48th LD Town Hall: Ross Hunter, Rodney Tom, and Cyrus Habib discuss education, budgets, and tax loopholes

Saturday morning I attended the Town Hall meeting of the 48th LD, at Redmond City Hall.

Representatives Ross Hunter and Cyrus Habib, and Senator Rodney Tom gave short presentations. For most of the meeting they answered questions. Most of the questions concerned education funding and tax incentives.

Hunter said that higher ed sorts and finds which students will succeed. Eastern University’s four year graduation rate is in the low 20s. More kids graduate with debt than with degrees. (I taught Computer Science to sophomores at a state college and can attest that most of the students weren’t interested in studying. They should have gone out and worked for a few years to gain maturity and get settled.)

Tom pointed out that some students graduate from four year colleges and then find that they lack skills to get a job. Ironically, they cycle back to attend two-year technical colleges. There are some 60,000 unfilled jobs in Washington State (presumably, most require advanced technical skills). Online learning is another up-and-coming option. A report by a Harvard College professor suggests that many students don’t benefit from attending college. Some homeless people took a short course on bank telling and got bank jobs. Maybe society needs to rethink higher education.

77 to 31 the House passed the Dream Act, with all Dems and 22 Republicans voting aye. It will make it easier for undocumented aliens to go to college. Now we need to fund it.

Habib said that last year the legislature passed a bill requiring evaluation of teachers and principals. The teachers bought into it. The Republicans want to fund education by cutting social services, such as Apple Health for kids. Their “Fund Education First” proposal wouldn’t help poor, struggling kids. If the kids aren’t healthy, fed, and housed they can’t learn. The kids having trouble at school don’t live in Medina and Clyde Hill. (Applause)

The Supreme Court ordered the legislature to amply fund education and re-iterated their demand in a letter in December. We’re serious, they said. The legislature needs to provide enough funding so that a competent superintendent (not the top 2%) has the resources to make education work. Hunter said that he thinks the legislature has to come up with $1.4B to $1.7B this biennium, and $4.5B within five years. Reducing class size is necessary but very expensive. Early learning is a high priority. When Gregoire vetoed an early learning provision, Hunter had a very public “hissy fit,” he said.

Tom and Republicans say there’s little correlation between school spending and performance. And there is some data to back them up. See Report on League of Education Voters forum in Issaquah. Republicans want accountability.

Democrats point out that there is a high correlation between poverty and low student performance.

Someone asked about high salary increases in Lake Washington School District. Hunter said that salary negotiations are a local matter, and you don’t want the legislature getting involved, unless there are egregious irregularities.

Ross Hunter, who is chair of the House Appropriations Committee, said that his job as budget head is by far the most interesting he’s ever had. He said the session is half over but 80% of the work remains. Now is the quiet time before the fiscal bills are discussed in the legislature. If a bill doesn’t have fiscal impact, it’s not interesting. There are four tasks: (1) submit a balanced budget, (2) respond to the McCleary decision of the Supreme Court that requires ample funding of education, (3) implement Medicaid expansion, working with the federal government, (4) pass a transportation package that settles the west end of I-520, and (5) do something about gun violence. Unfortunately, the bill to strengthen background checks for gun purchases failed. See Bill’s defeat a case study on gun issue; NRA lobbying worked.

The revenue forecast is coming out soon. “Rodney and I disagree on the 2/3rds super-majority requirement.” Alexander Hamilton, in the 22nd Federalist Papers, wrote a lot about the evils of super-majority requirements, Hunter said. But 60% of the voters in the 48th LD disagree. We’re unlikely to have structural changes to the tax code. Governor Inslee opposes structural changes (new revenue), for one thing.

Hunter said that both gubernatorial candidates proposed unreasonable budgets during their campaigns. And recently the House GOP submitted a “budget” that also was unrealistic. Hunter called it a “press release.” The GOP proposal contains gimmicks and makes another $200 million in cuts.

Hunter said that the legislature is working on eliminating some tax loopholes (“preferences”). But he held back from saying which ones are being considered. The Senate unanimously passed SB 5843 that would sunset all future tax breaks and would require performance metrics. See Washington Governor Eyes Tax ‘Loopholes’ For Elimination.

But eliminating existing, not future, tax preferences is a different matter. The legislators agreed that it’s difficult to eliminate tax exemptions. Some exemptions make a lot of sense. For example, food isn’t subject to a sales tax. Medicine also isn’t subject to a sales tax. (But I say: thinking about that a bit, it’s clear that something is seriously wrong when drug companies can get away with charging outrageous prices for medicines, but the government isn’t allowed to charge any tax on that amount.)

For the questionable tax breaks, there are powerful lobbies protecting their interests. Tom mentioned that auto dealers oppose eliminating tax incentives for trade-ins. Even when the Democrats had majorities in both the House and the Senate, they were unable to agree on eliminating tax incentives.

In fact, this year there are proposals for new incentives. For example, SB 5342 “provides a sales and use tax exemption to restaurants on products that impart flavor to food during the cooking process.” Sponsors include Rodney Tom, Ed Murray, and Jeanne Kohl-Welles — the latter two being progressive champions.

Habib agreed that many tax breaks should be sunsetted. But he learned how hard it is when he got to Olympia. (He’s a first term rep.) But he too wants to create a tax incentive to help start-ups. Because of our state constitution the legislature has few tools to do economic development — it can’t directly invest in companies.

