I’ll probably vote for Gael Tarleton, because I suspect Richard Pope will be an outlier on the commission and won’t be effective.

SJR 8206 – A constitutional amendment on the budget stabilization account maintained by the state treasury.

This amendment would require the legislature to transfer additional moneys to the budget stabilization account in each fiscal biennium in which the state has received extraordinary revenue growth, as defined, with certain limitations.

There are two ways to smooth out revenue fluctuations from year to year. One of them is to borrow from the future, which is what the federal government does. However, the state constitution requires a balanced budget and getting that changed isn’t politically doable. The other way is to put money away, to be drawn down when times are bad. That’s how Washington State currently does it. (Some states don’t do it at all.)

The rainy day fund is currently about $300 million. The revenue shortfall is about $2 billion. In other words, the rainy day fund turned out to not be large enough. Not even close.

This amendment requires that, if the state has growth that is more than 33% above the 10 year growth rate, the amount above that be put into the rainy day fund. In other words, don’t spend as much money when times are really flush and story it away. We currently save 1% of our revenues, and this won’t change that. It only adds additional saving for flush times.

The no argument is that we should spend that money on needed services instead. And while that is an attractive argument, we’d have to cut off those programs a few years later during the next recession. I’d rather us have sustainable programs.

And it’s much preferable to save the money than rebate taxes. That doesn’t prepare us at all for the next recession.

I’ll be voting for this amendment.

SJR 8205 – removes Article VI, Section 1A of the Washington Constitution.

This amendment would remove an inoperative provision from the state constitution regarding the length of time a voter must reside in Washington to vote for president and vice-president.

This one is pretty much a no-brainer. But before I explain why, here’s the provision which will be removed if this passes:

SECTION 1A VOTER QUALIFICATIONS FOR PRESIDENTIAL ELECTIONS. In consideration of those citizens of the United States who become residents of the state of Washington during the year of a presidential election with the intention of making this state their permanent residence, this section is for the purpose of authorizing such persons who can meet all qualifications for voting as set forth in section 1 of this article, except for residence, to vote for presidential electors or for the office of President and Vice-President of the United States, as the case may be, but no other: Provided, That such persons have resided in the state at least sixty days immediately preceding the presidential election concerned. The legislature shall establish the time, manner and place for such persons to cast such presidential ballots.

Basically the deal is that at the time, the 60 day requirement was much more lenient than the normal residency requirement for voting in Washington. However, the Supreme Court invalidated all laws that establish a residency requirement that’s greater than 30 days for presidential elections. And now we just have a 30 day requirement anyway. So why not clean this provision up?

I’ll be voting for it. Even if it wasn’t inoperative, I’m in favor of making voting easier.

Initiative Measure No. 1183 concerns liquor: beer, wine, and spirits (hard liquor).

This measure would close state liquor stores and sell their assets; license private parties to sell and distribute spirits; set license fees based on sales; regulate licensees; and change regulation of wine distribution.

For the last few years, Costco has sponsored initiatives to privatize liquors sales and distribution. I’m generally in favor of the idea, but have opposed the specific measures in the past, and I oppose I-1183 as well. But it won’t break my heart if it passes either.

State Liquor Store, 1971

Right now beer and wine can be sold in private retail stores in Washington. Hard liquor is sold only from restaurants, bars, and retail stores run by the Washington State Liquor Control Board. I believe the hard liquor monopoly is a remnant of prohibition. I-1183 directs the state to sell any assets related to liquor sales or distribution. In practice this will mean that the stores will be closed, because another item in the measure limits sales to stores with 10,000 square feet. In other words, grocery stores and big box discount stores.

The measure does not eliminate the three tier system for distribution though; we’ll still have producers, distributors, and retailers. But some companies will be allowed to be their own distributors, bypassing the middle man. That means places like Costco can sell liquor more cheaply. Which is something I’d be fine with, but it will probably freeze out small producers from the largest sales channel in the state. Right now they have a better opening into the distribution system. I don’t know where I come down on that. I’d like small producers to survive, but I don’t agree with doing it by monopoly power and price fixing.

I-1183 will raise revenues for the state, from $5 million to $8 million in 2012, and $35 million to $42 million in 2017, depending on assumptions. Local government revenues increase as well. These are the numbers the state came up with. The No On 1183 campaign likes to portray this as a tax increase and therefore bad. People don’t have to buy hard liquor, so it doesn’t bother me much.

Where my opposition comes though is that liquor will more or less only be sold in grocery stores. My ideal privatization measure would sell off the stores to be operated privately. Or allow private companies to open competing liquor stores. But spreading liquor sales into groceries worries me.

So my vote is a weak no.

Pushing Wheelchair adapted from photo by bradleygee (CC By)

Initiative 1163 – concerning long-term care workers and services for elderly and disabled people.

