Category: 2009 Interim

Crosscut features a thoughtful article by State Rep. Reuven Carlyle (36th District) who proposes a number of ways our current economic crisis might be changed into an opportunity.  According to Rep. Carlyle:

We need to gain the courageous honesty to embrace this crisis, to transform how our state government operates, and to promote meaningful reform. We need to tackle old problems with new energy and spirit. We need to redefine our very definition of “leadership” so we’re not looking for someone to push from the top but to unleash from the bottom. We need bold systems-thinking about structural challenges because our old model of tinkering with the symptoms is no longer working.

He lays out a number of specific proposals in health care, education, tax reform and government reform.   At the core of all of them is a call for deep structural changes in the way government services are provided.  Agree with his proposals or not, the article is sure to spark a lively discussion and is well worth reading.

Tim Eyman’s latest initiative (I-1033) appears likely to qualify for November’s ballot.  The initiative would tie state revenue increases to the rate of inflation plus population growth, with excess money being used to reduce property taxes.   Writing in the Seattle Times, Andrew Garber picks up what is sure to be the flavor of the debate come this fall.

“Our property taxes keep growing faster and faster and government keeps getting bigger and bigger. The people are losing control,” Eyman said at a news conference Thursday.

Critics of the measure say it has serious flaws, will hurt the state’s economy and will make it more difficult for the state to recover from the recession. . .

Opponents compare Eyman’s initiative to Colorado’s Taxpayers’ Bill of Rights, TABOR, which also used a population, plus inflation formula to limit state spending.

That law, they say, led to sharp drops in funding for public schools and higher education. Colorado voters, in 2005, suspended the constitutional limit for five years.

Eyman argues his measure is more targeted because the Colorado law applied to all governments including school districts. I-1033 only affects city, county and state government.

In addition, Eyman’s initiative can be changed by lawmakers with a simple majority vote after two years and the Legislature can try to increase spending above the revenue cap by asking voters for more money.

Signatures still need to be checked, but it appears the number submitted is enough to offset any that are invalid or duplicates.  I-1033 is the only initiative with a chance to qualify for the ballot.

You can read more about the initiative here. 

Thomas Friedman of the New York Times has written a provocative opinion piece on how the United States should be using the current economic downturn to build the foundation for the next great wave of innovation and prosperity.  Key to Friedman’s argument is more funding for basic research, the importance of research universities such as the UW, and using this time to attract highly skilled foreign workers.  Here’s an excerpt (note that the “Barrett” he refers to is former Intel CEO Craig Barrett):

We should be taking advantage. Now is when we should be stapling a green card to the diploma of any foreign student who earns an advanced degree at any U.S. university, and we should be ending all H-1B visa restrictions on knowledge workers who want to come here. They would invent many more jobs than they would supplant. The world’s best brains are on sale. Let’s buy more!

Barrett argues that we should also use this crisis to: 1) require every state to benchmark their education standards against the best in the world, not the state next door; 2) double the budgets for basic scientific research at the National Science Foundation, the Department of Energy and the National Institute of Standards and Technology; 3) lower the corporate tax rate; 4) revamp Sarbanes-Oxley so that it is easier to start a small business; 5) find a cost-effective way to extend health care to every American.

We need to do all we can now to get more brains connected to more capital to spawn more new companies faster. As Jeff Immelt, the chief of General Electric, put it in a speech on Friday, this moment is “an opportunity to turn financial adversity into national advantage, to launch innovations of lasting value to our country

You can read the entire Friedman article here.

Also, last session lawmakers passed a bill allowing foreign professional workers in the state on the H-1B visa mentioned in Friedman’s article to receive in-state tuition rates.

Expect this discussion to become even more prominent in coming months.

While people often focus on the state revenue forecast, the caseload forecast is also a critical piece of the budget picture.  Caseload forecasters predict everything from how many kids will show up at school in the fall to how many people will need state medical assistance.  Today’s update shows increased caseload costs over the new biennium of $250 million from the prior forecast in March.  Officials are hoping to manage the cost increases using a number of spending restrictions issued by Gov. Gregoire last month.  Here’s a story on the caseload forecast from Brad Shannon in The Olympian.