I submitted a question on paper: now that the state Supreme Court ruled that the super-majority requirement is unconstitutional, will the legislature be able to eliminate tax exemptions such as the $1 billion Microsoft gets each year. (This question was directed especially towards Hunter, who apparently was instrumental in arranging those tax breaks. See Exposing Two Microsoft Scams… The Billion Dollar Tax Avoidance Scam and the HiB Union Busting Scam and How Dems Ross Hunter and Suzan DelBene helped Microsoft avoid taxes.) When Hunter read back my question he said “the submitter alleges $1 billion…”

Hunter or Habib asked: Why do people vote for Eyman initiatives? Framing. If you go and ask someone: do you want to spend $100, they’ll likely say no. But if you say what they’ll be receiving for their payment, they may be interested. Habib said that we have to figure out in the state: do we want to go on the road to becoming like Mississippi. It’s not a place most of us would want to live or do business, California has some of the highest taxes and regulations in the country, but it’s an engine of economic growth and innovation. (applause)

Habib supports a transportation mix. The Eastside used to be a car mecca. No longer is that exclusively so. Google is adding 1000 employees to its Kirkland campus, and the 20 something googlers want to live in condos and ride public transportation to go to night life events. They don’t think of themselves as suburbanites.

House transportation chair Judy Clibborn proposed $10 billion in new transportation funding, including new gas taxes. And that doesn’t even address funding for I-520. It’s politically toxic. Voters oppose gas tax 60% to 70%. (But what do the voters know?)

Complicating the funding issue for I-520 was the debacle with the poorly designed pontoons, which will cost millions of dollars to fix.

A lady in the back asked a question about transportation funding. She said that when the googlers get a bit older they’ll have kids and want to move out to the suburbs and buy cars. She said there’s too much emphasis on light rail and buses. Habib responded well: he said he supports a “mix” of transportation, and unless lots of people use public transportation, the roads will be so crowded that even auto commuters will suffer. Public transportation helps ease congestion.

Rodney Tom said that most private companies have moved away from defined benefit retirement plans (pensions). Instead most private companies have plans such as 401Ks Tom said that the state government should do the same. It’s unfair that public workers get such special treatment, according to Tom, and if Democrats and activists expect voters to approve additional revenue, the public pension system will first need to be reformed.

Tom co-sponsored SB 5159, which would repeal the family and medical leave insurance act.

On the plus side, Tom sponsored SB 5843 to strengthen “the review of the legislature’s goals for tax preferences by requiring that every new tax preference provide an expiration date and statement of legislative intent.” And Tom supported a joint memorial to overturn Citizens United.

BTW, you can see what bills a senator sponsored by going to their home page (for example, http://www.leg.wa.gov/senate/senators/Pages/tom.aspx) and clicking on Bill Sponsorship.

Tom responded to accusations that he’s too far to the right for his district. He went along with the voters of the 48th LD by voting for Obama, Inslee, Eyman’s I-1185, and charter schools. When asked if the State Senate would pass a budget that adequately funds education, Tom said they’ll make “a substantial down payment” on McCleary, but there will need to be some painful cuts, presumably to social services.

The rest of the industrialized world spends 9% of GDP on health care. The US spends 18%, which is likely to soon rise to 21%. This is unsustainable. We must address smoking, obesity, and end-of-life issues.

Tom said that this session has been one of the most productive ever. 89 minority bills passed.

At the end the legislators accepted questions from the floor. Near the end, I raised my hand, and when Rodney Tom graciously called on me — I was very publicly holding the sign below — I asked, “Washington State has the most regressive tax system in the country but the voters shoot themselves in the foot by voting against an income tax. How does the legislature plan to educate the public about that issue?” Some people applauded when I said “regressive tax system,” to indicate that they agreed that it’s a serious issue. Hunter made an effort to repeat my question but intentionally didn’t use the word “regressive.” He said, under his breath, that he didn’t want to use my value-laden terms. He said something like, “The question is how the legislature plans to — uh — reform the tax system.” He didn’t answer my question. Afterwards, we discussed it and he said that it’s not the legislature’s job or individual Democrats’ job to tell voters that they are wrong about taxation.

I guess politicians don’t lead. At most they follow. Often they don’t even do that.

I think my question wasn’t well phrased; I should have directly asked: how do you plan to fix Washington’s regressive tax system? That way, he couldn’t have as easily eluded the question, as he did. Andrew Villenuve pointed out that I should also try to ask a follow-up question.

Habib’s answer to my question about regressive funding was more useful. Habib said, to everyone, that one way to educate the voters is to point out the benefits they get from taxation. For example, voters in eastern Washington regularly vote for Republicans and against taxes, but in fact there’s a substantial net flow of tax money to the eastern part of the state, where population density is low and where transportation funding builds many roads. The voters need to understand what they’re getting when they pay taxes. Then they may be more willing to vote for tax increases.

I arrived at Kirkland City Hall carrying the sign shown below. Tom deserves condemnation because he ran as a Democrat but he and Tim Sheldon handed control of the State Senate to the Republicans; in return Tom became Senate Majority leader.  There were teachers’ union reps out front, and they were quite visible and vocal during the meeting. See Rodney Tom Hates Teachers and this. They said I should have arrived earlier so that everyone would see the sign. I was happily surprised that they let me into the chambers carrying the sign. Several people told me they liked it. Rodney Tom smiled from the floor. Hunter said he expects a civil meeting; don’t go waving your signs. Tom’s legislative aide later complimented me on my design skills; he said it looks a lot like the real campaign sign. I explained that I had photoshopped Tom’s real campaign sign.

The Washington Education Association distributed the following handout: