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April 2004 • Volume 14, Issue 4

Living Liberty

Legislative Session Showdown: The Good, the Bad, and the Dubious by Bob Williams

W

ell, high noon has come and gone, and just like in the old westerns, all of the characters in Olympia have ridden off into the sunset. But just how did the guys in the white hats do? Did legislators make progress toward liberty and responsible government, or did they leave Washington taxpayers tied to the train tracks? Unfortunately, this wasn’t a great session for taxpayers and lovers of freedom. With 3,961 bills introduced, we couldn’t possibly discuss them all here. Instead, we bring you the following snapshot of the session: The good, the bad, and the dubious. (For more details about any bill you’re interested in, or the voting record of your representatives, visit www.washingtonvotes.org.)

The Good 1. Public health and safety. The session ended with at least one victory for parents and children. HB 2400 passed the House 95-0 and the Senate 40-7. The measure prevents the most treacherous and dangerous sex offenders from using psychiatric programs to avoid serving jail time. 2. Charter schools. Thanks to ten years of hard work on the part of Jim and Fawn Spady, legislators finally approved charter schools. It is a much weaker bill than EFF would have liked, but it’s likely the first step in the right direction. Forty-five charter schools will be permitted to open over the next six years, and we believe advocates will be able to show significant progress in these schools. Unfortunately, the legislation leaves too much control in the hands of the bureaucracy. While some of the new charter schools will be excellent, others will probably be terrible. We will keep a close eye on the project so we can identify successful and unsuccessful practices. In the long run, it opens the door for competition and choice. 3. Internet sales tax. Legislators defeated an internet sales tax. A proposed change in Washington’s sales tax structure would have allowed local governments to directly confiscate money

April 2004

from sales generated through interstate mail orders and online retailers. We hope to host a debate on this and other tax alternatives in the days to come. 4. School levies. Another bad idea was killed when legislators attempted to make it easier to pass school levies by changing the requirement for passage from 60 percent voter approval to a simple majority. Proponents were unwilling to link the simple majority change to a requirement that they hold levy elections only during general elections every two years. 5. Car tab tax. Disagreements among legislators helped the voters. In two initiatives (I-695 and I-776), voters spoke clearly and said they wanted flat $30 car tabs. That didn’t stop legislators from trying to work around the will of the people. Senate Republicans passed a 0.6 percent motor vehicle excise tax as part of a November ballot measure proposed by the Regional Transportation Investment District (RTID). (The three-county RTID already has the authority to levy a 0.3 percent tax, but sought to double that.) The result would have been a $60 hike in tabs on a car worth $10,000. Any change in the district’s taxing ability must first be approved by the legislature, and then approved by the voters in a referendum. Proponents of increased taxes felt voters would be more likely to support higher tabs than a dramatic increase in the sales tax. By a vote of 52-43, the House approved an alternate plan which would have used an odometer tax (per mile) to offset a reduction in the sales tax levy authority of the district. Unable to agree on the plans, or on whether the new dollars would be off-limits for other pet projects, the issued died in session.

The Bad 1. Performance audits. Another session, another opportunity missed. Despite once again passing separate versions in the House and Senate, legislators failed to agree on a meaningful Showdown continued on page 8


Living Liberty

A publication of the Evergreen Freedom Foundation

Letter from Lynn

by Lynn Harsh

For the children?

H

ello, boys and girls. Just a short lecture today before you turn to the task of preparing for your future. And you’d better prepare well, because you’ll need to earn a lot of money. My generation is sucking it up for ourselves and passing the bill on to you. Last fall, for example, Congress voted for the largest federal entitlement program since the1960s. It’s called the Medicare Prescription Drug Act, and you’ll pay through the nose for this program as you start out in your young lives. But if Congress hadn’t passed that act, many politicians might have lost their next election because liberals and some seniors would have been mad at them. So you can see, what choice did they have? The second big thing my generation did was to expand the federal Department of Education. But, really, that was for you. Any fool knows parents aren’t the experts when it comes to educating children. Parents need rules, boundaries and accountability, and the federal government is more experienced in enforcing rules, patrolling boundaries and providing accountability than parents or state legislatures. Like I said, any fool knows this! And I’m sure you won’t mind paying for my Social Security when I’m old enough to collect it. That’ll take three of you. That’s because there is no Social Security “lockbox,” so the money government has been taking from my paychecks over the years to pay for my old age has already been spent by Congress on other stuff. Some legislators here at home are generous with your future earnings as well. They passed bills this year that commit you to supporting a particular big private business for decades to come, while ignoring the plight of tens of thousands of small businesses. Lawmakers said it was really for the best, because it will preserve jobs for my generation and will set up jobs for you in the future. Never mind that it robs capital from you and ignores the rules of how free-market economies actually work. But Rep. Dunshee from Skagit County was thinking about you when he created the Apple Award Grants. He set aside $100,000 this past month in the emergency supplemental capital budget to give public elementary students in four schools $25,000 to spend. This is how it works:

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If your school has the greatest combined average increase in the percentage of students meeting the fourth grade WASL standards in 2002-03 and 2003-04, you get $25,000, along with three other top schools. You students can tell the grownups how you want to spend the $25,000. That’s right! The law says the “grants shall be used for capital construction purposes as determined by the students in the schools.” In fact, you don’t even have to spend it at your school. You can build any construction project you want, as long as it doesn’t go outside your county. If I were you, and since this was in the emergency budget, I’d demand an end to one of the biggest emergencies in school— boredom! I’d install a video arcade and 72" flat screen TVs (for watching educational documentaries, of course). Or you could lease your own McDonalds’ franchise for the lunchroom. Oh, and there’s more emergency spending that might interest you. Lawmakers decided last year that your parents ought to pay for prenatal care for illegal aliens. This year they decided, if the illegal aliens live in Yakima County, your parents ought to pay for a quarter of a million dollars worth of family planning for them, too. Apparently this is so they will have less prenatal care costs. Just think, by the time you become taxpayers, this idea might spread to the other 38 counties. Some legislators truly believe it is their duty to redistribute wealth from people who have “more than they need” to people who have “less than they need.” They believe it is their job to define what this means. Other lawmakers do not believe redistributing wealth from one person to another is their job, but they vote for it anyway, because they think it is their duty to get re-elected. Or because they’re busy and don’t realize that’s what they keep voting for. Besides, boys and girls, there’s this thing called “compromise,” a word you’ll learn a lot about as you grow up. To get something for citizens that will protect their personal liberties and pocketbooks usually means a legislator has to give in to colleagues on other things they really don’t like. Then the issue is who’s winning the most in the compromise: the big-government folks or the lovers of limited government. Right now the big-government folks are winning, and betting your future earnings and personal liberties on their plans. If you don’t like this, perhaps you can persuade your parents to stop voting for nice people who say all the right things at home, and then vote to mortgage your future when they sit under the Big Domes in Olympia and Washington, D.C.


April 2004 • Volume 14, Issue 4

Q

uote

of the month

“It’s embarrassing. We had a paralegal who did bad research.” – City Manager David J. Norman explaining why the city of Aliso Viejo, California, almost banned dihydrogen monoxide (H20, otherwise known as “water”) due to its perceived health risks.

Living Liberty

Contents 1 Legislative session showdown Well, high noon has come and gone, and just like in the old westerns, all of the characters in Olympia have ridden off into the sunset. But just how did the guys in the white hats do?

4 New ideas about school construction Some of the world’s most brilliant leaders, entrepreneurs and scientists have been educated in decrepit surroundings, places we modern Americans would scarcely be proud to call a school. It’s a simple reminder that what goes on inside the walls of a school is far more important than the condition of those walls or who builds them to begin with.

5 Tort reform The following is a letter we received from Marilee Koewler. She and her husband, Tom, are medical professionals, but will be leaving the state due to the rising costs of medical malpractice insurance and taxes.

6 The new meaning of “emergency” Evergreen Freedom Foundation PO Box 552 Olympia, WA 98507 (360) 956-3482 Fax (360) 352-1874 info@effwa.org • www.effwa.org Living Liberty is a publication of the Evergreen Freedom Foundation.

Editors:

It used to be supplemental state budgets were reserved for times of emergency, when unforseen circumstances created immediate needs midway through a twoyear budget cycle. Well, no more.

7 Sold and closing If people like me with a reasonable allotment of talent and capital cannot make it, what does that predict for other business owners?

9 Public employment continues to grow Contrary to statements from various officials that state employment has decreased over the past year, overall employment in 2003 actually increased by 444.5 fulltime equivalent (FTE) positions.

Lynn Harsh Marsha Richards

Publisher: Joel Sorrell EFF’s mission is to advance individual liberty, personal responsibility, and limited and accountable government.

Nothing in this publication should be construed as an attempt to aid or hinder the passage of any legislation.

Don’t miss EFF on the radio April 5, 12, 19 and 26! An EFF staffer will give an update on the week’s hot issues each Monday at 8:30 a.m. on the Mike Siegel Show, which airs on KTTH - 770 AM in Seattle and surrounding areas.

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Living Liberty

A publication of the Evergreen Freedom Foundation

responsibility for the operation and/or financing of non-core activities to the private sector.” In the past seven years, 33 new schools have been opened in Nova Scotia using this type of leasing system. Some of the world’s most brilliant leaders, entrepreneurs and scientists have been educated in decrepit surroundings, places we modern Americans would scarcely be proud to call a school. It’s a simple reminder that what goes on inside the walls of a school is far more important than the condition of those walls or who builds them to begin with. Yet we have burdened public school administrators with the task of putting up buildings, when we really need their focus to be solely on what’s going on inside those buildings. If we look around the country, and especially at our neighbors to the north in Canada, we see that providing and maintaining proper educational facilities can be done better, faster and cheaper than we do in our state. A decade’s worth of observation and data tell us, when properly planned, schools constructed using public-private partnership arrangements have amazing results. Typically the structures are built in less time for less money. They can serve as a multipurpose anchor for an entire community and can enhance the local economy. Some even involve parents directly and daily in their children’s education. This is exactly the type of innovation we need in Washington state, where according to some education experts (not necessarily us), more than 80 percent of our schools need to be renovated or rebuilt. In years past, many schools were built with timber revenue from state trust lands. This source of revenue has shrunk considerably, providing for less than 12 percent of school construction costs. New

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plans are on the table which will increase this percentage through increased timber harvests; still, the traditional revenue sources of timber sales, taxes and borrowing won’t be enough. We need to get more value for every dollar spent, and some common-sense ways exist to accomplish this. Municipal/Capital Lease With a municipal/capital lease, a private party constructs a facility that it will own for a typical period of 25 years. A school district leases the building and may purchase it from the leaseholder for a nominal price at the end of the contract agreement period. This method works well for facility renovation, too. In 1996, Texas changed its laws to allow then-Houston superintendent Rod Paige to negotiate with a private contractor to build two high schools. The company completed the job in less time than expected and saved the state and district $20 million. When the province of Nova Scotia faced a declining economy in the late 1990s, officials negotiated with private investors to pay 85 percent of the lease for a school building, and in exchange allowed the developer to retain ownership so it could be used for child-care services, night school, tutoring, and community and religious events. Nova Scotia’s Ministry of Finance said: “The key objective is to enable Nova Scotia taxpayers to get better value for their tax dollars by shifting the

An operating lease is another option. It is similar to the model just described except the lease is classified as security for the developer. The school district may not have the option to purchase the property at a nominal price down the road, though the lease payments can accumulate toward the purchase. This option is estimated to save 10 to 15 percent for a district in the long run compared to the traditional tax-andborrow plan. Service Contract Another model for renovating school facilities is through a service contract with a private contractor. In this way, a school district loses ownership of the property only for a short period of time during renovation. The private contractor takes out a tax-exempt loan for capital costs, interest and services (allowed by the federal government), and the contractor operates and maintains the school during renovation. The best example of this model may be in Greenville County, South Carolina, where officials had planned to spend $1.8 billion constructing and renovating schools over a 24-year period. By using a service contract agreement, the developer completed all 72 projects within four years for a total of $780 million. Satellite Schools A fourth model allows non-profit charitable foundations to house schools in facilities such as malls, airports, corporations and other existing buildings. The American Bankers Insurance Group in Miami-Dade County agreed in 1987 to test this model. Parents who worked at that large facility were encouraged to enroll their children in a school housed in corporate headquarters. Parents loved the idea of having their children in close proximity. Construction continued on page 10


April 2004 • Volume 14, Issue 4

years ago, while attending the MBA program at the University of Wisconsin, I wrote a paper on “The Real Cost of Medical Malpractice” and the costs of

TORT “.REFORM . . medical malpractice premiums have risen from $15,000, to $40,000.” ignoring the problem. I wrote about the dire consequences that would result if changes were not made in our health care system. I believe my predictions have become a reality, particularly in this state since nothing has been done about tort reform.

