contain the costs of a system that has long been on an unsustainable trajectory.

And it concludes correctly that:

The House should let its members vote on the measure.

If you haven't already, call your representatives today and tell them it's time to move on workers' compensation reform. It's time to demand a vote on SSB 5566. 

 

More On Wisconsin

In a long look at Wisconsin Gov. Scott Walker's proposals to balance that state's budget, New York Times columnist David Brooks summarizes the important differences between public and private sector unions that help explain and offer context for the current ferocity of public labor:

...public sector unions and private sector unions are very different creatures. Private sector unions push against the interests of shareholders and management; public sector unions push against the interests of taxpayers. Private sector union members know that their employers could go out of business, so they have an incentive to mitigate their demands; public sector union members work for state monopolies and have no such interest.

Private sector unions confront managers who have an incentive to push back against their demands. Public sector unions face managers who have an incentive to give into them for the sake of their own survival. Most important, public sector unions help choose those they negotiate with. Through gigantic campaign contributions and overall clout, they have enormous influence over who gets elected to bargain with them, especially in state and local races.

As a result of these imbalanced incentive structures, states with public sector unions tend to run into fiscal crises. They tend to have workplaces where personnel decisions are made on the basis of seniority, not merit. There is little relationship between excellence and reward, which leads to resentment among taxpayers who don’t have that luxury.

 

UI compromise in the House requires Senate concurrence

Before it can go to the governor's desk for her signature the unemployment insurance compromise reached in the House yesterday must be return to the Senate for its concurrence. According to Washington State Wire staff writer, Erik Smith:

House Speaker Frank Chopp was staring defeat in the face Wednesday when 10 Democrats announced they would vote with Republicans on the year's big unemployment bill. He threatened to adjourn instead. But what emerged after a two-hour standoff was an almost-too-late deal that appears to have settled every major issue. Business gets a tax break and labor gets a big new unemployment benefit. The day appears to have been saved.

Washington Research Council calls it "encouraging" and provides some additional links.

State debt payments squeeze operating budget

With an operating deficit of somewhere between $2.4 billion to $5.5 billion, depending on how you count and who you listen to, legislative budget writers have to accommodate nearly $2 billion in debt payments.

Andrew Garber has a good analysis of the problem in today's Seattle Times. He quotes State Treasurer Jim McIntyre to say we're a "high-debt state". Some, according to Garber, don't think it's a problem and compare our debt levels to national averages or typical personal household debt. Others, including Research Council President, Richard Davis, disagree. Here are a couple of key excerpts from the article:

Richard Davis, president of the Washington Research Council, a business-backed think tank in Tukwila, said comparing state debt with personal debt, or national debt, is not a good idea. Washington's debt is too high regardless, he said.

"It's like if I'm blowing a point-one while I'm driving a car and everybody around me is blowing a point-two," he said, using a drunken-driver analogy. "It doesn't necessarily make anybody feel more secure."

Washington has at least twice the national median in several measures of debt....

Washington's debt has grown faster than population growth and inflation. And it has done so despite laws meant to restrain state borrowing.

 For more on Washington's debt take a look at the Thrive Washington paper,  Nine Steps to Budget Sustainability in Washington State.

 

More on UI Bill Status

Erik Smith reports that six Democrats peeled off yesterday to vote with Republicans on time-critical UI legislation. SSB 5135 would provide employers about $300 million in temporary relief from a scheduled 36 percent increase in UI rates...$300 million that could then be spent putting workers back to work.

It was a major blow for Senate Majority Leader Lisa Brown, D-Spokane, who attempted to exhort her own members with a line that brought chuckles from across the chamber:  “We should not be playing politics,” she said.

Brad Shannon also reports in the Olympian:

Triggering today's fight was Senate Democrats’ move in committee to drop an element of the bill – the extension of federally funded unemployment benefits for those who have exhausted their first 26 weeks of benefits. The state is paying extended benefits to more than 28,000 claimants at this time.

Minority Republicans support the extension, and Senate Democratic Leader Lisa Brown said her caucus is committed to taking up the benefits extension later when the Democrats address other UI issues.

But Republicans weren't having it. They believed Brown's move was a ploy letting the majority party later combine the popular benefits extension with proposals that labor wants and business does not. These include a proposal to take extra money from the state UI fund to pay for additional worker retraining and also to increase UI benefits for jobless families that have child dependents.

And so it goes. Some expect action today; others say Friday. Stay tuned. 

 

UI bill stalled in Senate yesterday

The Spokesman Review reports this morning that an anticipated vote on temporary unemployment insurance relief was delayed yesterday in the Senate. SSB 5135 now caps the social tax for just one year (2011), deferring debate on long-term tax and benefit changes.

Without legislative action, UI taxes will increase this year by 36 percent on average; and this after a job-killing 62 percent average hike in 2010. 

The Seattle Times reported Tuesday that both houses of the legislature need to act and the governor needs to sign their action into law by next Tuesday, Feb 8, in order to avoid another round of sharp tax increases on business.

As AWB President said in a recent column, "A paycheck always beats an unemployment check." Call your legislators today, if you haven't already, and let them know how important their speedy support is on this issue. 

Unemployment insurance reforms require swift legislative action - let them know now

Business groups urge immediate action on important unempllymnet insurance reforms that will provide  tax relief to employers. We wrote about Gov. Gregoire's proposal here. In his column, in the Columbian, AWB president Don Brunell provides both personal and professional persepctive.Read the whole thing - here's the policy crux:

This year, employers are asking the Legislature for relief. They’re requesting a temporary reduction in UI premiums until the economy improves. After recovery, the employers will repay that money into the state’s UI trust fund to ensure our state can pay unemployment benefits without borrowing from the federal government.

...When high UI costs stifle an employer’s ability to create jobs, no one wins. After all, a paycheck always beats an unemployment check.

AWB also provides a useful video primer on the issue here. And a link to the governor's press conference restating her commitment to meaningful reform.

At the Washington Ledge, Austin Jenkins breaks out the divisions between organized labor, which wants to add a new UI entitlement, and the governor and business community, whose focus is on tax relief and job creation. (My characterization, not his.)

Jerry Cornfield at the Everett Herald reports on Boeing's support for the governor's proposal.

More background in t the Seattle Times and the Associated Press.

Last updated January 25, 2011 1:32 p.m. PT

Initial bipartisan support for governor's state of the state priorities....

Looks like the early reviews of the governor's speech range from 3-1/2 to 4 stars. Some of that may be early session caution - there's a lot of time to sort details - and some the natural inclination to maintain a "we're all in this together" tone in the first week. As we've said before, there are no easy options left.

In my column this morning, written before the state of the state, I commend the governor for seizing the mic and framing the debate last week. Over at Olympia Business Watch, AWB president Don Brunell says the governor has set the right tone for the next 100 days.

In the Seattle Times, Andrew Garber notes the contrast with Gregoire's previous state of the state addresses and has these reactions.

Gregoire used her speech Tuesday to review an aggressive agenda for the session that, among other things, would revamp oversight of public schools, reduce pension benefits to save money, cut unemployment-insurance rates, and make users pick up more of the cost of parks and other public services.

...Democrats said the speech was about what they expected, and that it set the right tone.

...Republicans, who have complained over the years that Gregoire increased state spending too quickly when the economy was humming, said they liked the broad outlines of what she's proposing.

For the Associated Press, Manuel Valdes highlights the session frame: There won't be new revenues.

“As they struggle, [citizens'] view of government is pretty clear,” Gregoire said. “They want government to stay focused on its core services, live within its means, and use every taxpayer’s dollar efficiently and effectively.”

And as Peter Callaghan notes in The News Tribune, this week's revenue collection report offers little promise of a swift uptick in tax collections.

Other good stories in the Spokesman-Review and Issaquah Reporter.

Governor delivers state of the state

Gov. Gregoire delivered her state of the state message today, acknowledging the tough times and pledging resolve and optimism.

 

Early coverage in The News Tribune, Capitol Record, and SeattlePI.com.