This measure would reinstate background checks, training, and other requirements for long-term care workers and providers, if amended in 2011; and address financial accountability and administrative expenses of the long-term in-home care program.

Quick background that I know most of my friends know, but not everyone who stumbles on this will. I spent 3 years caring for my mother during her terminal illness and for my grandparents as their health declined before they died. I hired a number of people to help care for my mother. We did not use an agency for reasons that are not germane to this. There was no good way to determine the qualifications or experience for these caregivers, and it was a crapshoot with respect to the care they gave. For my grandmother, I insisted we use an agency that performed background checks at least, and they supposedly gave their workers some minimal training.

In 2008, I voted for an initiative that created a licensing program and training for long term caregivers. It passed by a large margin. Since then, the state legislature delayed some of the requirements instituted by that initiative. This was an attempt to save money given the horrible budget constraints the state experienced. Instead of starting in 2012, the program now starts in 2014.

If I could be sure this was a one-time delay, I wouldn’t lose a lot of sleep. I wouldn’t like it, but we’d get the improvement in standards fairly shortly. However, given that we continue to have budget constraints, I fully expect the legislature to delay the start of the program again. I do not want it to be indefinitely delayed. If this initiative passes, the program starts in 2012, and the legislature can’t amend it for two years. By which time it will have started. It’s much harder to shut down an existing program than to delay one that hasn’t started.

I don’t care that it costs some money. In an ideal world, market forces would create a mechanism for ensuring care, but that hasn’t happened. The only way to ensure good long term care is to have a lot of money. People who are disabled or dying deserve a minimum level of care even if they are poor, and this initiative goes a long way to ensuring that.

I’ll be voting yes on I-1163.

Photo by Oran Viriyincy (CC By-Sa)

Initiative 1125 – Concerning state expenditures on transportation.

This measure would prohibit the use of motor vehicle fund revenue and vehicle toll revenue for non-transportation purposes, and require that road and bridge tolls be set by the legislature and be project-specific.

That’s the ballot title and question. Which, unfortunately, is pretty bland and misleading. There are a grab bag of provisions in the initiative, most of which are bad:

Right now the legislature authorizes tolling on specific roads or bridges, and the state transportation commission sets the actual toll rates. I-1125 requires that the legislature set the tolls. That’s a guarantee for a political clusterfuck. Need to raise tolls to pay to repave or for structural fixes? A group of eastern washington legislators can hold it up. It also means every individual toll decision is subject to referendum.

It requires that tolls be uniform. That’s to remove what’s called congestion pricing. Want to cut down on people using the 520 bridge during rush hour? Charge a higher toll during rush hour. This provision would prevent that.

But the real reason behind the initiative is to prevent using I-90 for light rail. If this passes, there is no light rail to Bellevue. The main person bankrolling the initiative is the owner of Bellevue Square and a major investor in car culture related projects.

One of the effects of the initiative, though not explicitly part of it, is that it reduces the bonding capability for the 520 bridge replacement, which has already started. So to finish the bridge, the WSDOT will need to cancel about $500 million worth of other projects and shift the money to 520.

Really, all a person needs to do is look at who is sponsoring the initiative: Tim Eyman. He had one good initiative (performance audits) and a shit-ton of crappy ones. Including this one.

I’m voting NO.

White House: Obama to lay out spending plan

Much will be revealed at midweek, when the House and Senate are expected to vote on a budget for the remainder of this fiscal year and Obama reveals his plan to reduce the deficit, in part by scaling back programs for seniors and the poor.

The A.P. item is based on an appearance by David Plouffe on Meet The Press this morning. David Plouffe is an advisor to the President, and his appearance is to grease the wheels for President Obama’s budget proposal later this week. The A.P. may be making a bit more of Plouffe’s words than ought to be taken. Here’s the relevant part:

Video:

Transcript:

So we’ve had a lot of savings in health care, we have to do more. So you’re going to have to look at Medicare and Medicaid and see what kind of savings you can get. First, squeezing them out of the system before you squeeze seniors. Secondly, on Social Security, what he said is that is not a driver right now of significant costs, but in the process of sitting down and talking about our spending and our programs, if there can be a discussion about how to strengthen Social Security in the future, he’s eager to have that discussion.

I really hope this doesn’t mean what the A.P. thinks it means. Sadly, they may be right.

The problem with the federal budget is actually really small right now, though it gets bigger down the road. You may have heard that the deficit is the largest it’s ever been. That’s only correct if inflation is not taken into account. A better measure is the deficit as a percentage of gross domestic product, a figure that currently is about 10%. We ran a much bigger deficit during World War II, and we’re currently only running a deficit about twice as high as when Ronald Reagan was in office. ( I am not going to get into whether Bush or Obama is responsible for this level, but the answer is George W. Bush.)

US Deficit as a Percentage of GDP

Now, even that 10% of GDP may seem high because the U.S. has only exceeded that twice before, but we also have to consider interest rates. The Prime Rate was 15.25% when Reagan took office, and 8.75% when he left office. It got as high as 21.5% and dropped as low as 8% in 1987, but during the Reagan administration it was usually well above 10%. This rate was 7.25% when Obama took office, and now stands at 3.25%. That’s not what the government pays in interest, but it does show the general idea. The current cost to borrow money is less than half what it was at the lowest point during the Reagan administration. It is amazingly cheap to borrow money right now.

That’s why the current deficit is really not much of a problem.

Long term, we do have a problem with our deficits. No, not with Social Security. That actually doesn’t have an issue until the late 2030s, and will require a fairly small change to fix. Our long term problem is with Medicare and Medicaid. And the problem isn’t that we have too generous of benefits. The problem is that health care is too expensive in the U.S. Western Europe has much better health outcomes than we do, for about half the cost and much less hassle.

Health Care Costs as a percentage of GDP

If we paid the same as other developed countries, we wouldn’t have a long term deficit. The problem is that we’re spending recklessly. The problem is that we give too much money to doctors, insurance companies, drug companies, and the like. That’s why the Affordable Care Act (a.k.a. RomneyCare or ObamaCare), even without a public option, was good for us. It has a number of controls that bring down costs. It doesn’t eliminate the problem, but it does remove a big chunk of our future deficit.

The Republicans introduced a budget plan last week that goes the wrong way. It repeals the A.C.A. and pretty much also eliminates Medicare and Medicaid. It eliminates the deficit long term by shifting health care costs to individuals. That would be fine, and in fact preferable, if health care costs were predictable for individuals. But they aren’t, so when you get sick, or A.L.S., you have to pay for everything yourself or hope that your insurance company will. Remember, health insurance companies make money by not insuring people with health problems.

The Republican plan, which thankfully doesn’t have a chance of passing in anything like it’s current form, has all sorts of problems that I may blog about later. But how it handles Medicare is its defining set of terms.

So now Barack Obama has agreed to find ways to save money in Medicare and Medicaid. The problem with that is that the only way to save money and not hurt individuals is to double down on the A.C.A. Introduce the public option or nationalize health care or the like. In other words, more not less socialized medicine. I’d be fine with that personally. But you know that hasn’t a chance of passing either. Obama loves compromise, and since the direction of compromise is the wrong direction on this issue, it means more health care costs will be shifted to individuals.

None of either of those plans (the Republican one or the possible Obama one) will affect health care costs overall. Just that born by the government. The Market works to control costs in many goods, but not health care. If it did, we wouldn’t have health care inflation outpacing regular inflation for the last 30 years. There’s many reasons for this, such as health insurance adverse selection, lack of bargaining power, inability to control health care needs, and more.

The upshot of all this is that it looks like we’re going to do something we don’t need to do right now, reduce the deficit, in a way that hurts everyone but the really rich and that doesn’t actually solve the underlying problem. We’ve got a center-right President moving rightward when he should be getting more progressive. And the Obama-istas wonder why the base that gave him the nomination in 2008 isn’t so thrilled with him. Sure he’s better than McCain would have been. But it’s hard to stay excited for someone who’s selling point is well, you could have that idiot over there.

I’ll probably write more about the budget compromise that was passed last week for 2011. It moved the wrong direction too.

I’m in favor of sin taxes if I agree that the items being taxed are sins. It’s simple economics: tax the things you don’t want to happen. When the price goes up, people do them less. It’s the principle behind cap-and-trade and carbon taxes. It’s the principle behind congestion tolls. It’s possible to raise such taxes too high. When a thriving black market in the item comes around, then you know the taxes are too high.

I’m all for taxing candy and soft drinks. There exist relatively cheap, relatively healthier alternatives that people can buy instead, if they want to avoid the tax. If you can’t go without your Coke Zero, pony up.

The soft drink industry has spent something like $16 million to pass this. The advertising campaign says it’s all about the taxes on grocery items that were included in the tax for technical reasons. a) the taxes on those items are around $4 million. The beverage industry could have donated the $16 million to grocery manufacturers 4 times over, and we wouldn’t have a need for the initiative (if even that’s a concern). b) The opponents of the tax could have crafted the initiative to repeal just the grocery tax part, but they did not. Their arguments hold little weight with me because of this.

I’m for keeping the tax and voting no on I-1107.

Initiative Measure No. 1105 concerns liquor (beer, wine and spirits). The measure would close all state liquor stores and license private parties to sell or distribute spirits. It would revise laws concerning regulation, taxation and government revenues from distribution and sale of spirits.