The following is a letter we received from Marilee Koewler. She and her husband, Tom, are medical professionals, but will be leaving the state due to the rising costs of medical malpractice insurance and taxes. Dear EFF, I understand you will soon be engaged in a tort reform debate. My husband Tom is a physician, and our family will be leaving Washington for the reasons I’ll discuss below. We moved to Everett from Waukesha, Wisconsin, in June 1993. We were escaping high state and property taxes, and a poorly run medical system. Little did we know that almost 11 years later we would be faced with the same problems, but even worse! I have been trying to educate the public about the need for tort reform. Several

Although the need for tort reform was foremost on my agenda, Tom was also concerned about the poor reimbursement rates for Medicare, Medicaid and most insurance. He continued to see more and more patients, work longer hours and earn less money. That, coupled with soaring liability insurance costs, made us realize that we could no longer stay in Washington without major changes in the health care system. When insurance companies lose money, they raise their rates, but that does not hold true for doctors. In less than three years, Tom’s medical malpractice premiums have risen from $15,000, to $40,000. Tom is one of the “rare” family practice doctors who continue to do Obstetrics. Even if we were to stay, Tom said he would stop doing OB. Not only is it a huge liability, it is very time consuming and not cost effective. Tom’s former clinic now requires family practice physicians to be in the hospital from the time a woman enters and is determined to be in “active” labor. Recently

Living Liberty

he missed a whole day of patients and spent 18 hours in the hospital with a patient in labor. Our finances have suffered from high malpractice costs and low reimbursement rates. The only thing we see decreasing is Tom’s income. We have five children, two of whom are now in college. I am led to believe that most people I speak with, and particularly our legislators, do not want to hear the problems in our health care system. The media gives very little attention to this subject, and whenever they do, they let the trial attorneys respond by showing victims of medical malpractice. The public needs to be educated on the facts, and they need to hear that physicians are indeed leaving the state. Our legislators have told me that they do not believe there is a shortage of physicians in Western Washington, and even if there was they believe the beauty of this area will continue to attract the best and the brightest. As long as they believe in their rhetoric, there is no chance for improvement. Our family can no longer wait for Washington State to wake up and enact the changes needed to prevent a total collapse of the health care system. Unfortunately I have learned that many of the people who set health care policy are ineffective because they don’t have enough information, and for the most part are entirely clueless. It would be refreshing to see more physicians and nurses who have tried to live within these insane regulations actually have some input into the legislative process.

EFF HIRES NEW COMMUNICATIONS DIRECTOR A big welcome to Booker Stallworth, who is taking over as EFF’s Communications Director. He’ll be making sure our free-market message reaches the media and many other target audiences. Booker completed a degree in Political Science and Communications Rhetoric at the University of Pittsburgh. He also spent time back east working

with the Allegheny Institute and Oliver North’s Freedom Alliance. When he’s not working, Booker likes to play rugby, hike, and target shoot. Our former communications director, Marsha Richards, will be directing EFF’s Education Reform Center.

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Living Liberty

A publication of the Evergreen Freedom Foundation

The new meaning of “emergency”

I

t used to be supplemental state budgets were reserved for times of emergency, when unforseen circumstances created immediate needs midway through a two-year budget cycle. Well, no more. These days, legislators are in the habit of coming to Olympia regularly and spending money every time they do. Writing a supplemental budget has become a routine part of the “off-year.” This year was no exception. Before heading home, lawmakers approved a supplemental operating budget that will increase state spending by $145 million. This may not sound like much, but the state was already on track to spend $184 million more than it will collect this biennium, and economists warned legislators before session began that they would face significant deficits if they didn’t learn to live within their means. Combined with last year’s overspending and $87 million worth of tax incentives passed this session, the state will now spend $416 million more in this two-year budget cycle than it will collect. As a result, we will be facing a $1 - 2 billion deficit come July 1, 2005. Is this deja vu? As the Evergreen Freedom Foundation discussed just two years ago when legislators were negotiating a supplemental budget, increasing spending or expanding programs in the second year of a budget cycle increases the revenue necessary to continue those programs in the next biennium. The problem gets even worse when lawmakers use one-time money—such as emergency reserves or designated fund transfers—to finance their new purchases. Such was the case again this year, and the state’s reserves have now been drained to $298 million, a mere 1.3 percent of the state’s total budget.

