Hello Readers,

Last week Governor Christine Gregoire finished signing bills that passed the legislature, includig the supplemental operating budget.  Through targeted vetoes, Gov. Gregoire added an additional $15 million to reserves, now totaling $850 million.  This is a fairly sizable surplus but the question is if it will be enough to plug the next budget hole when the legislaure reconvenes in January 2009.

With the growth of state revenues slowing, elected officials are going to have to be more circumspect about state spending.  You will hear whines and moans from various interest groups that receive your money about "cuts", which means "the legislature is giving us less than we asked for" but the reality is that the state budget will just grow at a slower pace; it has not actually been "cut" in almost 30 years.

Here is a link to the partial veto letter that the governor wrote discussing why she deleted certain sections of the budget:  http://www.governor.wa.gov/billaction/2008/veto/2687.pdf

Although overall spending can certainly be questioned, there are key areas of state government that do require increased funding.  As the software and technology industry's voice in Olympia, WTIA advocates for things that help the growth and success of the tech indsutry and the state as a whole.  The number one priority is education.  This means a K-12 system that provides a solid and rigrorous curriculum that is based on high standards where testing is based upon the curriculum taught.  It means that students need to show better results in math and science.

In higher education, it means increasing capacity in STEM (science, technology, engineering and math) degrees, primarily at the four year institutions so that our state produces more qualified people for the technology sector.

Lastly, it means supporting economic and job growth by limiting regulations, keeping tax rates down and maintaining tax incentives for R&D and other activities that help companies grow.

Here are some highlights from the supplemental operating budget:

$56.8 million for increases in teachers' salaries, per Initiative 732.  $17.7 million is "catch up" money from when the legislature held off on granting the I-732 mandated increase the last time the budget was tight back in 2001-03.

$3.2 million to develop math "end of course" exams, which will replace the math WASL in 2014.

$142,000 for studying the supply and demand of math teachers.  Part of this study will look at differential pay for high demand teachers, such as those in math and science.

$300,000 for review and adoption of new math standards and curriculum.  Hopefully this will result in better curriculum and teacher training leading to better student achievement in math.

$1 million for UW's e-Science Institute.  Although UW requested $2 million for this exciting project, the legislature provided half that amount.  This will enhance UW research and allow for a much higher level of computational analysis for massive data sets and could leverage over $100 million in federal money for more advanced research.

$195,000 in the Dept. of Information Services budget for a broadband deployment initiative coordinated with the WUTC and CTED.  This is an effort to "map" the state's broadband resources, both public and private, perform "gap" analyses and spur high speed internet in areas that are currently lacking.

$500,000 in the WSU budget for community technology grants.  This will help community based technology literacy programs around the state improve computer and Internet skills for low income individuals across Washington.

In the state transportation budget, $150,000 has been appropriated for a Kitsap County telework/telecommuting project.  The aim is to reduce commute trips by at least 10% by having certain types of employees work from home on a regular basis.

Here are a couple appropriations in the budget that I came across that seem somewhat questionable:

$400,000 to the Pacific Science Center for hosting the "Lucy" exhibit.  While this is obviously a major cultural attraction that will not come around very often, if ever, should the taxpayers pick up this large of a tab?  The Science Center is obviously going to charge a fee for seeing it and also be recruiting sponsors to help pay for it so one has to wonder why it is in the state budget.  Luckily it is a one time expenditure that will not create an ongoing appropriation.  Maybe the Science Center should build up its own reserves for things like this.

$100,000 grant to the local organizing committee of Skate America to support the International Skating Union Grand Prix Series at the Everett Events Center in October, 2008.  Again, why are the taxpayers picking up the tab for this event?  Sure, it will be neat to have this event in our state but it seems like this money should be saved.  Maybe I am missing something here.

Here are a couple appropriations that are outright useless and should have been vetoed:

$1.276 million for a "health care work group".  This is a union backed effort to campaign for a government run health care system.  WTIA fought against the misguided bill that this money funds, SB 6333, which you can learn more about here:  http://apps.leg.wa.gov/billinfo/summary.aspx?bill=6333  This bill will do nothing to address health care costs or availability.  The WTIA wrote a letter asking for a veto of SB 6333 to no avail.

$6.2 million for implementation of paid family leave insurance.  Here is a completely misguided social program that has no funding source but promises $250 a week for 5 weeks for the birth or adoption of a child.  Benefits are to begin October 2009.  You can bet that taxes will be raised to fund this, either an employee payroll tax or a tax on business.  The $6+ million is just to build the system to take your money and give it away--not for any benefits.  Just imagine when benefits do begin and cost more than anticipated.  Not only will taxes have to be raised to pay for it but the benefits will compete in the budget against K-12 and higher education.

Supposedly efforts were made to create "efficiencies" to keep implementation costs down.  What actually occurred is that the requirement to verify birth or adoption of a child was eliminated as well as the ability for an employer to recover attorney costs or fees when the inevitable abuse of the program occurs.

Governor Gregoire has now begun campaigning in earnest for a second term.  Her only announced opponent is former Senator Dino Rossi, who barely lost in 2004 after two recounts.  I am sure you will recall how badly King County botched the vote counting.

You will decide by your vote if she gets another term or if Senator Rossi gets a chance to run the state for four years.  On the key issues that affect the technology industry, her record is mixed.  She has pushed for improvements to K-12, esepcially in math and science and has supported increased capacity in STEM degrees, along with other programs that help educate and train a high quality workforce.

However, on "business" issues her record is weak at best.  She has kowtowed to the unions on health care and other issues and allowed poorly thought out programs, like paid family leave, to become law without proper planning or funding.  It is very doubtful that she would stand up for business if taxes get raised by the legislature.  The tech industry should be very concerned about the loss or reduction of tax incentives for R&D in the next legislative session.

If you would like to know more about what happened in Olympia this past session, details on the state budget or getting involved in our government affairs activities, please contact me at Lmcmurran@washingtontechnology.org.