The state government should not be operating private retail stores absent some important reason. The fact that Washington State does is (I assume) a vestige of the repeal of Prohibition, combined with a large amount of inertia. It does make getting liquor for minors somewhat more difficult, but not exactly because security at these stores is tight. They do have a better record at refusing sales to minors. But I think the real reason state liquor stores do better is that they aren’t so busy and there aren’t too many of them. The stores have a high markup, and limited selection. As some bars have noted, they cannot get some liquors for their businesses and service is not good.

There are two initiatives on the ballot that would get the state out of the liquor selling business. If both pass, how things will shake out will be anyone’s guess.

I-1100 is the Costco sponsored initiative. It removes a lot of the regulation on liquor sales as well as getting the state out of it. Places that have a license to sell beer and wine could get a liquor sales license, and the state would be limited in what it could regulate with regards to liquor sales. The key part for Costco is that it eliminates the current three tier system: manufacturer, distributor and retailer. As a retailer, they could skip the distributor and go straight to the manufacturer. The measure retains the current taxes on liquor.

I-1105 requires the state to close its stores, but retains more of the regulatory framework. The three-tier system would remain in place. Retailers must by from distributors. And distributors cannot offer better prices to one customer that to another, though they could offer volume discounts. Costco doesn’t like it, because they would like to negotiate lower prices directly from manufacturers that aren’t available to other retailers. The WSLCB would create a new license for retailers and establish the rules for it. For instance, they refrain from issuing new licenses in areas that are saturated with liquor sellers. The measure would remove most taxes on liquor sales (not sure about sales taxes) and direct the WSLCB to propose a new tax to the legislature.

I will be voting for I-1105 and against I-1100. While I think anti-drinking goes too far sometimes (like freaking out over restaurants that allow patrons to drink in their sidewalk seating), the fact that liquor is intoxicating means we should be exercising some discretion in how we sell it. I-1100 doesn’t allow for that. For instance, I-1105 could allow the WSLCB to require that liquor be sold in separated areas from other goods, while I-1100 does not. I’m not so keen on the requirement for three tiers, though I do like the requirement that distributors offer uniform prices. I’m agnostic toward the tax change. It comes down to the ability to regulate liquor retailers.

This one is another easy one for me. Washington has one of the most regressive tax structures in the country, because it relies heavily on the business and occupation tax, and the sales tax. Both of those taxes make low income folks pay a larger percentage of their income in taxes than higher earners. The B&O tax because it gets passed on in prices, though a fair amount of it is non-consumer goods. As people make more money, the marginal sales tax rate with respect to a person’s income falls because consumption falls off at higher incomes. Money moves from consumption to investment. To explain, if you are broke, the next $5 you get will be spent on food (or gas, or whatever). If you made $1,000,000 last year, the next $5 will much more likely be used to buy stocks (or bonds or whatever). The sales tax on the poor person’s $5 is going to be approximately 50¢ where the sales tax on the rich person’s $5 will be close to zero. The choice to not spend is constrained the poorer one is.

We also rely heavily on a property tax, but that also gets passed on to anyone who lives in the state. It’s either direct, or paid out in higher rent. I don’t think property taxes are as regressive as the sales tax, but they are still regressive.

I1098 establishes a high earners income tax for the state, while cutting a portion of property taxes and B&O taxes. Income taxes can sometimes be regressive, but they are easier to structure to avoid it. In this case, it’s very progressive. People who need the next $5 to eat won’t get taxed. People who invest it in stock will. For that reason alone I am for it.

I also think it will help stabilize the state’s revenue somewhat. Not completely, but a bit. Aggregate income is a better gauge of the state’s economic activity than consumption. Consumption can only drop so low, and it can only climb so high. It allows the state to skim off the income in good years for the bad. We currently do that with sales taxes, to some degree.

The only arguments I’ve seen against it are hysterical rantings. The legislature will extend it to other people in 2 years!! Yup. They could. They could establish an income tax and extend it right now. This changes nothing with regard to what the legislature could do. And it changes nothing as far as people’s ability to oppose it. If people are against increasing the tax, and the voters don’t want it, they’ll vote them out. Or have a referendum against the law.

I’ve also seen but I’m not rich even though I made nearly $2,000,000 last year. And even no one I know who makes $200,000 is rich. It’s not fair to MEEEEE! Here’s something to think about: SHUT THE FUCK UP! You are rich. This is not the end of the world. You can better afford this than someone making $20,000. They’ve been sucking it up for years. Now you’ll have to for a bit.

By the way, in case you were wondering, these opinion piece aren’t really intended to convince people. These are polemics which explain my reasoning for voting for them. I fully realize telling a rich person to STFU isn’t going to convince them to vote for this.