Washington State House Speaker Frank Chopp Obstructs Workers’ Comp Reform

Updated May 19, 2011

Reform is drastically needed for workers’ compensation in Washington state. Workers’ comp costs threaten to kill the state budget and business, as companies face the prospect of double-digit workers’ comp increases.

That’s been the judgment of this Seattle business-news portal, the Association of Washington Business (AWB), and other business leaders. It might surprise you to learn that most state lawmakers want workers’ comp reform, too.

But debate is being stymied in the Legislature. Bills would continue protections for injured workers without further decimating the state’s operating budget. Plus, reform would give the workers an option to take a lump-sum payment.

Yes, it would be voluntary. The idea is patterned after successful workers’ comp systems in our neighboring state, Oregon, and 43 other states. But reform is stalled. Yes, Washington remains in the Neanderthal Age while the reform ideas are continuing to work in 44 other states.

Why doesn’t common sense prevail?

“It is House Speaker Frank Chopp (D-Seattle) and a group of union and trial attorney supported Democrats in the House who are blocking a vote on voluntary settlements,” writes AWB President Don Brunell.

“Remember, the bill passed the Senate with a bipartisan 35-14 vote,” adds Mr. Brunell.  “Gov. Gregoire, in her press conference yesterday, again called for the legislature to address workers comp and said it is imperative to prevent another round of double-digit rate increases in 2012.”

Not only has Speaker Chopp and the Legislature failed to act in the best interests of the state in workers’ comp reform, state residents face the prospect of a suspension of most state-government services in the near future.

“There are only a few days left in this special session and there is no budget,” warns the AWB president. “What appears to be happening is a stalling tactic by the Speaker until the July 1 deadline approaches and then only leave time to address the budget.  The budget must be adopted by July 1 or state government shuts down.”

The issue has drawn the attention of the state’s largest newspaper – a brilliant Seattle Times editorial entitled, “Speaker Chopp: Who is running your House? | Kate Riley.”

Ms. Riley’s editorial astutely disparages the stonewalling by Speaker Chopp:

“Washington state’s Speaker of the House Frank Chopp is outvoted on much-needed workers’ compensation reform.

“You wouldn’t know it though, because he won’t allow a floor vote on the bill.”

Despite overwhelming support in the Legislature for workers’ comp reform, the newspaper sheds further light on the disingenuous behavior in the Legislature, specifically regarding a reform bill in the House:

“So, House leadership referred HB 2109 to the black hole of the House Labor and Workforce Development Committee. On this issue, it’s a ‘black hole’ because the Democratic majority on the committee is stacked with union-friendly members, including some who are labor officials in their own right.

“According to his bio, Chairman Mike Sells has been the elected secretary-treasurer of the Snohomish County Labor Council since 1976 — the position became full-time in 1998. Of the seven Democrats serving last year, five have 10-for-10 voting records on the Washington Labor Council’s 2010 Legislative Voting Record. One each scored nine and eight.”

So, organized labor is the culprit behind the scenes. The unions would rather see a hike in workers’ comp rates.

That’s unacceptable. What we need is Speaker Chopp’s empathy for Washington state’s overall welfare to accelerate economic recovery. Washington needs a healthy economic environment for the creation of jobs. Let’s join Ms. Riley is demanding a solution. Speaker Chopp: Who is running your House?

From the Coach’s Corner, here are workers’ comp resource links:

AWB: ESB 5566 Will Minimize Sting in Workers-Comp Rates




“Now there sits a man with an open mind. You can feel the draft from here.”
– Groucho Marx


Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Tax Increases Will Cost Washington Businesses, Consumers $6.7 Billion Next 10 Years

July 15, 2010

The well-documented lack of transparency and suspension of voters’ rights by Washington state lawmakers in the 2010 legislative session will soak taxpayers an additional $6.7 billion over the next 10 years, according to a new study by the Washington Policy Center (WPC).

“State lawmakers raised taxes at the worst possible time – in the midst of a recession with record-high unemployment levels,” says Dann Mead Smith, WPC President. “We compiled this report to help give taxpayers a clearer picture of the details and cost for each tax increase.”

The respected think-tank’s study is comprised of 12 pages of data, which includes an explanation of each tax increase and details of how each tax increase encumbers businesses and consumers for the next 10 years.

As it has done repeatedly over the years, the Legislature suspended the protections voters passed in Initiative 960, which required transparency and a two-thirds legislative majority vote in order to hike taxes. The Legislature passed SB 6130, which suspended the voter protections against unwanted new taxes.

“The bill temporarily repeals provisions of voter-approved Initiative 960 until July 1, 2011,” states WPC’s report at www.washingtonpolicy.org. “Washington voters passed Initiative 960 on November 6, 2007.”

The $800 million in new taxes include:

  • Business and Occupation taxes
  • Canceling Real Estate Excise Tax exemptions
  • Increasing taxes for Public Utility Districts
  • Hiking the 911 excise tax
  • Hospital Bed taxes
  • Bottled water, soft drink, beer, candy and gum taxes
  • Tobacco taxes including a 500 percent increase on cigars

“Lawmakers increased total state spending by 43 percent in the last five budget cycles, a period in which state population grew only 11 percent, and inflation increased just 19 percent,” states the Report on 2010 Tax Increases in Washington State.

“By repealing the non-binding advisory votes, lawmakers expected their names would not appear in the official voters’ pamphlet for 2010 next to a description of the tax increases they had enacted,” the study notes. “The purpose of this report is to provide much of the information the public would have received in the official voters’ pamphlet if the legislature had not repealed the public disclosure provisions of Initiative 960.

Well,  if you’re unsure how your legislator voted on taxes and other issues, visit: www.washingtonvotes.org.

Meantime, here’s a tip of the Biz Coach cap to Washington Policy Center for its usual fine work.

From the Coach’s Corner, you might be interested in the results of these polls:

  1. More Voters Say Washington State is Headed the Wrong Way
  2. Big Surprise in Washington State Race for U.S. Senator   

If you want to do something about these tax increases, you might also want to consider these organizations:

I-1053: Critical to Washington State Businesses and Workers


June 10, 2010

Washington state voters face critical decision-making. The success of the state’s economy and job-creation efforts hinges largely on Initiative 1053. Proponents have been working feverishly to qualify I-1053 for the Nov. 2010 ballot. It would restore monetary protections for businesses and all other taxpayers from the perennial chicanery of the state Legislature.

It requires a two-thirds legislative vote for any new taxes. In my view, it insures a higher degree of transparency, which is constantly lacking in the Legislature.

 “Reinstating the supermajority vote for new taxes has never been more important with the very real threat of even more tax increases in the 2011 session – or earlier,” says Don Brunell, president of the Association of Washington Business, which is also known as the state’s chamber of commerce.

“This warning has been confirmed by recent news from Governor Gregoire that a special session may be necessary as the state budget may be in doubt due to lawmakers relying on federal funds that are not likely to materialize,” he adds. 

But it has not yet qualified for the ballot with enough voter signatures.

“With less than a month left to gather signatures some may wonder how many of the initiative campaigns will be successful and qualify for the ballot,” says Jason Mercier, director of the Center for Government Reform for the Washington Policy Center.

“One measure, I-1053, may benefit from news from the Office of Financial Management that the state is facing at least a $3 billion deficit in the next budget,” asserts Mr. Mercier.

“This means lawmakers’ first choice to solve the problem next year may be tax increases unless the voters re-impose for the fourth time the restriction that tax increases require a two-thirds vote,” he warns.

Fourth time? Yes, he’s right – a fourth time. For many years, I’ve been writing about legislative chicanery that has damaged commerce and taxpayers. Every time voters approve restrictions on spending, lawmakers find ways furtively and overtly to circumvent the will of voters.

In 2010, lawmakers suspended transparency provisions and the provisos of I-960, which voters passed in 2007. It mandated tax increases could only be implemented by a two-thirds supermajority vote in the Legislature or upon approval by voters. But then, after the destroying voters’ protections and refusing to require efficiencies in state government, the Legislature passed more than $800 million in additional taxes.

But there is some good news. Sixty percent of voters are in favor of the requirements of I-1053, according to the Washington Poll in May, 2010. In another Washington Poll, More Voters Say Washington State is Headed the Wrong Way.

In a sense, that’s encouraging because the Washington State Office of Financial Management echoes a dire warning about future budget issues that I’ve been giving for what seems like forever.

Its budget-writing instructions for state agencies for the 2011-13 Biennium states:

“A preliminary estimate by OFM indicates that a gap of about $3 billion between expected revenues and basic spending pressures (not including any new programs or policies) will need to be addressed to balance the budget,” according to budget instructions by the state office of financial management ( see page 7 of the document).

“Although stronger-than-predicted revenue growth would help remedy this situation, revenues would need to grow by more than 9 percent per year to make up most of the projected gap, a rate which is unlikely to be achieved,” the authors warn.

From the Coach’s Corner, for more information, here are resource links:

Association of Washington Business – www.awb.org

Washington Policy Center – www.washingtonpolicy.org

Enterprise Washington – www.enterprisewashington.org

More Voters Say Washington State is Headed the Wrong Way


May 24, 2010

Washington state is headed south when it needs to go north. That’s what a larger percentage of voters is saying.

Disapproval ratings have significantly increased over the last six months, according to a new University of Washington poll. In fact, it’s a 16 percent increase in voter disapproval ratings – 44 percent of respondents believe Washington is “seriously on the wrong track.”

The double-digit increase in disapproval ratings – up from 38 percent in Oct. 2009 – was reflected in the nonpartisan academic poll, The Washington Poll. Forty-one percent say Washington is “going in the right direction.” Fifteen percent answered “don’t know.”

Voter opinions appear to coincide with the state’s economy. Sixty-two percent say “jobs/economy” will be the most important issue in the Nov. 2010 elections.

Twenty-seven percent cite healthcare reform as the No. 1 election issue.

Regarding the performance of Gov. Chris Gregoire, 17 percent “strongly approve” and 27 percent “somewhat approve.” But her disapproval ratings as a Democratic governor are higher than her approval ratings. Seventeen percent “strongly disapprove” and 30 percent “somewhat disapprove” of her performance.

Sen. Patty Murray, a Democrat, is favored by 42 percent while 39 percent indicate they’ll vote Republican.

When pitted against potential Republican candidate Dino Rossi, she holds a narrow 44 to 40 percentage lead with a margin error of 3.9 percent. The margin of error in the other contests is only 2.8 percent.

Thirty-five percent favor the income tax initiative on well-to-do state residents. But another 17 percent who lean yes also say they could change their minds, and another 10 percent are undecided. Meantime, 23 percent oppose it. Another 5 percent who lean no, say they might switch. Two percent who are undecided lean no.

Overall, the Legislature received an approval rating of 36 percent but netted a 43 percent disapproval rating.

Conducted in early May, 1,252 registered voters were surveyed in the poll sponsored by the Washington Institute for the Study of Ethnicity, Race & Sexuality at the University of Washington School of Social Sciences.

To view the polling data: statewide, and the party and region.

Certainly, these results are not a surprise. The economy has been worsened by bad public policy. Again in the 2010 session, the Washington State Legislature violated standards of transparency, hiked taxes by $800 million, and failed to take prudent steps to head off another multi-billion dollar deficit in the near future.

What’s needed is reform for good government.

From the Coach’s Corner, to stay current on how state politics affects business, and for a wealth of data and information, visit these sites: www.awb.org, www.businessinstitutewa.org and www.enterprisewashington.org.

How Much of a Hit Will Business Take from WA Legislature?


Updated April 2, 2010

While the Washington State Legislature dallies after yet another week of a special session, businesspeople worry about how they’re going to meet payrolls and pay their taxes.

Most lawmakers are oblivious to the desperate straits of business. They’ve eliminated transparency; suspended The Taxpayers Protection Act, Initiative 960; and they continue their unnecessary spending and taxing. They are unfriendly to employers and unemployment is astronomically high.

The net effect of their behavior: Theft of the average Washingtonian’s economic and political freedoms.

A perfect symbol is the embarrassment over the July 4th celebration near Seattle’s Lake Union. A longstanding fireworks display — a symbol of our freedoms — was in doubt this year because it was announced a sponsor couldn’t be found. Following the sad publicity and a concerted radio promotion begging for dollars, Microsoft and Starbucks each offered $125,000 in matching donations, and then smaller donors stepped to the plate. Thankfully, The Seattle Times was able to report a front page story, Donors save Seattle’s Fourth of July fireworks. Nevertheless, it’s a near black eye for the nation’s 13th-largest market, and still typifies the impact of the downturn from bad government policies.

The Legislature has not been discussing efficiencies to solve its $2.8 billion deficit. Instead, lawmakers have been debating how to raise taxes. They’re in the special session because Senate and House couldn’t agree on whether to hike the sales tax.

Otherwise, the House of Representatives’ version would nail businesses or their sales about $650 million in new taxes. That includes hiking the business and occupation tax by .25 percent on most service businesses to raise $201 million; $76.5 million in sales taxes on custom computer software; and $50.7 million in taxes on mortgages and community banks. The aggregate House tax increases would total $795.3 million.

There are a few differences but the Senate’s tax increases would total$818.2 million.

The good news is that the state’s Tax Freedom Day, April 15, is just around the corner. Coined by the Tax Foundation in 1948, Tax Freedom Day is the date that we stop working for local, state and federal governments. Coincidentally, it’s the deadline for filing federal tax returns.

The Tax Foundation says Washington has the fifth-worst tax situation in the country. In general, “…Americans will pay more taxes in 2010 than they will spend on food, clothing and shelter combined,” according to the Tax Foundation Web site.

Regarding the debate over who pays the most in taxes, Carl Gipson of the Washington Policy Center (www.washingtonpolicy.org), cites an analysis of tax burdens. It’s from the Council on State Taxation (COST) and Ernst and Young.  

“As policymakers continue to exhort the need for businesses to ‘pay their fair share’ in taxes, it might be worth taking into consideration that business paying taxes to play fair is a bit of a misnomer,” he wrote in a recent blog. “Businesses don’t pay taxes. People do.”

Mr. Gipson says businesses do not receive benefits in proportion to their taxes. He asked: “What then, is Washington’s ratio of state and local taxes on benefits versus spending benefiting businesses?”

Not good.

“On the high end (assuming no education spending directly benefits businesses) our ratio is 4.1:1— businesses are taxed 4.1 times as much as they receive in benefits from government spending,” he stated. “The national average is 3.5:1.”

What about including the benefits of education?

“Even when assuming, on the low end, that 50 percent of education spending directly benefits business, Washington is still above the national average at 1.4:1 — the national average being 1.1:1,” he wrote.

“Even though 2009 was in the midst of the Great Recession for tax revenue, in Washington revenues were up 15.2 percent over 2005 levels in the amount collected from businesses and up 17.6 percent in the amount collected in total state and local taxes, which is pretty much along national trends,” he added. “Yet, even with these increases, Washington and most other states are facing the reality of making drastic cuts in spending, raising taxes, or both.”

So, the Legislature still dallies, violates transparency standards, deprives businesses and consumers of The Taxpayers Protection Act, and hikes taxes.

They learned a lesson after the 1993 tax increases, but they’ve forgotten. This Legislature will never be able to tax its way into a healthy economic environment and job creation. It’s time lawmakers head in a new direction, and stop the theft of economic and political freedoms.

From the Coach’s Corner, why don’t you get involved?

Enterprise Washington is an excellent place to start. They’ve got some terrific programs for businesspeople.

Why Not Transparency for Good, Open Government in Washington State?


March 24, 2010

Even after concluding its regular 2010 legislative session and after nearly two weeks of a special session, there is no balanced budget. There are no efficiencies. Worse, there is little transparency about taxpayer assets. The Legislature hasn’t learned to stop chasing ill health.

By extension, it’s clear that Senate Majority Leader Lisa Brown is not passing the transparency test of good, open government. She has failed to spearhead passage of a balanced budget and has largely ignored efficiencies, such as the Opportunities for Washington, recommended by a prominent member of her own party – State Auditor Brian Sonntag.

Instead of focusing on successfully ending the special session, The Seattle Times reports she sent a letter to Washington State Attorney General Rob McKenna demanding that he stop his health-care efforts and accused him of being “far outside the mainstream interests” of the state. But my straw poll of businesses and consumers shows a majority in favor of his position.

Meantime, here’s a news flash: There is furtive, dubious activity under her leadership – everything from secretly raising taxes; gutting The Taxpayer Protection Act, Initiative 960; and passing ghost tax bills. There are no efforts to create a good economic environment and private sector jobs.

Actively highlighting the disingenuous behavior has been Jason Mercier, director of the Center for Government Reform at the Washington Policy Center (WPC), the nonpartisan think tank.

After seeing this TVW video posted on the Washington Policy Blog in which Speaker Brown denies knowing why Mr. Mercier has repeatedly raised concerns about legislative transparency, how could she be so disconnected?

Most state newspapers have commented to no avail, such as The Seattle Times in Gov. Gregoire: Use veto to keep transparency and in The Washington State Senate and the age of hubris.

When Gov. Gregoire failed to honor the request, the newspaper ran this editorial, Governor, Legislature should have kept two-thirds rule on taxes.

Even The Olympian commented in A bad example of legislative ‘transparency’.

There are plenty of other indications about the absence of transparency. How could she not have noticed any of WPC’s analysis? See for yourself at www.washingtonpolicy.org.

Plus, I’ve written numerous Biz Coach columns on the issue.

I cited $65 million in waste in this column, “Will Government Policies Ever Promote Economic And Political Liberty?” State employees are allowed to carry forward and cash out their unused sick leave.

You see, the state paid $65.3 million in unused sick leave from 2007 to 2009. And state workers have received millions of dollars in this budget cycle. This is a perk you will rarely, if ever, see for taxpayers in the private sector.

The largest employer in Washington, 17.6 percent of the workforce, is government. The retail sector is second with 10.8 percent. In the state’s 2009 comprehensive annual financial report, government expenses outgrew revenue.

Another eye-opener in the report: “Governmental activities resulted in a decrease in the state of Washington’s net assets of $2.2 billion.”

Because of the extravagant spending, the gap in unfunded Washington’s retiree health benefits is $7.9 billon.

Meantime, ranking member of the Senate Ways and Means Committee, Sen. Joe Zarelli, has unsuccessfully argued in favor of transparency with Committee Chair, Sen. Margarita Prentice. This TVW video illustrates violations of legislative transparency standards.

All of this employee pork, unnecessary spending, and violations of transparency standards are why WPC is advocating a constitutional amendment for transparency:


THAT, Transparency and public disclosure in the legislative process is vital to a representative democracy.  THAT, At the next general election to be held in this state the secretary of state shall submit to the qualified voters of the state for their approval and ratification, or rejection, a new section amending Article 2, an amendment to Article 2, section 19, and an amendment to Article 2, section 22 of the Constitution of the state of Washington to read as follows:

Article II, new section.  No bill shall be eligible for a public hearing until 72 hours after introduction.  No bill shall be eligible for legislative action of any kind unless it has first been subject to a public hearing in the same session of consideration.  No bill shall be eligible for legislative action on the floor of either house until 72 hours after it has been placed on the floor calendar.  This section may be suspended with two-thirds of the members elected to the house in which it is pending suspend this requirement, and every individual consideration of a bill or action suspending the requirement shall be recorded in the journal of the respective house. 

Article II, section 19. No bill shall embrace more than one subject, and that shall be expressed in the title.  No bill shall be eligible for public hearing or legislative consideration of any kind unless the bill shall lay forth in full the changes to any act or sections of law. Title only bills shall be prohibited.

Article II, section 22. No bill shall be eligible for final passage in either house unless copies of the bill in the form to be passed shall have been made available to the members of that house and the public for at least twenty-four hours, unless two-thirds of the members elected to the house in which it is pending suspend this requirement, and every individual consideration of a bill or action suspending the requirement shall be recorded in the journal of the respective house.  No bill shall become a law unless on its final passage the vote be taken by yeas and nays, the names of the members voting for and against the same be entered on the journal of each house, and a majority of the members elected to each house be recorded thereon as voting in its favor.

BE IT FURTHER RESOLVED, That the secretary of state shall cause notice of this constitutional amendment to be published at least four times during the four weeks next preceding the election in every legal newspaper in the state.

 Let’s have a discussion about WPC’s suggestion. Implementing transparency is the right thing to do and will promote good, open government in Washington state. Stop chasing ill health.

From the Coach’s Corner, courtesy of Enterprise Washington, click here to find your legislators’ phone number and email address.

Transparency and Why WA Unemployment Rate Jumps to 9.5 Percent


March 16, 2010

Universal criticism of the Washington State Legislature’s failure to be transparent is validated once again as the state’s unemployment rate continues to climb – now at 9.5 percent.

The increase stems from another 8,300 lost jobs, including 3,200 in construction and 2,100 in business services.

The timing couldn’t be more symbolic during this national Sunshine Week. The unemployment rate dovetails with the declining transparency at the Washington State Legislature. It’s in a special session to finalize the state budget with seemingly countless tax increases following years of over-spending.

If it weren’t for the watchdog efforts of people like Jason Mercier, Washingtonians would be in the dark regarding the chicanery of the Legislature. Lawmakers have refused to implement efficiencies at the expense of a suffering electorate and business community. They’ve passed ghost tax bills and made many decisions in private, but have not accomplished anything to improve the state’s economy. Mr. Mercier, who is the director of the Center for Government Reform for the Washington Policy Center, has issued countless updates from Olympia.

As a result of the secrecy in passing numerous unnecessary tax increases and other dubious legislation, newspapers across the state are clamoring for good, open government in Washington state.

Here’s a sample:

A bad example of legislative ‘transparency’, Olympian
“In the waning days of the regular legislative session, Senate Majority Leader Lisa Brown, a Democrat from Spokane, claimed the Legislature is much more transparent than it was when she entered the Legislature.  Brown is wrong . . .”

Sunshine and Clouds in Olympia, Kitsap Sun
“The bad news is that public access to information and hearings about legislation has been … challenging. There’s been a flurry of ‘title-only’ bills introduced and set for hearings, sometimes on short notice, and with no timely public information on their content. Members of the public deserve better than that — and if they want to get it, they’d better say so this fall to those who seek to represent them in the Legislature.”

