some of the smartest people around in washington state are at the washington policy center and they have written a memo to the governor and this was back right after the election paul guppy from the washington policy center right here on public exposure paul welcome back to the show thank you when i was wondering as to how we could get a good education as to what is happening in washington state in the legislative session and and just what are the kinds of things that they should be actually the member we call it memo to a new governor and it is just that it's the same kind of business memo you would write for a c e o or for someone in government laying out a direction for their administration as it starts and just to show that we're bipartisan i mean we did this exercise in the summer last year so we knew that washington would have a new governor we just didn't know who that was and so we summarized our best ideas in order to help guide the new administration so before we get too far the washroom policy center is a and by the way we're go to the web site up on the screen throughout the show so we are an independent nonprofit think tank we're based in seattle and we have offices across the state and so we're state based we focus on washington state issues and we try to provide objective data and good ideas and policy recommendations to both for our state government and at the local level but the purpose is to improve the lives of people across the state through good ideas in government and so you are would you be considered right wing left wing middle of the road yeah so we're somewhat on the right you would say on that spectrum i mean we like to stay away from labels but our our orientation is limited government low taxes a good business climate and basically opportunity for working people for families and for small businesses ok well let's get into your top policy recommendations then you had what eight different subject matters right right so this is this reflects a little bit how washington policy center is organized so we have a staff of policy analysts each of them is an expert in a different area what i did actually in again in the summer last year or sent them an e mail that just asked them if you were advising a new governor for our state what would be your top three ideas and we sampled assembled those in eight different policy areas transportation small business health care we c talk about them obviously and then each sort of bullet point or idea is supported by research that we've published in our policy guy and got to tell you and our audience as well as i was looking through in preparing for the show i said there's no way we going to get this done in one half hour show so paul can we do maybe to show share what we already excellent die at the top policy recommendations from the martian policy center to a new governor is number one balance the budget isn't that required any way it is and it isn't so there's the rules and then there's how the rules are applied so yes washington state like most states across the country have a balanced budget requirement and the legislature does technically pass a balanced budget every two years that works fine the problem is that they build in a bow wave of costs coming up in the future so the definition of what public programs are continually expands in fact faster than the tax base and so those costs are built into the next budget so ok we're balanced until the middle of two thousand and thirteen july first is the end of the fiscal year for the state but the next budget is not balanced and so they'll have to deal with that how can they get away with it well because they they met the rule that by july first of this year they're balanced oh i see where they're still talking about right we don't talk about what happens after that and where the increased costs come in now when i was a kid and i was doing chores if i put something underneath my bed and told my mom that my room was clean right she would look under the bit that's is that what you guys are to well that's a great analogy so it's like sweeping the dust under the carpet so the problem hasn't gone away you've just put it off to the future the first part  i guess sub recommendation on your balance the budget is restore the legislators ability to amend collective bargaining agreements and limit collective bargaining to setting wages and benefits is that that big a deal here it is it's a huge crop cost driver for government and that sounds a little technical the collective bargaining agreements people aren't sure what that is so in two thousand and two we embarked on a new road for running state government by having mandatory contracts that are negotiate between the governor and labor unions every year or at some of them are three years and those agreements have a dollar price tag that goes with them so that's all payroll all benefits plus increases plus promotion plus what are called step increases and  people who work in government those are all built into the contract and then that is sent to the lead stage or for a straight up or down vote with no amendments and no changes the original contract is negotiated in secret so this process has been underway for a little under ten years and each time the legislator legislature of both parties are basically surprised by what's in this agreement i mean the governor just announces over the previous six months i've been negotiating with labor you leaders behind closed doors and this is the result and this is the price tag and the legislature really has to take it or leave it so our recommendation is allow the committees allow amendments and the normal public process to be back in to decide what the costs of running running the government are if i were a skeptic i would say this sounds like union busting well the unions might say that actually doesn't affect the unions as organizations at all so that stays the same what's changed is their relationship to the state so from eight hundred eighty nine until two thousand and two we had a certain system for funding the government which is to say that that salaries and payroll benefits health care retirement pensions were all line items in the regular state budget and the legislature voted on that along with all the other programs that we need so a collective bargaining does is take that out just the personnel part and does it in this closed door process as i said as long as public employees have the right to collectively bargain though if this program were adopted what you're suggesting they would public employees would have less rights than their counterparts in the private sector well they would have well they they would have less power so i'm not sure if it's right so i mean they would have less leverage within the system compared to say a private sector union but in the case of private sector unions the agreement is voluntary between management and in