Budget
In 2007 Governor Gregoire proposed and I sponsored legislation that created the “rainy day fund,” a way to save 1% of the state’s revenue during good times so that the money will be available as a cushion during bad times. This was a constitutional amendment, and I’m pleased the voters approved it in the fall of 2007. (Full disclosure – I wrote the voter’s pamphlet text for the ballot measure.)
Washington’s revenue stream is notoriously fickle, with big swings up and down. This bill was a good way to smooth out the bumps and keep the legislature from spending too much when revenues are fat, only to have to make draconian cuts in lean times. I’m glad we have it, but it won’t be enough to make the 2009-11 budget any better than horrific.
This year will be particularly difficult due to the national economic disaster. Unlike the federal government, Washington is required to have a balanced budget. Our budget situation is dire, and will require dramatic measures. This is both a tactical problem of responding to the national economic disaster and a strategic opportunity to re-focus state government on what it’s good at and get it out of the business of things it’s not good at. This budget will be incredibly painful, and will hurt a lot of the people I came to Olympia to champion, but we will do what we have to do to have a sound financial footing for the state. We will come out with a leaner government focused very carefully on our priorities. We’ll prioritize the parts of the budget that are investments in the future like education, and we’ll try our best to preserve the safety net for the most vulnerable: seniors, at-risk kids, and those who are displaced by the crazy national economy through no fault of their own.
In 2008 we also passed legislation creating a web site with full query capability into the state budget. Voters will be able to look at any expenditure and see the detail – who the contract went out to, how much was spent, etc.
Business Climate
I believe we can have a Washington that has a business climate that attracts businesses that pay a living wage to their employees, that are friendly to the wonderful environment in which we live, and that make money for their owners. In 2008 I was the highest scoring Democrat with the Eastside Chamber of Commerce Coalition.
In 2003 I voted to keep an aerospace industry here in Washington, with the thousands of well-paid jobs that go with it. It is critical that we keep Boeing here, but it’s also critical that we have accountability for incentives we provide in our tax system.
Just as we performance audit spending, we should performance audit tax breaks. In 2004 we did just that when we reviewed and renewed the research and development incentives for the high tech industry passed a decade ago.
Over the past few years we have passed a number of similar incentives in the tax code to help develop business competitiveness. As chairman of the Finance committee it’s my job to review proposed incentives to make sure they are needed, well-structured, and appropriately sized. I have a sharp pencil.
The Tax Foundation (the people who bring you “Tax Freedom Day”) rate Washington as the 11th best state business tax climate.
Forbes magazine rates Washington as the 3th best state in the nation in which to do business.
Rep. Ross Hunter, Governor Gary Locke, and Stuart Parker, President and CEO of Targeted Genetics discuss HB 2546
We have choices before us: we can choose to become a low-cost state like Mississippi or Arkansas, or we can choose to try to compete with states like Virginia, Connecticut, Massachusetts and California for high tech and other knowledge dependent businesses. Unfortunately, China has won the low-cost battle already, and I don’t think we want to live in a country like that.
To be competitive with our peer states we must:
- Provide a skilled workforce that meets the needs of business today. The educational requirements are much more extreme than they were a generation ago, with most family wage jobs requiring at least a 2-year degree.
- Allow movement of people and goods on our region’s transportation system. We have developed arteriosclerosis by not expanding capacity as our population has exploded over the past decades. This adds layers of cost and delay that make it difficult to compete.
- Competitive tax system. Our tax system is very difficult for business. They pay a significantly larger fraction of the total tax burden in this state than they do in many others. The impact of the B&O tax on small businesses and startups is particularly problematical. We must address this over the next few years.
- Ease arbitrary regulatory problems. I have voted for a bill every year that would require the governor to review and sign all significant new regulations.
- Invest in the capacity of our research institutions. Many new inventions and businesses are spawned as a result of having high-quality research. We must work to improve the technology transfer capabilities of our institutions, which ranks poorly with other states.
Education
I believe we can have an education system that prepares ALL of the children in the state to be productive players in the economy of the 21st century. This requires a stable and ample funding plan and some structural changes to how the system works to make effective use of both existing and new money.
When I started in the legislature 6 years ago, inflation-adjusted education spending in WA had declined over the last 10 years. We have brought it back close to parity with inflation despite incredible new demands on our children and education system. Dependence on unstable local levy funds has increased significantly in that time. Since I graduated from high school 25 years ago, the percentage of jobs available to a high school graduate has dropped from about 40% to less than 15%, and most of these jobs no longer provide a living wage. Our school system must be able to
- Prepare all children for some kind of post-secondary education. Some will go to 4-year colleges, but many will opt for community college or technical school. Many of today’s children are not prepared for the demands of post-secondary education, and over half need a remedial course in community college.
- Provide the help at-risk children need to be able to graduate from high school. Only about 75% of the children in Washington graduate from high school today. The percentages from some ethnic groups and from children who from low-income households are even lower – as low as 43% for some groups. A system that allows this sentences those children to a lifetime of scrambling for a living, at best. In addition to the moral difficulties in limiting the opportunities of these children they become a cost to society and the economy.
- Make sure that we have room at the inn for all the children graduating from high school. Our university and community college system does not have enough room for the graduating class of 2008, and of the slots available, far to few are in high demand/high wage areas like computer science, nursing, or engineering. Again, this is critical to our ability to function in the economy of the future.
My major effort in 2009 is a complete re-write of the financing system for K12 in Washington. I’ve been engaged in a bi-partisan effort towards this for several years, and we are introducing our plan this year. Read more here.
Health Care
I have never been a detail guy on healthcare issues for a variety of reasons. It’s very, very complex, I spend most of my time focused on education issues, and I, as every legislator, can only think about so many things at once. However, this is changing…
As many of you know, I was treated in the summer of 2007 for a non-Hodgkins lymphoma. The treatment involved a stem-cell transplant and very significant radiation and chemotherapy. I’m fine today, thanks to the great resources available in the Seattle area with the Fred Hutcison Cancer Center and the University of Washington Medical Center. I have a new perception of the difficulty many people face in dealing with our healthcare system. We do not have an adequate system. I’m not convinced we can deal with this at the state level, but the absence of a reasonable way for people to be sure that they won’t lose their house if they have a half-million dollar health intervention like I had is a deep concern.
Transportation
The “nickel and a cent” packages passed in 2004 and 2005 are just starting to create significant construction activities. More lanes are being added to I-405 in our district, and much work is going on in the rest of the state. Of particular interest to us is the improvements being made to the 405/167 interchange in Renton and additional work going on both north and south of us on 405. These will result in congestion improvements for us.
We have more work to do. Our transportation infrastructure was neglected for decades of explosive population growth, particularly here on the Eastside.
On 520 we were able to close on design parameters for the new bridge. It will be 6 lanes from 405 to I5, with four general purpose and two transit/HOV lanes. This is a major win. The Westside is still working on how they want to land the new bridge in Montlake. They have many concerns about the configuration. This largely does not concern us on this side of the lake unless they go outside the design parameters. The rules are:
- 6 lanes.
- Less than $4 billion.
- Does not preclude the addition of additional High Capacity Transit (HCT) in the future.
- Managed for high flow of both traffic and transit. We want to make sure the design is efficient.
The environmental impact statement process is underway now and we will have a preferred alternative at the end of the year. Construction of pontoons is planned to start in 2009 and construction on the Eastside approaches soon after. The bridge will be finished in 2014, with the approaches done in 2016. It takes longer because they try to not close the bridge during construction more than absolutely necessary.
In 2009 we will have to agree on a 520 financing plan. This will involve tolling. My principles on tolling are that the money be used in the bridge corridor for capital costs and not diverted to other expenses. I personally believe that I-90 will need to be tolled as well to avoid huge traffic backups and to keep the toll smaller.
I am increasingly concerned about the lack of coordinated transit planning in King County and the rest of the central Puget Sound. I will be supporting a regional governance plan this year along the lines of what John Stanton and former Seattle Mayor Norm Rice have proposed.
In addition to investing in new road capacity we need to complete the regional transit system. This is a key addition, particularly in our increasingly dense center cities. The more we can help create transit-oriented development around spines in the system the less road congestion we will suffer from. Managing how Sound Transit implements phase II on the Eastside will be a significant effort, and critical to our economy over the next 20 years.