It’s National Sunshine Week, but state’s transparency forecast remains cloudy, Longview Daily News
“Shutting down the Sunshine Committee less than three years after it was formed is as difficult to justify as that legislative exemption from public disclosure. It proved too much for legislators to pull off in the light of day. The Sunshine Committee was taken off the bill’s termination list — less than a week ago. Sadly, that remains this legislative session’s single accomplishment on behalf of government transparency.

State government clings to double standard, News Tribune
“Is it any wonder that city and county officials clamor for relief from open meetings and records laws when they see their counterparts in state government behave as they do? State officials profess a belief in public disclosure. They’re just not sure it always applies to them. Lawmakers in particular hold themselves apart from the state’s sunshine laws. They caucus in secret for any reason and insist that their correspondence is somehow constitutionally protected from public dissemination. They also apparently reserve the right to skip public process in the interests of expediency.”

Public input? Who cares?, Everett Herald
“With increasing audacity, key state legislators are taking control from the people and seizing it for themselves. Amid the difficult process of closing a $2.8 billion budget shortfall, they’ve skirted, waived or ignored the public’s right to know what they’re up to and comment on it.”

And there others we can cite.

Meantime, Mr. Mercier offers some excellent solutions for transparency and the Legislature’s practice of passing ghost tax bills.

“Add the preamble of the state’s public records act to Article 1,” he writes. This would help re-enforce this transparency intent for any wayward court.” (See the preamble about the voters’ sovereignty.)

“Add a new section to Article 2 which would require 72-hour public notification before any bill could receive a public hearing, he adds. “While the requirement currently exists in legislative rules, it is often waived.”

Amend Article 2, Section 19 to prohibit title only bills. No public hearing or vote should occur on a “ghost bill.”

Amend Article 2, Section 22 to prohibit votes on final passage until the final version of the bill to be approved has been publicly available for 24-hours.”

He points out it would not be a stretch for the Legislature to be transparent and give the voters adequate notice before passing bills that affect their livelihoods.

“Florida’s Constitution (Article 3, Section 19) requires a 72-hour public review period for appropriations bills before they can be voted on,” Mr. Mercier explains. “Hawaii’s Constitution (Article 3, Section 15) requires a 48-hour review period before any bill can be voted on for final passage.”

Is transparency too much to ask? No. So, why don’t we tell lawmakers how we feel? Otherwise, the unemployment rate and the economic climate will remain unnecessarily unacceptable. Not to mention the theft of Washingtonians’ economic and political freedoms.

From the Coach’s Corner, here’s a link from Enterprise Washington to find your legislators’ phone number and email address.

How Enterprise Washington Helps State’s Businesses

Feb. 28, 2010

In trying to solve a $2.8 billion budget shortfall, Washington state lawmakers have been debating the wrong issues. Instead of debating whether to increase the sales tax or to eliminate tax exemptions for industries, lawmakers would better serve voters if they dealt with the core issue.

The core issue: Developing a healthy economic climate with public policies that help – not hinder creation of private-sector jobs.

Most businesses have had to significantly cut payroll – 175,000 jobs were lost in two years. However, instead of being good stewards of taxpayer assets, many public officials are frantically looking to spend money and generate more tax revenue. The only jobs the state helps to create are government jobs that exacerbate the economic climate.

Worse, state pensions are 74 percent higher per person compared to the private sector. And the Legislature has failed to fund at least $7.9 billion in healthcare and pension liabilities – a financial time bomb set to explode.

Thirty percent or more of your business headaches are caused by onerous government regulations and taxes.

These and countless other issues hurt the economy.

However, there is hope. At the grass roots level, Enterprise Washington (EW) is an organization effectively clearing the air. They know a strong economy will create jobs in a way that helps the environment.

In essence, the EW folks understand the core issue, and they are recruiting and helping business-friendly candidates get elected to office. I recently met with the group’s principles at their Issaquah office and walked away with favorable impressions. And what’s really neat is that they understand it’s important to be open-minded. They recruit both Democrats and Republicans.

It was refreshing to hear the insights of EW President Erin McCallum.

My sense is that you’ll want to know more about EW. Here are Ms. McCallum’s answers to my questions:

Q: What is your success rate?

A: Since EW’s formation in 2007, there are seven more business-friendly lawmakers in Olympia.  

Five GOP include: Sen. Randi Becker, Reps. Kevin Parker, Jan Angel, Bruce Dammeier and Terry Nealey.

Two Democrats: Reps. Reuven Carlyle and Scott White.

EW was instrumental in five of the seven victories (Becker, Parker, Angel, Nealey and Carlyle).  