by Bob Williams

• $6 million to build an Employment Resource Center for Boeing. This center may be used to train out-of-state and foreign workers who will manufacture parts of the 7E7 outside our state. • $100,000 to provide $25,000 awards to four public elementary schools whose students saw the highest percentage increases on their WASL scores. Elementary school students get to determine how this taxpayer money will be spent on a capital project at their school or in their community. • $100,000 to create a memorial to the late Willy O’Neil, Jr., an environmental and political activist in Washington state. Is it possible such expenditures were so urgent they couldn’t wait until the regular budget session? Was it truly necessary to increase the state’s debt to fund these capital projects? Perhaps the most important question is: What happened to priority-based budgeting? This common sense approach requires the state to identify and define its core functions, and fund its highest priorities within available revenue. This guarantees more responsible spending within a balanced budget. Unfortunately, the governor and legislators dropped the ball with this year’s supplemental spending increases.

But perhaps the expenditures included in this year’s supplemental operating budget couldn’t be avoided. Perhaps they were emergency needs that couldn’t wait. For example, the provision to spend $250,000 to provide “family planning” 2004 Supplemental Budget Balance Sheet* services in Yakima County to a select group of people. Almost without exception, the individuals targeted by this (All dollars in millions) new expenditure are illegal aliens, a fact confirmed by the 2003-05 forecasted revenue $22,897.3 Senate Ways and Means Committee. The provision is also loosely written, meaning the money could easily be Session tax policy <$86.8> directed to controversial organizations like Planned Parenthood. Expenditures $23,226.8 Emergency? You be the judge. In addition to the $146 million increase in the state’s operating budget, legislators passed a $218 million supplemental capital budget to address what they apparently consider emergency construction needs:

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Difference

<$416.3>

Remaining total reserves

$297.6

*As of 3/12/04 3:47 p.m.


April 2004 • Volume 14, Issue 4

SOLD AND CLOSING by Armen Yousefian

Dear Friends, Colleagues, and others I thought might be interested:

A

s many of you know from my comments and emails the past two years, the hotel industry in the post 9/11 environment is experiencing its worst occupancy and operating conditions in 75 years. The tremendous downturn in travel since 9/11 has put the airline industry in its worst financial situation ever. Lack of travelers means lack of demand for hotel rooms. For my hotel, located in Seattle, with Seattle’s economy at or near the bottom of the nation, and with the Kingdome gone (along with the events and visitors it brought to town), it has been brutal. Revenues in 2003 dropped approximately 50% compared to pre-9/11 levels, and this winter plummeted even more—to only 30% of last year’s same-month sales levels. Simultaneously, as I have written in other emails, businesses in Seattle are under assault by local and state government—in the form of innumerable license fee, payroll tax, and utility rate

I recently had the sad, painful, and difficult duty of informing my employees that most of their jobs will soon be gone. It was one of the worst days of my business career to have to deliver such news to my employees in the midst of an abysmal job market. I will soon be looking for something new to do, as well. I don’t care so much about the money I have lost (compared to what the hotel was worth before 9/11) as I do about the remaining employees who are being put out of work. It’s not their fault that certain politicians I consider corrupt have messed up and overtaxed our local economy to such an extent that a fairly talented and well capitalized businessperson such as myself—if I may say so—cannot keep open a previously profitable business with 65 employees that I successfully managed for 17 years. If people like me with a reasonable allotment of talent and capital cannot make it, what does that predict for other business owners? (Note: my investment group bought the hotel 17 years ago from the U.S. Bankruptcy Court. In the 10 years before my acquisition, the hotel had five owners and experienced three bankruptcies. My ownership has represented the longest stable period in the hotel’s 38-year history.)

“If people like me with a reasonable allotment of talent and capital cannot make it, what does that predict for other business owners?” increases of 25% to 58% or more (editor’s note: see Mr. Yousefian’s article in the February issue of Living Liberty). Given the high inherent fixed costs associated with hotel real estate, and limited opportunities to reduce costs, my hotel’s financial situation became desperate over a year ago. Despite laying off more than half my former 65 employees (reducing annual payroll from $1.2 million to below $600,000), and despite substantial interest rate reductions and payment concessions from my lender, the hotel was losing money at unsustainable rates. This situation could not go on. Recently, I sold the University Plaza Hotel real estate to a developer who is planning to convert the building to another use. The price was millions below what King County valued the hotel at just before 9/11 and based my real estate taxes on. For all practical purposes, the equity in the investment, accumulated over 17 years of reinvesting profits, has been wiped out.

