Streamlined Permitting for Transportation Projects

The transportation package before the state Senate includes several elements designed to speed the completion of new construction and maintenance projects, including adding a 90 day processing requirement for new construction permits, limiting permit appeals to Superior Court, and exempting maintenance from state and local permits.

This initiative to increase efficiency and reduce costs is mirrored by legislation moving forward out of the transportation committee on the house side. A bipartisan effort spearheaded by Reps. Dave Hayes and Hans Zeiger, working with committee chair Judy Clibborn, has yielded three bills. HB 1219, sponsored by Zeiger and Clibborn, would expedite permitting by exempting the repair or replacement of structurally deficient state bridges from SEPA (State Environmental Policy Act), as well as expediting the bidding process to implement the work. Hayes and Rep. Steve Bergquist have brought forth a related bill, HB 1851, which applies to bridges owned by local governments.  HB 1850,  from Hayes and Clibborn, would exempt certain WSDOT maintenance activities, as well as construction actions undertaken for safety, from local review or permit processes under the Shoreline Management Act.

These efforts to reduce process friction and costs associated with transportation projects are encouraging, as legislators contemplate asking the voters for new tax funds.

The Senate legislation:

http://lawfilesext.leg.wa.gov/biennium/2015-16/Pdf/Bill%20Reports/Senate/5994%20SBA%20TRAN%2015.pdf

The House bills:

http://apps.leg.wa.gov/billinfo/summary.aspx?bill=1219&year=2015

bill=1850&year=2015#documentshttp://apps.leg.wa.gov/billinfo/summary.aspx?bill=1851&year=2015

Washington’s forecasted revenue growth is better than that of the average state

A recent post at TaxVox (the blog of the Urban Institute/Brookings Institution Tax Policy Center) examines state government revenue forecasts fore fiscal years 2015, 2016 and 2017.

State forecasters expect revenue growth to remain sluggish through fiscal year (FY) 2016 according to an Urban Institute analysis of agency reports. In FY17, states project revenue growth will return to its average post-2000 rate but remain significantly below its long term average.
Urban
The chart below shows revenue growth for these five years for Washington’s general fund-state account, as reported in today’s update to the state revenue forecast:
WA
Washington’s revenue growth exceeds the nationwide average in each of the five years. Who’d a thunk our creaky old tax system would stack up so well?
Here’s a link to the TaxVox post: State Revenue Growth Will Remain Sluggish

 

Business costs do matter

The Seattle Times reports that Cascade Designs is moving jobs to Nevada because the cost of doing business in Seattle is too high.

Seattle-based outdoor-gear maker Cascade Designs will move about 100 jobs, roughly one fifth of its workforce, to a new manufacturing and distribution facility in Nevada as it seeks to keep costs down while pursuing growth.

The company said it needs to expand, but doing so in the Seattle area is too expensive. The main reason is increasingly expensive real estate, especially for the space it leases around the city to house its merchandise.

“We’re running out of space in Seattle,” spokesman Martin Maisonpierre said.

But labor costs — recently subject to a minimum wage of $15 per hour — also add up, especially as Cascade competes with brands that rely on cheap overseas labor, Maisonpierre said.

He said the jobs in Reno will pay $10 an hour or more. Many of them will be on the more labor-intensive, less-specialized end of the spectrum.

The complete Times story is here.

 

Catching Up: Youth unemployment and pension policy

I discovered I’d forgotten to post this column from a couple of weeks ago that examines youth unemployment.

In the last decade, the share of employed youth has fallen dramatically and it continues to drop. Nationally, the youth unemployment rate for those aged 16 to 19 years old is about 22 percent. In Washington, that number has approached 30 percent, well above the U.S. average.

 

It doesn’t get much better when we extend the picture a few years. A May report by the Brookings Institution reports an unemployment rate for 16 to 24 year olds of 14.5 percent. Analyst Elisabeth Jacobs writes, “Youth unemployment is one of the most serious economic and social problems facing the United States today.”

My take: the reasons for the rise reflect cultural and public policy dynamics. Please give it a read.

This week’s column – entirely inadvertently – goes to the other end of the age spectrum, those receiving or anticipating pensions in the next few years. It pegs of a pair of recent state Supreme Court rulings that provided some good news for legislative budget writers.

Pension policy can be insidious. Seemingly small benefit changes turn costly over time. That’s why it makes no sense for lawmakers to tamper with established plans. But when they do, they should give themselves a clear out.

 

That’s what state legislators did with two pension enhancements adopted when the economy was more robust. Recognizing that the good times may not always roll, they included language reserving the right to amend or repeal the enhancements. When they exercised that right, public employee unions took them to court. While lower courts held for the unions, the state Supreme Court last week upheld the Legislature’s actions, saving the state billions of dollars in pension costs.

These were sensible decisions. The column looks at them in a bit more detail and closes with a policy recommendation.

 

Governor’s opening bid in collective bargaining: raise wages and raise taxes

Gov. Inslee’s May 17 speech to the Washington Federation of State Employees got rave reviews from those in attendance. No surprise there.

“It’s just clear to me that it’s unacceptable that state employees have gone so long without a general pay increase,” the governor told a cheering crowd of about 500 Federation Policy Committee delegates Saturday (May 17) in Seatac.

The timing, as the union notes, was important.

But the comment took on added weight just days before the start of bargaining at General Government and three of the Federation’s other largest teams: The Evergreen State College Classified Staff, the Community College Coalition and the University of Washington.

While the governor duly noted the financial pressure facing the state next session, he had an answer.

“We are going to recognize the cold hard fact that the state of Washington is going to have to find a way to generate additional revenues to solve this problem.”

“Additional revenue” = tax increases. Not even much of a euphemism anymore.  Makes you wonder if anyone will be negotiating from the taxpayers’ side of the table. In today’s Wall Street Journal, Fred Siegel and Nicole Gelinas point out the long term consequences of unaffordable collective bargaining agreements for New York City.

Mr. Bloomberg said after 2008 that teachers could have raises, but only if they agreed to pay for their health-care premiums and to work more “productively.” The teachers refused.

That the city could not afford raises without equivalent savings is obvious from the de Blasio budget. Mr. de Blasio was able to balance the budget for fiscal 2015 thanks largely to revenue coming in $1.2 billion higher than Mr. Bloomberg’s conservative projections. But the $9 billion net cost of the labor blowout over the next four years—including the cost of similar deals Mr. de Blasio expects to do with the rest of the city workforce—has shot holes in future budgets.

De Blasio wants to borrow to plug the holes, reverting to fiscal practices not seen in NYC in decades.

Obviously a bad idea, like going into collective bargaining sessions to cheers from the people with whom you’re negotiating.

“Day of Action” for $15 minimum wage, union-backed strikes and the risks of urban progressivism

Another day of fast-food “strikes” inspired and promoted by labor unions to set a $15 minimum wage. (KING 5 has video of the Seattle activity.) Josh Eidelson, a former union organizer, writes at Salon about the day’s events.

The actions, which will be announced at a noon press event in Manhattan, were discussed this week in New York at an international gathering of union leaders and fast food workers from dozens of countries, called by the global union federation IUF (International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations). They mark the latest escalation in the showdown between an embattled U.S. labor movement and a fast food industry whose jobs are increasingly prevalent and representative of work in America’s post-crash economy.

The New York Times also reports on the global day of action.

Over the last decade as American labor unions have declined in membership and power, they have increasingly turned to unions in Europe and Asia to help pressure companies overseas to stop battling organizing drives at their United States units. And now the fast food movement, underwritten by the Service Employees International Union, is embracing a similar strategy as it struggles to gain influence with the fast food giants.

“It’s a global economy, so they’re saying, ‘Why not go overseas to make it into a global fight?’ ” said Lowell Turner, a professor of international labor relations at Cornell University. “They’re trying to create a global protest movement.”

There’s nothing spontaneous about these things and never was. In Seattle, with the mayor and city council poised to adopt a $15 minimum over time, the activity might be expected to produce a meh, been there, doing that. But of course, nothing is set yet, so the pressure continues to build.

The Seattle Times has a good video discussion of the Seattle proposal and its likely effects on business, nonprofits and the city’s competitiveness.

