Published: Wednesday, June 15, 2011
State budget progress is just a start
Gov. Chris Gregoire will sign the budget bill this week, just before flying off to the Paris Air Show. She leaves as the state economist delivers his official revenue forecast, which is expected to show another dip. Fair skies may provide brief respite from the economic turbulence on the ground.
The president says we've hit another bump in the road to recovery. Call it the washboard economy, or as columnist Mark Steyn puts it, "all bumps, no road." At this rate, the adopted budget may be in trouble before the end of the year.
Possible budget hassles shouldn't completely overshadow some important advances state lawmakers made this session. Changes in workers' compensation and unemployment insurance will make it easier for employers to put people back to work. The adopted budget made difficult, but necessary, decisions, including reduced health care and education spending, pension reform, agency consolidation and modest changes in contracting out. It's a better, more responsible budget.
As a state, however, we had a lot of catching up to do, with a lot more work ahead of us. While all 50 states ride the washboard, some are faring better than others and will be in better shape to capitalize when the economy returns to sustained growth.
Last week, Richard Fisher, the president of the Federal Reserve Bank of Dallas, told the Wall Street Journal editorial board that since the recession ended in June 2009, "Texas added 265,300 net jobs, out of the 722,200 nationwide, and by far outpaced every other state." That's about 37 percent. The second largest state, Texas represents just over 8 percent of the U.S. population.
While other states hemorrhage jobs, Texas captures them. Gregoire believes laws passed last session make Washington more competitive. While true, it's not enough.
The Texas success validates its business-friendly public policies. Among them: No income tax, no forced unionism, reasonable regulation, small government and fiscal responsibility.
Those are a few of the criteria political scientists William P. Ruger and Jason Sorens use in calculating "Freedom in the 50 States," a new study published by the Mercatus Center at George Mason University. Ruger and Sorens have created an index of personal and economic freedom. Among the many interstate comparisons published annually, the Mercatus rankings stand out for their transparency and common sense selection of variables.
The authors acknowledge their preferences. They lean libertarian. And with a libertarian willingness to engage debate "happily concede that different people value aspects of freedom differently." So they provide all the raw data and weightings on their website so others can create their own indexes.
Washington ranked No. 41 on the Mercatus economic freedom index; Texas ranked No. 15. South Dakota ranked first.
"Two of the most intriguing findings of our statistical analysis," they write, "are that Americans are voting with their feet and moving to states with more economic and personal freedom and that economic freedom correlates with income growth."
It's not a perfect correlation, but it matches executive perceptions. Nine of the states ranked as "best for business" by more than 500 CEOs surveyed by Chief Executive magazine are among the 15 most economically free in the Mercatus index. Texas headed the magazine's rankings; Washington was No. 34.
Here's what matters.
"Not surprisingly, states with punitive tax and regulatory regimes are punished with lower rankings, and this can offset even positive scores on quality of living environment," writes Chief Executive editor J.P. Donlon. "While state incentives are always welcome, what CEOs often seek are areas with consistent policies and regulations that allow them to plan, as well as intangible factors such as a state's overall attitude toward business and the work ethic of its population."
Washington can boast improvement. Employers have been cheered by some legislative outcomes. Nonetheless, it's amazingly difficult to get the right things done in Olympia. The state's abundant assets -- trade, technology, natural resources, brilliant innovators and skilled workers -- keep us competitive, but tax, regulatory and labor policies and inconsistencies weigh heavily on the liability side of the ledger.
As economic indicators stay stuck and jobs head South, Washington must step up its game. Lawmakers made a start this session -- only a start.
Richard S. Davis, president of the Washington Research Council, writes on public policy, economics and politics. His email address is rsdavis@simeonpartners.com.
The president says we've hit another bump in the road to recovery. Call it the washboard economy, or as columnist Mark Steyn puts it, "all bumps, no road." At this rate, the adopted budget may be in trouble before the end of the year.
Possible budget hassles shouldn't completely overshadow some important advances state lawmakers made this session. Changes in workers' compensation and unemployment insurance will make it easier for employers to put people back to work. The adopted budget made difficult, but necessary, decisions, including reduced health care and education spending, pension reform, agency consolidation and modest changes in contracting out. It's a better, more responsible budget.
As a state, however, we had a lot of catching up to do, with a lot more work ahead of us. While all 50 states ride the washboard, some are faring better than others and will be in better shape to capitalize when the economy returns to sustained growth.
Last week, Richard Fisher, the president of the Federal Reserve Bank of Dallas, told the Wall Street Journal editorial board that since the recession ended in June 2009, "Texas added 265,300 net jobs, out of the 722,200 nationwide, and by far outpaced every other state." That's about 37 percent. The second largest state, Texas represents just over 8 percent of the U.S. population.
While other states hemorrhage jobs, Texas captures them. Gregoire believes laws passed last session make Washington more competitive. While true, it's not enough.
The Texas success validates its business-friendly public policies. Among them: No income tax, no forced unionism, reasonable regulation, small government and fiscal responsibility.
Those are a few of the criteria political scientists William P. Ruger and Jason Sorens use in calculating "Freedom in the 50 States," a new study published by the Mercatus Center at George Mason University. Ruger and Sorens have created an index of personal and economic freedom. Among the many interstate comparisons published annually, the Mercatus rankings stand out for their transparency and common sense selection of variables.
The authors acknowledge their preferences. They lean libertarian. And with a libertarian willingness to engage debate "happily concede that different people value aspects of freedom differently." So they provide all the raw data and weightings on their website so others can create their own indexes.
Washington ranked No. 41 on the Mercatus economic freedom index; Texas ranked No. 15. South Dakota ranked first.
"Two of the most intriguing findings of our statistical analysis," they write, "are that Americans are voting with their feet and moving to states with more economic and personal freedom and that economic freedom correlates with income growth."
It's not a perfect correlation, but it matches executive perceptions. Nine of the states ranked as "best for business" by more than 500 CEOs surveyed by Chief Executive magazine are among the 15 most economically free in the Mercatus index. Texas headed the magazine's rankings; Washington was No. 34.
Here's what matters.
"Not surprisingly, states with punitive tax and regulatory regimes are punished with lower rankings, and this can offset even positive scores on quality of living environment," writes Chief Executive editor J.P. Donlon. "While state incentives are always welcome, what CEOs often seek are areas with consistent policies and regulations that allow them to plan, as well as intangible factors such as a state's overall attitude toward business and the work ethic of its population."
Washington can boast improvement. Employers have been cheered by some legislative outcomes. Nonetheless, it's amazingly difficult to get the right things done in Olympia. The state's abundant assets -- trade, technology, natural resources, brilliant innovators and skilled workers -- keep us competitive, but tax, regulatory and labor policies and inconsistencies weigh heavily on the liability side of the ledger.
As economic indicators stay stuck and jobs head South, Washington must step up its game. Lawmakers made a start this session -- only a start.
Richard S. Davis, president of the Washington Research Council, writes on public policy, economics and politics. His email address is rsdavis@simeonpartners.com.
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