Living Liberty

On the possibly brighter side, I wonder if there is something I will be able to do with the lessons learned and seared into me from this experience, and that can be turned into something positive for all concerned.

It is also disheartening to simultaneously watch local bureaucrats, who have driven many already struggling small businesses to desperation with fee increases, going to great lengths to encourage development in Seattle’s South Lake Union area by changing building height restrictions and potentially spending hundreds of millions of public dollars on new infrastructure. Bureaucrats claim some 20,000 jobs may be created over the next 20 years. Meanwhile, a few million dollars of extra fees are driving small and struggling businesses out of business, or out of Seattle. And, some 96,000 local jobs have been lost in the past three years—a number that continues to grow with new announcements weekly (to which I am now—unfortunately— making a contribution). Armen Yousefian can be reached at ayousoufian@comcast.net or on the web at www.ArmenYousoufian.com.

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Living Liberty

A publication of the Evergreen Freedom Foundation

Showdown contined from page 1 . . . performance audit bill. This failure means Washington taxpayers will lose the significant financial benefits of performance audits for another year. 2. Priority-based budgeting. The governor and legislators abandoned what could have been a session highpoint, and clearly demonstrated that “Priorities of Government” (POG) are not a priority for them. Last year, EFF applauded the governor and his budget team for developing a prioritybased budget model, which identifies the core functions of government and prioritizes activities and programs within available revenue. The consultant who assisted the state in developing the POG model said the supplemental budget would be a test of the commitment of the governor and legislators. He was right, and unfortunately both failed the test. By not sticking with priority-based budgeting, the supplemental Capital Budget degenerated into little more than pork spending, with members getting all sorts of goodies in the form of local “construction” projects. Some of the worst include: a giveaway of more than 200 acres of farmland to the Tulalip Indian tribe to use for a BioGas facility; $350,000 for a gym to serve the Boys & Girls Club in Lake Stevens; $6 million for the state to build an Employment Resource Center for Boeing; $100,000 to give four $25,000 awards to elementary students who saw the highest gains on their WASL scores; and $100,000 for a memorial to the late Willy O’Neil, Jr. 3. School levy lid. It’s going up. Legislators redefined school levy lids so districts can include funds the legislature did not authorize last year for cost-of-living increases and class size reductions, thus raising the lid. However, this artificial increase in levy lids cannot be used for teacher pay raises because the law states that teachers must be paid at the salary

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schedule set by the legislature. Even though it would violate state law, the Washington Education Association will no doubt argue that the additional funds should be used to increase teacher salaries. We will likely see the results of this unfortunate decision in the form of more teacher strikes this fall. 4. Tort reform. Medical malpractice tort reform was killed in the House by Rep. Pat Lantz. We believe this action (and inaction) will cost lives. For example, the high cost of medical malpractice insurance is driving medical professionals out of Washington. There are now only three neurosurgeons left in Pierce County, and none in Thurston County. The high insurance rates are also driving up the cost of health insurance for consumers, forcing many to drop it entirely. 5. Student testing and education performance. Legislators had an opportunity to address low student exam scores by reforming the K-12 testing system and moving to more accurate and reliable “value-added” testing. Instead, they decided students would be allowed to take and retake the poorly-designed Washington Assessment of Student Learning up to four times! If a student fails for the fifth time, he or she can “pursue some alternative path for proving how much they have learned.” The exact nature of the alternative method or methods isn’t specified. If some of Washington’s brightest cannot pass this exam after four or five tries, the real problem is the exam. Lawmakers missed the mark, once again. 6. Teacher strikes. Though some good bills were introduced to prohibit teacher strikes once and for all, they didn’t make it through. By allowing school districts to raise more money with local levies, the legislature has instead given the WEA additional ammunition to make demands. 7. Boeing contract. The failure of legislators to examine more than $4

billion that was signed away to entice Boeing to host its 7E7 assembly in Washington means higher taxes for businesses and individuals. Under the terms of the contract, Boeing does not have to add a single net new job to get the benefits of the package. Meanwhile, the company has cut (that’s right, cut) 3,773 jobs since legislators signed the $3.2 billion tax cut last June. (See article in this issue for more details.) Continued on page 10 . . .