the union as to how that's going to go along rouse the collective bargaining law is a law so that's locked in the way it is the other thing is that a private company has to respond to its customers to market forces and so there's a natural discipline that comes in where the union can't just ask for the moon they know that they have to keep the company healthy as well as management or else nobody gets paid whereas in the public sector all the revenue comes from taxes and so there's a more coercive aspect to the same the second part of this is in limit collective bargaining to setting wages and benefits it's essentially saying that you can't strike if you're right isn't that the law already it is and that's a good point it is already the case that public workers are not supposed to strike but they do on rare occasions particularly in education and that is where it's a problem so in marysville in cannes in tacoma even in seattle we've had threatened strikes so as long as that's in item that's available the unions will tend to use that for leverage that's one reason we're why we're calling for this process to be public so that you know we know what the unions are asking for we know what the governor is responding what the different proposals are back and forth at the washington policy center we actually made a public information request to ask for what were the different positions that were offered at the table in collective bargaining you know in secret and you know we were turned down flat we were we were told that there is an exception where the public access laws don't apply to collective bargaining really so that's something we would like to change and point number two in the top policy recommendations for the washington policy center under balance the budget is adopt a constitutional amendment requiring a two thirds legislative vote to raise state or local taxes now haven't the voters voted on this several times they always passed it right times five times you would think that would be a clear message pretty but but in libya that's not the case so starting back it's been twenty years so with initiative six zero one back in the early ninety's the voters approved by pretty good margins  this idea that lawmakers should not increase taxes without a two or three fifths majority and that the purpose of that is to get broad bipartisan agreement before raising taxes so taxes are the last option rather than the first option there's also a rule that any tax increase can pass by just a straight majority of the voters so lawmakers have two choices they can get the three fifths of the super majority with broader agreement or they can just send a measure right to the ballot and then pass it that way every time that was passed the legislature got around it or repealed it sometimes they call it suspending it i just call it repeal it if something's not in effect it's it's repealed so they would create these windows six months or a year in which the requirement was suspended quote unquote they would raise taxes and that in and the restriction would come back on so that happened in two thousand and five governor gregoire how to major tax increase and they suspended the requirement put the taxes in place men would go to the ballot he like this as a pop you know he knows that it's popular and so a few times he had initiatives there were other initiatives but they all add up to five times the state has voted on the three fifths amendment it passed every time we just an did you know again four months ago well i mean so this is an effort to try to and the merry go round people can vilify him and all that they want to and he actually makes himself an easy target right but this was as you say five times  majority of the people in the state of washington voted for it so you know i mean they are not exactly and this is not iman's idea so as you know he picks up ideas that he knows are going to do well at the ballot box that's kind of his method so now he's been criticized as as having you know bumper sticker policies and there's something to that but you know i'll just let him take care of his own projects and here the only thing i'm concerned about is if the people of washington state want reasonable tax limitation and they voted for it so many times having the legislature amend the constitution which also would require a vote of the people again it would end this on again off again policy and we would have one rule now the legislature and the legislative response is not going to be positive to this if they keep suspending it they're not going to agree with you and besides their their position i think is that we can't do government this way where we are straight jacketed right in the event of emergencies for example exactly so this is where the issue becomes a little bit more partisan so all republicans support this idea and there are some fiscally conservative democrats who do as well so if it does have a chance to pass the legislature just to create a rule about raising taxes the other thing i've seen that our budget analyst jason mercy actually went through all the legislative districts in the state and put down the percentage by which this measure had passed so he has a list that he shows to lawmakers which is the people in your district voted for this that they voted for you and they voted for this restriction at the same time so it's a form of representative government that they want to go together i've got to tell you though it sounds a little bit like grover norquist is coming into washington state and you know that  raise taxes pledge yeah people are getting away from that in congress too they are because that's a no tax pledge that individual candidates make and this is a homegrown idea it's not from washington d c and it's just idea that was proposed in the early ninety's and coming right from washington state the third and final part of your balance the budget recommendations is create a competition council to identify ways to improve public services and save money through competitive contracting out so my first reaction is ok so we're creating another agency and government i thought that that that's not what you guys were about yeah that's a good point this this you might call as an agency to try to streamline other agencies but what the council would do is really more of a on you know computers and payroll these are all things that other states have contracted out and save money and so a council would just organize that process and present good ideas but isn't that what purchasing officers are supposed to do anyway whether supposed to but they operate in a different world of incentives so what person purchasing officers primarily want is to not have conflict so if there is a union bargaining unit within the agency the incentive is for the agency to not aggressively look for good bargains instead it's to you know try to keep the peace within their agency avoid labor unrest and so that's a program managers usually operate that way you know they're not in the business of looking for trouble whereas an outside counsel could so we would be a state agency but it would be separate from any of the particular programs and i say all right now the second part of the top policy recommendations from the washington policy center in the memo to the governor of november the fourteenth two thousand and twelve i think it was right where we had drafted it before that but as soon as the election was over we released it is help small businesses and i mean certainly everybody talks that again right i don't see a whole lot of happening you know the interesting thing is that i hear i hear a lot of people especially in government talk about business but then there's microsoft which is a global business right and there's the software developer down the street who is a one person shop can you put those two together in the work it yeah well what you do not you but i mean is that what is that reason to be doing they be lumped together yeah no they can't and that's a great point so what happens is that and this is true across with all the states is that big business is they have the where with all the lobbyists and you know the campaign contributions to kind of get a deal i mean their relations with the state government are going to be good by definition you know boeing and microsoft are present in the capital and whatever taxes or regulations are passed they will either try to get those mitigated or live with them or deal with them in some way your average small business person does not have time to be at the state capital and certainly can't hire a representative so our recommendations are mainly  targeted to that second group which is to streamline all the regulations so you're not saying it helps this protect or business or that business instead it creates a general economic climate in which citizens can operate their own businesses and do better that way let's talk about this first one to say include a regulatory sunset provision for all new regulations and submit all the existing regulations to review by the legislature every five years got to tell you if i'm in business consistency and reliability is something that i need right so if i'm thinking that well the regulations are going to change i'm not going to make a purchase until i know what those new regulations are it may mean this exactly has been what's been happening in  the health care but so that's a great point so the way we see this working in practice is that there are regulations which are obvious and are not going to be going anywhere so what the review process is to do is to force lawmakers to revisit the vast accumulation of rules that they have been adding for maybe one hundred years and maybe read them this time it may be read them look at them and ask questions about whether are they outdated are they no longer needed now i think for a businessperson is go realize that most active regulations are they'll just be re out and that in the legislature can pretty clearly signal that there are some regulations which are due to sunset and we're just going to turn right around and continue them for another five years so i think that would you know things like health and safety fire regulations you know road rules of the road that kind of thing would be pretty obvious and people in society would not expect those to change but there would be things like a rule that was created you know during the depression or you know or world war one has ever gone back to look at or rule that was requiring something in i t five years ago is likely to be way different today because id is moves and this is the kind of regulation that says you know you can't tie your horse in front of simpler fairer single business law i don't think you get too many business people who would who would oppose this right and there's always a lot of worry any time this happened at the national level if you're going to change the tax code people get very very nervous but this is an example of what i was talking about before so rather than passing special tax breaks or loopholes that help certain sectors like let's say aerospace or software because those those businesses have influence what we're saying is to simplify the tax code for everybody so a single business tax would have one rate and then the business owner would have two or three options on how to calculate his tax so a labor heavy industry could calculate it one way or another industry that has a lot of supplies and imports could calculate a different way so to that extent though it sounds like you are treating the software developer one man shop the same as you are microsoft we where we are the same rules would apply what we like about it is the flexibility is voluntary on the part of the taxpayer to choose one or two different methods so he's not instructed by the state you have to deduct all your labor costs but you can't deduct your business expenses instead the the the business owner himself could calculate his taxes two different ways and then pick the one that works out best for him but shouldn't the governor of the executive branch and the legislative branch have the option to have tax policy to manipulate companies to come to washington and so that's where we're going to disagree with the with you know the public official who says i think we should have more hollywood should come to washington state to make movies or you know the railroad industry should expand here whatever it is and so oppose this idea of picking winners or losers in the marketplace one thing is that i found the public officials are very bad at deciding what the next big thing is going to be so they may think that biofuels are the way of the future but it turns out that's not the case they may think that solar panels are the greatest thing in the world but they really don't pencil out to be profitable so these are not decisions that public officials should be making i think they're just not good at it but instead if they create a climate of opportunity in which citizens can pursue their own their own dreams so you don't know whether a company like u p s is going to get started in washington state which happened in seattle where you don't know what the next thing is going to be and so by creating a fair tax policy which is simple you raise money for the government while allowing citizens to organize their own business the third part and final part of the helping small businesses and the monopoly on unemployment  and allow workers to have individual portable unemployment accounts right i have no idea what that exactly it's complicated but right now what it means is basically what happens if you become unemployed so currently there's a state monopoly system that everyone has to pay into through payroll taxes which are determined rather legislature and then you get a certain benefit if you become unemployed our point is that there should be tax free accounts which everyone is required to have but you get to manage the account yourself so if you become unemployed there's a safety net program there for you if you never become unemployed then when you retire you get to keep those funds that that's the idea oh so like similar to a health savings account it is because it's personal and it's mandatory savings in the sense that you have to have it but it's something that every individual worker can keep it also means that if you want to take a break in employment voluntarily you can access those funds as well well that's interesting are there any states that have this i think it's been tried in some places i'm not sure of which ones but it's an idea that's been out there are there any states that do not have an unemployment monopoly system of an unemployment that i'm not sure either they they all have unemployment systems and you know that there are also supported by the federal government because that's debated in congress goodness we we've got lots of things to go and let's let's talk about promoting job creation very first thing and the state monopoly on selling workers compensation insurance and allow employers to buy worker protection insurance in a competitive private market as is done in forty six other states actually is that screw i had no idea about that so all of the virtually forty six other states almost every other state have gone to some kind of choice system when it comes to buying insurance to protect workers in the workplace and by the way we all have it where office workers industrial workers truck drivers everyone has insurance in case were injured and not able to work so that's a good idea yeah the problem is that we have a the state government basically runs an insurance company which is mandatory for everybody so what we're saying is that other states have private insurance companies that sell the coverage or they have what's called a three way system which is you can self insure you can buy from the state or you can buy in the private marketplace so and if you self insure you have to show that you have the ability to be able to fund it yet and that that option is for companies so boeing for example is self insured because they're big enough to do it so that's and that's market as well exactly same idea so if you can you know set up the accounts and you have the money to finance it that works but what small businesses are doing is looking at our neighbors in idaho and they say wait there are one hundred twenty companies that sell worker protection insurance and idaho businesses shop the market to get the right kind of coverage but in washington state there's only one choice so that's what we're trying to open out why is it why is it this way in washington state it's a legacy program that goes back eighty years and there's an ideology that says the department of labor and industries can be trusted with this and not the private market second part of promoting job  wage increases from the puget sound area consumer price index instead using region measures of inflation so the people in okanagan are stuck with the puget sound wages yeah great point this is what we hear mostly from eastern washington in the agriculture sector and in smaller communities where they say you know we're required to impose the same automatic wage increase that applies to a big metropolitan area like seattle which is the most expensive area in the in the state and so it affects people in two ways it makes it harder for workers to find job opportunities in these smaller communities where wages are lower so it helps unemployed people become competitive and then it helps smaller businesses and farms and agriculture hire the seasonal workers that they need and still be able to meet their costs does wash and state government and have the regional information as to what the wages are yes so the federal government has metropolitan statistical areas and essays and they can look at the economy that a reasonable burden upon government to be able to do this right so you're only looking at three or four different rates around the state and by the way this is the rate of increase so the minimum wage would still be going up but just to add a different amount in different parts of the state well how about two minutes left but i dare i well here's what we're going to do we are going to stay on promote job creation and we're going to switch to a second show that's right a second show to start out with a reforming education you want to repeal the never implemented paid family leave payroll tax program and reject efforts to mandate a one size fits all paid sick leave policy what's this all about so this was something that the legislature passed in the heady days of the good economy they were going to creates a new payroll tax and then a mandatory family leave program and this is typical of state lawmakers who you know want to they feel like they're giving peace well a benefit but they have never funded it and it's never gone into place so we think it should be repealed in order to free up the labor market place again to provide opportunity for so it's never been if it's never been funded how is it impacting the labor market right so it's not impacting anyone right now but there's a you were mentioning uncertainty earlier so it was business leaders are thinking is we have to be prepared for this because any year now they'll have the budget they'll impose the payroll tax in the program will start since it's never been implemented we think it should be repealed so that businesses know what to expect we have a minute left in this show what is it that the washington policy center thinks will happen with these recommendations well we want to inform the public debates or to give the governor creative ideas we know that he won't pick up all of them but we want to be able to answer the question that when we you know when he has an agenda and we say that's not helping the business climate it's going to make it worse and he of course is going to turn to us and say well what are your ideas so we want to provide something constructive to begin with just to help generate bills and ideas in the legislature i bet you've been answering a lot of questions since the legislature  legislative session started yes we have absolutely you know as bills are introduced it tends to percolate up and we're going to we're going to talk about some of those bills we're not going to be able to talk about them in this particular session but we will be talking about a lot more things including reforming education improving health care promoting open government protecting the environment improving transportation we will see you next time again with paul guppy right here on public exposure talking about the things that should be done in th state we'll see you next week