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House issues sustainable, responsible budget

Following is today’s edition of the WSLC Legislative Update newsletter (PDF version):

OLYMPIA (April 12, 2013) — On Wednesday, House Democratic leaders introduced a state budget proposal that, similar to Gov. Jay Inslee’s plan, chooses education over tax loopholes. Those two proposals stand in contrast to that of the Republican-controlled Senate’s all-cuts budget, which doesn’t close a single special-interest tax loophole — and in fact creates 15 new ones on things like the purchase of clay targets at gun clubs and “the sale of financial information to qualifying international investment management firms” — while making disturbing cuts in Washington State’s social services.


The House budget “chose to invest $1.3 billion towards meeting the McCleary decision [requiring the state to increase funding for its paramount duty: education] by closing or narrowing 13 tax breaks and making other sensible changes that bring in additional resources,” reports the initial analysis from the Washington State Budget and Policy Center. (Also see the Center’s report of the House’s revenue proposal.)

The good news is that all three budgets fully fund the negotiated and approved state employee contracts. Since the start of the recession, state workers have made tremendous sacrifices, including agreeing to a 3% pay cut and furloughs. This on top of 5% cuts taken by about one-third of state workers in 2010 and no cost-of-living adjustments since 2008. Employee-paid health premiums are up 25% and employee-paid out-of-pockets costs up 100%, but the state cut its share of premium contributions per employee. More than 4,000 state employees have been laid off and more than 10,000 positions have been eliminated over the past few years, even as the state population they service has grown by more than 1 million.

The House, Senate and Governor’s budget proposals all end the 3% pay cuts and fund new contracts that take modest first steps toward restoring some of the damage done to state employees and their families.

In addition, all three budgets extend health-care coverage to an estimated 280,000 Washingtonians via the federally financed Medicaid expansion championed by President Barack Obama.

But those positive achievements are where the significant similarities end between the House and Governor’s budgets and the outlying Senate budget, which includes some questionable and perhaps unconstitutional fund shifting and some fantasy-based assumptions.

For example, the Washington Federation of State Employees, AFSCME Council 28, the largest state employee union, points out that the Senate budget includes $131 million in unspecified “administrative efficiencies.” WFSE’s Dennis Eagle warns that these cuts could lead to “higher workloads, diminished customer service, further erosion of public safety, and the closure of parks and hatcheries.”

Overall, the Inslee and House budgets are sustainable and responsible budgets that meet the needs of our state’s most vulnerable citizens while choosing education over tax breaks. A vote of the full House on its budget could come today or Saturday. Then the House, Senate and Inslee will begin negotiating a final budget.


Workers’ compensation cuts still on the table


The Senate budget also makes reference to Senate Bills 5127 and 5128, which would lower or eliminate age restrictions on compromise-and-release buyouts of injured workers. The bills are technically dead having missed the cutoff deadline in the House, where Democratic leaders share Gov. Jay Inslee’s opposition to further “reform” of the workers’ compensation system at least until the 2011 legislative changes have been fully implemented.

Organized labor and other injured worker advocates strongly oppose these bills because expanding buyouts to younger workers puts more at risk of being shortchanged. Young workers, in particular, would be making critical financial decisions in an atmosphere of great stress and uncertainty, given the longer stretch of their work lives ahead. (Also see: “Four Reasons Why Our Current Workers’ Compensation System WORKS.”)

By including reference to SB 5127 and 5128 in their budget, the Republican-controlled Senate is saying it considers the bills “necessary to implement the budget” and therefore exempt from the cutoff deadlines. They accomplish this by pretending the state will save $10 million in the next biennium by passing either bill. (Apparently, it doesn’t matter which bill, even though one lowers the buyout eligibility age from 55 to 40 and the other eliminates all age restrictions. Either way — poof — $10 million!)

How does getting more injured workers to accept less money up-front than they would otherwise receive save the state money? Good question, considering that any systemic cost savings benefit the workers’ compensation State Fund — financed by employers and workers — and not the state’s General Fund. The only way the budget can book any savings is if the state’s own workers’ compensation rates, as an employer covering state employees, drop.

So, the Senate budget makes two assumptions:

1) Democrats in both the House and the Governor’s Office will abandon their opposition to further tinkering with workers’ compensation until the 2011 reforms are fully implemented; and

2) Passage of either SB 5127 or 5128 — it doesn’t matter which — will save the State Fund so much money that the state will LOWER workers’ comp rates for all employers, presumably next year. This amid ongoing concerns shared by business, labor and the government that reserve funds depleted by the recession need to be bolstered. The state is already setting aside $82 million into reserves this year, but has warned that rate increases may be necessary in the future to continue building up reserves. And yet, the Senate assumes that next year, rates will be significantly lowered.

File that first assumption under “Unlikely.” And file the second under “Pure Fantasyland.”

The only way the state could lower rates is if a truly extraordinary number of workers suddenly settled their claims for way less than they were worth. That is a nightmare scenario for these injured workers and their families. The truth is, such a scenario would increase state costs because when these families’ buyout money runs out they will require public services and assistance.

The dubious assumptions necessary to try to resurrect these workers’ compensation cuts undermine the credibility of the Senate budget. If these are the kinds of fiscal contortions necessary to achieve ideological policy goals in the Republican-controlled Senate, what other kind of fantasy-based assumptions are in there?


Senate renews attack on family leave


Well, speaking of ideologically driven attacks on the middle class that are being crammed into budget proposals… the Senate has also resurrected its attempt to get rid of paid family and medical leave.

In 2007, historic legislation was approved to grant all Washington workers up to five weeks of paid family leave to care for newborns, adopted children and illnesses of family members with a stipend of $250 per week. But the program’s funding source was not identified, and since then, recession-related concerns stymied efforts to create a funding source.

A brand new Senate bill was introduced Tuesday, heard Wednesday in Ways and Means Committee, and approved by that panel Thursday. Sponsored by Sen. John Braun (R-Centralia), SB 5903 is identical to the late SB 5159, except for the title, in that it completely repeals 2007’s Family and Medical Leave Insurance Act. Given the bill’s sudden appearance and magical 48-hour journey through the Senate’s transparent government process in Ways and Means, it is presumed that its supporters are attempting to argue it is necessary to implement the budget and therefore exempt from all the deadlines it has missed. They didn’t think so earlier this session, when SB 5159 passed out of policy committee and was referred directly to Senate Rules because it was deemed to have no fiscal impact. Benefits for family leave insurance are scheduled to begin in October 2015, which is not in the current biennium.

Senate procedural gymnastics aside, repealing family and medical leave insurance not only fails to save the state any money, it is the wrong direction for strong and healthy families in this state. The Washington State Labor Council urges the Senate to drop this renewed assault on real family values.

CHECK OUT THE UNION DIFFERENCE in Washington: higher wages, affordable health and dental care, job and retirement security.

FIND OUT HOW TO JOIN TOGETHER with your co-workers to negotiate for better wages, benefits, and a voice at work. Or go ahead and contact a union organizer today!