In each of these races, EW either identified and recruited the business person or ran a significant independent expenditure campaign that helped educate voters about the candidate who was the stronger champion of the economy and the health and sustainability of Washington’s private sector.

Q: How would you describe your mission?

A: Recruiting, training and electing business-minded state lawmakers. 

Q: You have different organizations under your wing?  

A: Yes we do. EW, the mission is described above and EW’s Jobs PAC which is a 527 political action committee.   There is also a legally separate 501 (C)(3), charitable organization called Business Institute of Washington. It is an educational resource for our communities that helps Washingtonians gain a stronger understanding of the significant role our lawmakers play in establishing laws that govern our state. 

Q: Please describe how they’re structured cohesively.

A: EW is legally organized to influence the outcome of elections in key districts (C-6, membership organization, and a 527 political action committee). EW has established these separate entities to accommodate the different reporting requirements for various political expenditures.

As a result of the economic downturn and what a majority of the public sees as government spending run amok, the current political climate is favorable for pro-business/anti-tax candidates.  Business has an opportunity to capitalize on this shifting political climate during the 2010 election cycle.

Q: Briefly, what is the history of your organization?

A: EW grew out of an old business political action committee, United for Washington. We developed our business model using best practices from business communities in other states, and taking examples from currently successful players in Washington state politics. 

Our research has unveiled that successful special interest groups in Washington state have not been friendly to private sector business for some time.

Q: How would you describe the state of politics in Washington?

A: The political stage was set many years ago for what’s happening in Olympia and state government today. For decades, special interest groups outside of the business community have worked tirelessly in recruiting candidates who will champion their issues and helped get them elected.  Our state’s current political climate augurs opportunity for pro-business candidates – Democrat and Republican, alike. And with the new top two primary, business-friendly Democrats are viable again.

Here are some examples of how other special interest groups operate in our state, and how the private sector community has assisted in bringing them to power:  

Organized labor has done an incredible job in helping to elect candidates to champion their issues in Olympia. Organized labor, with SEIU largely driving the effort, has been effective in politics by winning one race at a time. Their efforts have paid dividends for them on shaping public policy.

Other special interest groups such as the Trial Lawyer Bar, WEA, Firefighters, etc., make sure contributions get funneled to close races, usually to Democrat candidates. When business contributes to both parties (often to gain political access) a significant portion of contributions made to Democrat leaders are transferred to competitive races and used against pro-business candidates. Organized labor has been able to rely on a pro-union majority in both the House and Senate to protect its interests.

Q: How many members or supporters does your organization have?

A: EW currently has about 250 members representing businesses from all across the state in a broad range of industries. This year, we are currently in a drive to double our membership.  Any of you who are business owners and who care about the future of our state, please join us by visiting www.enterprisewashington.org and become a member.

Q: A lot of voters think of business-oriented people as Republicans-only, but you have the vision to be nonpartisan.  Please describe how and why you decided on the nonpartisan approach.

A: Business issues do not necessarily cut clearly across political party lines. Also, given our state’s demographics and increase in population, we recognize that voters in this state are fiscally conservative, socially progressive. With Washington state’s two political parties tending to lean more to the extreme we look for balance and middle ground.

Q: What’s your criterion for a political candidate

A: Our state is quite diverse, so the ideal candidate can vary quite a lot depending on the location of the district. Having said that we are looking for business people, both employers and more likely employees, who have strong experience in the private sector and can bring their expertise to the state lawmaking process.

Q: What’s on tap for your association?

A: We are in the midst of a $1.6 million campaign for Washington’s private sector and invite everyone in business in this state to get engaged through EW membership. Unlike public employee unions that can collect political contributions through the monthly dues process, EW must appeal to the greater business community, those who have the most at stake, to make our programs succeed.

Please go to www.enterprisewashington.org and become a member today! Through membership, you can help elect more business minded state lawmakers who will understand and support public policy that supports private sector jobs.

Q: What else would you like to add?  

A: The business community has a choice to make: either get involved and help elect more business friendly lawmakers or face steeply higher taxes. EW is the only organization in Washington state that is tackling the political landscape with the goal of making significant positive changes to the makeup of our state legislature.  Democracy is not a spectator sport so join EW today! Having strong elected lawmakers who understand that it’s the private sector that creates jobs and turn builds healthy and happy communities.

From the Coach’s Corner, here’s more on upcoming state-government developments:

To identify state efficiencies and savings, Washington State Auditor Brian Sonntag has announced his performance audit work plan.

Washington State’s Last Chance for Good Government

Feb. 18, 2010

Instead of focusing on economic growth and the creation of jobs, the 2010 Washington state legislative session has largely been a huge disappointment and insulting to business and consumers. That’s mainly because of the bills to increase taxes and violate standards of transparency as disingenuous ploys to balance the budget.

One of the few bright spots: Rodney Tom, a Washington state senator (D-48, Bellevue) understands it’s possible to save money by eliminating an unwarranted state service and going green, too. He’s introduced a bill to eliminate the state printer.

Buried in his bill is this statement: “…printing is not a core state service and would be better handled within the private sector.”

There are other examples of non-core state services, such as the liquor-selling agency that employees nearly 1500 state workers.

Click here for other examples of a bloated state workforce and non-essential services. Per capita, Washington has more employees than California.

A $2.8 billion shortfall is a lot of red ink. The state spending in recent years greatly exceeded the potential revenue pie. There were red flags everywhere. Administrators and lawmakers ignored repeated valid suggestions in order to be good stewards of taxpayer assets. I’ve cited numerous solutions.

Washington’s unemployment rate of 9.5 percent should be a deterrent for tax increases. But it isn’t. Ask the Association of Washington Business (AWB), www.awb.org, about the impact of a proposal to hike unemployment insurance taxes.

Here’s more about the Washington State Legislature’s spending and taxes:

There was a Washington Supreme Court case in recent years over incriminating e-mails in the shell game to circumvent the state’s spending limit.

So, this year we’ve seen a blank, ghost tax bill. That’s right, no text.

We’ve been aghast at the elitist suspension of the transparency safeguards in the Taxpayer Protection Act, Initiative 960, which was passed by voters in 2007.

We’ve seen proposals for sin tax increases as high as 500 percent and a tax on candy, which adversely impacts a heritage employer, Brown and Haley, which has been struggling.

There’s a tax on oil companies that will hurt businesses and consumers. Supporters of the 300 percent increase are either naïve or disingenuous in their claims that oil companies will not pass the tax to purchases at the pump.

And Gov. Chris Gregoire promoted her $605 million in tax increases.

My apologies if there are any omissions. But you get the picture.

The bottom-line: The tax proposals are unwarranted and Gov. Gregoire has an opportunity to exercise a line-item veto of the legislature’s repeal of the two-thirds vote requirement for tax increases.

Language in I-960 includes:

“Our state constitution guarantees to the people the right of referendum. In recent years, however, the legislature has thwarted the people’s constitutional right to referendum by excessive use of the emergency clause . . . The people find that, if they are not allowed to vote on a tax increase, good public policy demands that at least the legislature should be aware of the voters’ view of individual tax increases. An advisory vote of the people at least gives the legislature the views of the voters and gives the voters information about the bill increasing taxes and provides the voters with legislators’ names and contact information and how they voted on the bill. The people have a right to know what’s happening in Olympia.”

In all candor, reporting on the legislature’s excesses is a full-time job – precious time I don’t have in writing business-coaching columns.

Fortunately, the Washington Policy Center (WPC), an authoritative and trusted non-partisan think tank does an excellent job of tracking bills and feeding valuable information to reporters and columnists like me.

“By repealing for two years the non-binding advisory votes, lawmakers that vote for a tax increase will be spared from having their names show up in the voter’s pamphlet next to a description of the tax increases they supported as required by RCW 29A.32.070,” says WPC’s director for government reform, Jason Mercier.

“Short of a change of heart in the Senate, the only thing that can ensure the non-binding tax advisory votes as intended by the voters remains in effect is the governor’s veto pen,” he adds. “The Constitution provides the governor line-item veto authority which means she could approve the two-year repeal of the two-third’s vote requirement while maintaining the non-binding tax advisory vote provision.”

Otherwise, businesses and taxpayers will only have one option – the November elections – which has a precedent in Washington state. That’s the massive voter rejection of incumbents in 1994.

Following widespread protests over massive business-tax increases in 1993, the Washington State Association of County Assessors invited me to advise the 60 assessors on how to get legislative approval to reduce property taxes.  I conducted a special seminar for the assessors. 

It was unprecedented and gratifying when assessors persuaded state lawmakers to reduce property taxes by 4.7 percent in the ensuing 1995 session.

Let’s hope, it won’t get to that point again. You can make a difference by contacting your lawmakers (http://apps.leg.wa.gov/rosters/).

Economic and political freedoms are at-risk.

From the Coach’s Corner, a nonpartisan organization is working behind the scenes and doing something positive – very positive – to insure businesses have a voice:

Enterprise Washington, www.enterprisewashington.org.

I’ve met with the Enterprise Washington folks and I believe they’re nonpartisan, effective and passionate about their work.

Seattle business consultant Terry Corbell provides high-performance management services and strategies.