The Office of Financial Management (OFM) has released its annual population estimate and it shows a slowing growth rate.  Chief demographer Theresa Lowe pegs the state population at 6,668,020, with the growth rate slowing to 1.2% per year (down from the 2006 high of 1.9%).  As with everything else these days, the economy is the main reason:

“The continued housing contraction nationwide and poor economic conditions appear to be limiting the mobility of the population usually influenced by labor market opportunities,” Lowe said. “Many job seekers are finding it difficult to sell their homes or to relocate to accept employment at the price of paying two mortgages for an extended period.”

Basic market forces throughout the United States have also reduced immigration, and have resulted in many resident and situational immigrants returning home. Washington has relatively large Hispanic and Asian populations, ranking seventh among the states in the number of Asians and 13th in the number of Hispanic/Latinos. The large in and out flows associated with these populations are affected by present economic conditions, another factor resulting in the slowdown of state growth.

The annual population determinations by OFM are based on actual change in school enrollment, housing, voters, driver’s licenses and other indicator data, and are used to distribute revenues to local governments for public services and transportation. These annual figures are also used to develop and validate population forecasts, which help to anticipate changes in population-driven budget expenditures.

You can read more about the OFM report here.

Adam Wilson of the Olympian is leaving to become Gov. Gregoire’s speechwriter.  He covered state government for the paper, along with political editor Brad Shannon who is remaining.  The paper says it will replace Wilson, but since last year the number of reporters covering the statehouse has been cut by about half.  You can read more about Wilson’s departure here.

The Seattle Times has a story about a new program that could help some students better manage student loan payments.  There are limitations and the program is not for everyone, but according to the article:

The Income Based Repayment program allows graduates to pay no more than 15 percent of their income toward monthly loan repayments. Those with moderate or low incomes will be required to pay much less than 15 percent, and in some cases, nothing at all — at least initially. The program will be particularly helpful to new graduates who have big loans and are entering a tough job market.

The program encompasses federal loans that account for about two-thirds of all student debt. Private loans taken out by students and federal loans taken out by parents do not qualify. If people are already in default on their loans, they won’t qualify for the program, either.

Kay Lewis, director of student financial aid at the University of Washington, said she plans to send a mass e-mail to the 4,100 students who graduated from the UW this year to let them know about the program. She said about half of those students left with loans.

You can read the entire article here.

Welcome —

Unless this is your first time here, you can see that we have updated the State Relations page to make it easier for you to find the information you want (and to make it more consistent with many other UW websites).  Most importantly, the Capitol Record blog has been moved front and center — no more having to click to find it.  We will continue to post news updates from Olympia, along with important information on higher education issues around the nation. 

We have maintained all of the key links from the old site (along with a few new ones) and we will continue to post documents and other resources that provide context for the stories we cover in the blog.  We hope you find the new design more useful and welcome your suggestions on how we can keep you better informed.   Thanks for reading!

Next Monday you will see a new look for the Capitol Update blog. We are changing the design to be consistent with other UW sites, and to provide readers with easier access to the information they want. Rather than have to click through to the blog, it will be front and center on the main page. You will still have access to all of the quick links and resources from the old site as well. If you have our blog bookmarked (and we certainly hope you do), you will be automatically forwarded to the new site.

An article in Maine’s Kennebec Journal has a familiar ring to those who followed recent state budget debates here and around the nation. According to the article:

A critical component of Maine’s long-term economic recovery is investment in higher education. But that’s not where the state has put its money in recent years, a former Maine state economist said Thursday.

Investment in Maine’s colleges and universities is “the most critical thing we can do for the future of our state,” said Laurie Lachance, now president and chief executive officer of the Maine Development Foundation.

But that investment has dropped off during the past few decades as a percentage of state spending, Lachance told Augusta Kiwanis Club members.

In 1968, she said, 18 percent of the state General Fund supported higher education. In 2007, it was down to 9 percent.

People with higher education levels are less likely to be unemployed and are more likely to have high incomes, Lachance said.

You can find the complete story here.