As Seattle vies for recognition as one of the nation’s most progressive cities, John Norquist, former mayor of Milwaukee, questions what it means for cities to be the “cradles of progressivism.” He mentions Seattle in passing, but the larger discussion is of most interest. The whole piece – it’s short – is worth reading. His conclusion may surprise you.

In the end, the greatest risks with the new urban progressivism are not the headline-grabbing ones such as a crime increase or stagnant job growth due to a higher minimum wage. What we should be more concerned about is that city officials will relax their fiscal diligence and, instead of negotiating responsibly, allow union leaders to confuse expensive contracts with progressivism.

Fiscal diligence?

 

Here’s another employment chart

Here is another employment chart using data that the Employment Security Department released today. This chart shows employment separately for the Seattle metro area (defined as King and Snohomish counties) and the balance of the state since February 2008, which is the month statewide employment hit its pre-recession peak.

Two Washingtons Recesssion and Recovery

Seattle area employment peaked in August 2008, while employment in the rest of the state peaked in March 2008. From peak to trough the Seattle area lost 117,700 jobs. Peak to trough the rest of the state lost 76,800 jobs. Since hitting bottom, the Seattle area has added 155,600 jobs and now has 37,900 more jobs than at the pre-recession peak. The rest of the state has regained 74,800 jobs and needs to add another 2,000 to regain its pre-recession peak.

Bill Gates on raising the minimum wage: “I worry about what that does to job creation”

So should we all.

Additional comments from Jennifer Rubin at the Washington Post.

 

Minimum wage lessons for Seattle’s $15 won’t be learned by looking at other cities

Earlier we looked at the wrangling over the effects of raising the minimum wage. When theory fails to provide clarity, a look at reality is appealing. So it’s not surprising that the Seattle Times seeks to learn lessons from San Francisco’s highest-in-the-nation $10.74 municipal minimum wage. The Times interviewed economists who have studied the effects, including a founding member of the Union for Radical Political Economics.

“Our data show that an increase up to $13 an hour has no measurable effect on employment,” said Michael Reich, a Berkeley economics professor with the Institute for Research on Labor and Employment.

Still, Reich, whose work has been cited by President Obama in pressing for a higher federal minimum, stopped short of saying there would be no significant impact if Seattle leaders were to raise the minimum wage here to a proposed $15 an hour, a 61 percent jump.

“We have not studied what would happen at $15,” Reich said.

As we pointed out earlier, Seattle’s advocates for a $15 wage are entering unknown territory. The magnitude of the Seattle proposal is significant. Size matters.

And with Seattle contemplating a 61 percent jump, low-skilled employment could drop as much as 18 percent, [Joseph] Sabia [an economics professor at San Diego State University] said.

…“When talking about a $15 minimum wage, you’re going to a level that’s somewhat unprecedented,” said Michael Saltsman, research director for the Economic Policy Institute, which is partially funded by the restaurant industry.

“A 60 percent increase in labor costs doesn’t just wipe out profits at a typical restaurant, it wipes them out four times over,” he said.

Meanwhile, in Seattle, efforts to agree on a wage hike business and labor can support have yet to pay off. If a resolution cannot be reached – or if the compromises are unacceptable to advocates – an initiative is likely, according to the Seattle Times.

The Socialist Alternative party, which helped Sawant pull off her upset win to the council on a $15 minimum-wage platform, has an office in the same Chinatown ID building as 15 Now.

Philip Locker, a national organizer for the party and former Sawant campaign political director, said the goal of the party and 15 Now is to get enough signatures to qualify an initiative.

“There’s no guarantee what the mayor’s committee will recommend or what the City Council will approve. We have to be prepared to go to the ballot if they fail to come up with a strong measure in time.”

King County labor leaders seem to agree, reports Publicola.

…another labor leader and [mayor’s income inequality] committee member, King County Labor Council head David Freiboth, was a little less restrained, suggesting that the labor group will be open to an initiative if business interests on the committee water down the proposal with too many business-friendly exemptions.

Consensus was always unlikely. But now it appears that anything other than “$15 Now” will be unacceptable to the activist base. Regardless of the consequences for low-wage, inexperienced, and young workers.