“Levy swap” proposals surface

The Seattle Times has a story about three legislative proposals to reduce reliance on local school property tax levies that emerged on Wednesday:

State lawmakers Wednesday put forth three competing proposals to address part of a court mandate for K-12 education that would reduce schools’ reliance on local tax levies.

The three tax-levy proposals introduced Wednesday … differ, ranging from a new capital-gains tax, to a levy swap between local and state property taxes, and a plan to do more research and determine a way forward next year.

Introduced by Sen. Bruce Dammeier, R-Puyallup, the GOP plan would use a state task force’s recommendations on teacher compensation to set salary levels. It would lower local property-tax levies going to schools while raising the state’s property-tax share devoted to schools by the same dollar amount.

Democratic senators proposed a version of a tax on capital gains that would raise $1.7 billion through 2019 for K-12 basic education. That money would go toward a plan sponsored by Sen. Christine Rolfes, D-Bainbridge Island, to increase teacher compensation — which, like the GOP proposal, comes from task-force recommendations. Those proposals combined would allow for a plan sponsored by Sen. Jim Hargrove, D-Hoquiam, to lower local property-tax levies for most districts.

A third proposal came Wednesday from House Democrats in the form of House Bill 2239, which would create a council to recommend to lawmakers how to implement teacher compensation and funding reforms. The council would issue a report to lawmakers and the governor by Dec. 1, studying how the state’s 295 school districts now use local bargaining agreements and levies to fund teachers.

The proposal, from Rep. Ross Hunter, D-Medina, sets 2016 and 2017 deadlines for lawmakers to implement changes to the levy system and teacher compensation.

On his blog, Rep. Hunter describes how a property tax levy swap might work.

 

February 11–March 10 state revenue collections were $16.7 million greater than forecast

This afternoon the Economic and Revenue Forecast Council issued its monthly Economic and Revenue Update. Here are the key bullets on revenue from the summary:

  • Major General Fund-State revenue collections for the February 11 – March 10, 2015 collection period were $16.7 million (1.6%) higher than the February forecast.
  • Revenue Act collections came in $21.6 million (2.3%) less than forecasted while non-Revenue Act collections came in $38.3 million (38.9%) higher than forecasted.
  • The forecast included a $13.3 million audit payment that did not occur during the collection period but is still expected to occur. Had the payment occurred as expected, collections would have been $30.0 million (2.8%) higher than forecasted.

Here is a chart snipped from the Update showing monthly seasonally-adjusted Revenue Act collections since 2004.

Revenue-Act-Receipts March 15This is the first collections report since the revenue forecast was revised in February.

In the update, it was reported that migration into the state set an all-time high during the March 2014 – February 2015 period, at least as measured by the number of out-of-state licenses turned in by people applying for Washington drivers licenses at the Department of Licensing. During the last 12 months 180,700 out-of-state licenses were turned in to DOL. Here is a chart showing licenses surrendered to DOL since 1983.

Drivers Licenses March 15 This is a clear sign that the economy is returning to normal.

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January employment report shows state gained 18,300 jobs from December to January

The state Employment Security Department issued its employment report for January this morning. There was a lot of good news in this report.

The preliminary estimate is that seasonally adjusted employment in Washington increased by 18,300 from December to January. The estimate of November to December job growth was revised up to a gain 8,900, from the preliminary gain of 7,600 jobs announced in last month’s report. The estimate of October to November job growth was revised up to a gain 8,400 from the previously estimated gain of 5,800 jobs. On top of this, benchmarking to unemployment insurance tax records added 10,000 to the estimate of the September level of employment.

The preliminary estimate of January’s seasonally adjusted unemployment rate for the state is 6.4 percent. The estimate of November’s unemployment rate is unchanged from the initial figure of 6.3 percent.

The January employment report is available here.

The February employment report is scheduled to be released next Wednesday (March 18).

 

Policy Today: Paid Sick Leave

 

In this episode of Policy Today, Kriss and I talk about paid sick leave. We also just published a policy brief on the topic.

New brief: Mandating Paid Sick Leave in Washington

We have a new policy brief today: Mandating Paid Sick Leave in Washington.

Briefly:

  • HB 1356 would require employers statewide to provide a paid sick and safe time benefit.
  • The amount of leave would be dependent on the size of the employer.
  • All businesses with more than four FTEs would be affected.
  • Employees could use three days of paid sick leave before having to document their illness.
  • Anyone (not just employees) could sue employers for violations.
  • The limited economic literature on the impacts of such mandates is inconclusive.
  • Seattle employers report no change in presenteeism even with paid sick leave in place.
  • Small businesses are more likely to be affected by this mandate.
  • Paid sick leave is an additional labor cost that, combined with other costs, would make Washington less competitive.