U.S. Supreme Court rules in Washington scholarship case In our December 2003 newsletter, we wrote about a lawsuit filed on behalf of a Washington state theology student who was denied a state scholarship due to the religious nature of his studies. In late February this year, the Supreme Court ruled in favor of the state’s discrimination against religion students. Washington officials justified their discrimination by citing the “Blaine Amendment” in our state constitution, which prohibits aid to religious schools. The amendment was adopted around the turn of the century as part of an anti-Catholic effort to preserve Protestant control of public schools. Fortunately, according to the American Center for Law and Justice, the decision does not impact school choice programs and does not prohibit Washington state from choosing to end its discriminatory practices. It simply says the state does not have to grant scholarships to students majoring in religion. The case was argued by ACLJ’s Jay Sekulow.


April 2004 • Volume 14, Issue 4

Public employment continues to grow

Living Liberty

by Jason Mercier

C

2002 to 104,262.8 in 2003. This upward trend is continuing in 2004.

To measure growth and spending over time, the state compares fiscal years (FY), which run from July 1 to June 30. The numbers show that state employment grew from 103,818.3 FTEs in

Comparing employment trends in 2004 with the same time frame in 2003 shows that FTEs are once again increasing. If this year’s trend continues, 2004 will mark the eighth straight year that state FTEs have increased. State employment has grown steadily since 1997.

State (public) employment growth

ontrary to statements from various officials that state employment has decreased over the past year, overall employment in 2003 actually increased by 444.5 full-time equivalent (FTE) positions.

vious years. Comparing January 2004 to prior years, we see that while state employment decreased in one area (Natural Resources), it still increased overall.

State FTE’s by Sector

Because the number of FTEs fluctuates each month due to seasonal employment, another way to measure current trends is to compare months with their corresponding months in pre-

These employment growth numbers are especially troubling in the context of the supplemental budget legislators just approved. Washington’s current budget now exceeds forecasted revenue by $416 million for this budget cycle. This new spending only exacerbates the deficit for next biennium.

Had they adhered to the priorities of government budget model, legislators would have offset any new FTEs and spending in the budget by reductions in areas of lower priority. This would have allowed taxpayers the security of knowing that future tax increases will not be needed to pay for government growth. Unfortunately, the stage has been set for just such a scene in the next session.

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Living Liberty

A publication of the Evergreen Freedom Foundation

I support Freedom . . . “We believe in EFF. We appreciate their ability to present facts properly. What they say, they can back up.”

John and Idamae Schack (Idamae Schack not pictured) John and Idamae Schack (Idamae Schack not pictured) Construction continued from page 4 . . . Simon Corporation uses it’s non-profit foundation to form cooperative efforts with public schools to use space in more than 15 shopping malls owned by the corporation. We have one in Seattle’s Northgate Mall that specializes in older students who otherwise likely would leave school altogether. Status in Washington state In 1998, the Washington House Task Force on School Construction recommended school districts have the option to acquire facilities with lease/

Showdown continued from page 8 . . .

The Dubious 1. New primary law. The federal courts threw out Washington’s political primary, which allowed voters to choose the candidate of their choice without regard to political parties. Legislators approved a “top two” primary in which the two candidates receiving the most votes in the primary move on to the general election, regardless of their political party. This

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purchase agreements to “provide an option to the traditional construction process by enabling districts to quickly respond to explosive enrollment growth and changing student demographics with fewer up-front costs.” Opposition to this change is fierce. Some believe it opens the door to using public funds for private-sector schooling. Others are adamant that private contractors can only be allowed to build schools if they pay the employee wages established by the state, called prevailing wages. This is

will surprise a lot of voters in November! This bill may be vetoed by the governor before this newsletter reaches you. The House also amended the bill to default to the Montana style primary if the “top two” is challenged by the parties and the courts throw it out. 2. Gambling expansion. For the first time in seven years the legislature expanded gambling by allowing internet and telephone betting on horse races. Lawmakers justified the expansion on

. . . I support EFF current state law, but it is problematic for several reasons, none-the-least of which is that contractors building a school in Pe Ell would have to pay the same wages as if they built a school in Seattle. This is not practical, and it won’t allow money to be stretched farther.

Conflict of interest

State officials should not protect the status quo when it comes to putting up schools. The only concern is to build appropriate, safe facilities that maximize taxpayer dollars and student learning opportunities. Period!

the claim that a share of the gambling funds would go to in-state horse breeders and track owners. Auburn Downs and its 21 off-site betting parlors will now be able to offer betting 24 hours a day, seven days a week on an unlimited number of simulcast races from tracks around the world. This was pushed through the legislature for the sake of “saving jobs.”


Yes, I want to invest in the Evergreen Freedom Foundation April 2004 • Volume 14, Issue 4

Living Liberty

Dear Friend of EFF, While we welcome every gift, our greatest need is reliable monthly support. It is imperative for reaching our goals. Please consider monthly giving as a solid way to invest in the cause of freedom. Our secure Egiving System ensures that more of your contribution goes directly to our work. Cordially, Please mail or fax in this form (fax 360-352-1874) or call 360-956-3482. We will send you a confirmation letter for your records. Bank Debit/Credit Card Donation Authorization I request my bank or credit card company to transfer funds in the amount of $ each month until further notice. I understand that I am in full control of my donation, and that I can decide to make any changes or discontinue the service at any time by calling 360-956-3482 or writing to EFF. I would like to give a one time gift of $ Signature

Date

(required for bank and credit card donations)

Checking Account–Egiving Systems (Attach a voided check) Savings Account–Egiving Systems (Attach a voided deposit slip) Please indicate your preferred withdrawal date: VISA

Master Card

1st Discover

10th

20th

American Express

Your Donations to EFF are Tax-Deductible

Expiration Date:

Credit Card #

Personal Information

Name Address Phone

C

Company City, State, Zip E-mail Please mail or fax in this form (fax 360-352-1874) or call 360-956-3482.

Double or Quadruple your money

D

oes your company offer matching contributions? Many companies offer their employees a matching gift program and will double the money they give to charitable organizations. All that is usually required is for you to send us a form with your check or credit card contribution. We then fill out the “bottom” section to verify we have received it and send it back to the company. Then they send us a matching check! And how about this creative idea from one of our innovative members? He told his like-minded co-workers that he would match their contributions to EFF (up to a certain amount). Anyone who took him up on his offer quadrupled their money because their company matched both employees’ contributions! Please ask your company if it will match your contribution to EFF. We are a non-profit 501(c)(3) organization. All contributions are tax-deductible to the extent allowed by law.

• • • • •

Autodesk Bank of America ExxonMobil Home Depot

• • • • • •

LandAmercia Microsoft Corporation Safeco Insurance Company Verizon WashingtonMutual

For more information please contact Juliana McMahan at (360) 956-3482 or jmcmahan@effwa.org.

11


A few upcoming events . . . April 2 – Everett Bob Williams and Jason Mercier will be speaking at a budget workshop at Snohomish County Council from 7:30 a.m. to 11:30 a.m. in Everett. For more information, please contact Jen Holder at 425-388-3494.

April 5 – Sumner The Puyallup Valley Republican Women’s Club will host Lynn Harsh for a wrap-up on the recent legislative session. Lynn will be speaking from 11:00 a.m. to noon at the Sumner Library. For more information, please contact Colleen Wise at 253-922-6087.

April 6 – Yakima At high noon, the Yakima Rotary will feature Bob Williams for an update on unemployment insurance reform. Please contact Jeanne Montgomery at 360-9563482 for more information.

April 7 – Lacey Lynn Harsh shares her insight on health care with the Panorama City Republicans in Lacey, WA. Lynn will speak from 2:00 - 3:00 p.m. Please contact Orma Bedzis at 360438-5425 with any questions.

April 14 – Seattle Jason Mercier will talk about the state’s deal with Boeing at a meeting of Common Cause. The event begins at 7:00 p.m. at Piecora’s Pizza (14th and E. Madison) on Capitol Hill in Seattle.

Don’t miss EFF on the radio April 5, 12, 19 and 26! An EFF staffer will give an update on the week’s hot issues each Monday at 8:30 a.m. on the Mike Siegel Show, which airs on KTTH - 770 AM in Seattle and surrounding areas.

April 17-18 – Ellensburg The Leadership Institute hosts its Youth Leadership School in Ellensburg. This “bootcamp of politics” shows conservative students how to launch a political career. For more information or to register, contact Tygh Bailes at 1-800-827-5323.

Address service requested


Living Liberty April 2004