Latest In Focus

 

Above is the latest episode of our In Focus podcast. In it, Kriss and I talk about:

You may subscribe to our In Focus and Policy Today podcasts here.

Teenagers, athletes, and the minimum wage

On Tuesday, the House passed HB 1355, which would increase the state minimum wage to $12. (See our special report for more.) As Jim Camden of the Spokesman-Review notes,

House Republicans tried repeatedly to change the bill, offering 13 amendments for things like lower teen wages, taking a longer look at inflation or varying the wage around the state to account for differences between the boom economy of the Central Puget Sound and high unemployment in some rural areas. Most were ruled outside the scope of the bill by House Speaker Frank Chopp and didn’t receive a vote; the few that did were rejected on partisan splits.

In the Senate, SB 5422, which would allow employers to pay teenagers at a rate of 85 percent of the minimum wage, was passed by the Commerce and Labor Committee last month.

Meanwhile, HB 1930 would essentially exempt the Western Hockey League from state labor laws — including the minimum wage. Washington has four teams in the league, and they are currently being investigated by L&I on child labor grounds. (Here’s some background.) I have no opinion on whether these athletes should be treated as amateurs or employees, but I do think the bill presents an interesting contrast to the teen training wage bill.

HB 1930 was passed unanimously by the House Labor Committee. The Seattle Times quoted House Majority Leader Pat Sullivan:

“Those are students who decide they want to participate in the Western Hockey League, they choose that pathway for themselves,” Sullivan said, later adding: “I think the system actually works pretty well.”

Another Seattle Times story notes,

Some of Washington’s prominent Democratic labor leaders have supported the proposed exemption. Sells, the House Labor Committee chairman, and Labor Committee member Rep. Timm Ormsby, D-Spokane, are among the lawmakers signed on to the bill.

“This is something that will maintain opportunities for our amateur athletes and help them advance their careers,” said state Rep. Marcus Riccelli, D-Spokane, a bill sponsor. “I think it’s a pretty strong collection of folks from those (organized labor) areas who are collectively saying we don’t want to take anything away.”

Six sponsors of HB 1930 and its Senate companion also sponsored bills to raise Washington’s minimum wage.

Seems to be a bit of a disconnect here. If requiring the league to do things like pay the minimum wage would reduce opportunities for the players and hinder their career advancement, what happens to the prospects of non-elite-athlete teenagers if the costs of hiring them rise?

The impacts of a bad reputation

U.S. Labor Secretary Tom Perez talked recently about how a good reputation can trump a good location when it comes to trade. Washington’s ports had enjoyed an advantage due to their location as a good access point to and from Asia, but the result of the West Coast ports work slowdown may be that that they are seen as unreliable.

Indeed, the Puget Sound Business Journal writes that

The biggest East Coast ports had 10.2 percent more growth than the biggest West Coast ports in the fourth quarter of 2014, compared to a 1.6 percent difference from the year before. . . .

Some of that diverted cargo will never come back.

“With each labor event, some diverted cargo has not returned, and this seems to be the case for some West Coast ports coming out of this most recent contract negotiation,” according to Fitch [Ratings].

Additionally, the story notes,

The Port of Seattle is mostly just a pit stop as goods make their way around the country.

While the Port of Seattle doesn’t track exactly how much cargo shipped through the harbor moves outside the state, most of it is shipped elsewhere, said spokesman Perry Cooper.

When cargo isn’t staying in Washington state, shippers have less incentive to use Washington state ports when others are more reliable.

In a 2013 report, we looked at the competition faced by our ports and noted that

31 percent by value and 13 percent by weight of all goods exported through Washington ports originated outside of the state of Washington.

On the question of how long it will take for port activity to get back to normal, the PSBJ story says, “it will take no more than three weeks to clear backlog at the ports of Seattle and Tacoma.”

The Wall Street Journal writes about one way to get freight moving:

Port terminals are developing new ways to organize cargo at the docks and systems for getting that cargo moving off the docks as quickly as possible. Software developed by a local technology startup called Cargomatic, a sort of Uber for moving cargo around the Los Angeles region, serves as one creative solution.

A chart showing initial unemployment claims in Washington

So far this year, weekly claims for unemployment insurance are running well below last year’s pace.

Initial Claims

The value for the most recent four-week moving average, 7,667, is 1,460 less than the value for the comparable period last year.  The data are available here. (Note that these numbers are not seasonally adjusted.)