Not since Booth Gardner occupied the governor’s mansion have the Democrats enjoyed such a good time in Olympia. The economy is strong. Employment is up. Surpluses have replaced a red sea of deficits. And party leaders appear to be working together, with the governor exercising disciplined leadership.
The risk they took last year – the gas tax increase – paid off when the voters affirmed it. Passing a gay rights bill this year, a much smaller risk, is likely to work for them as well.
Yet, as the session passes the halfway mark, they can still blow it.
Excessive pension benefits and unsustainable health-care spending will soon wipe out the state’s surplus. Construction-driven revenue surges will slow as the housing market cools. Last year’s gas tax hike won’t fund the Puget Sound region’s big-ticket highway projects. Overreaching today will compound foreseeable budget problems. In other areas as well, lawmakers must tamp down expectations. They seem too ready to distribute favors to business and union allies.
After Gardner’s heyday came the reckoning in 1993, when, with Mike Lowry as governor, Democratic legislators raised business taxes to erase a budget shortfall and adopted sweeping health-care reforms. They paid at the polls.
Voters passed sweeping tax and spending limits and elected Republicans.
Today’s Democratic leaders are showing more caution, courting business support from a playbook dating back to the Atari Democrats of the 1980s.
Then, the self-styled visionaries – does anyone remember Gary Hart or, for that matter, Atari? – tried to align their party with titans of the New Economy. They advocated “public-private partnerships,” technology investment and “targeted tax breaks.” It was the activist counter to Ronald Reagan’s domestic agenda of limited regulation, small government and low taxes.
Under Reagan, the economy grew. Time passed. The Atari Democrats morphed into New Democrats, and the Clinton administration pursued a “third way” partnership between government and business, forging strong alliances with tech leaders.
Conservatives say the Democrats’ approach amounts to picking winners and losers. That’s not exactly right. Politicians simply like sharing the limelight with popular winners. Typically, the favored industries are already poised to succeed. The tax breaks and public investment are just topspin, accelerating existing trends to give political leaders a “shovel moment” at a groundbreaking and to cement fund-raising relationships.
Today’s “pro-business agenda” highlights biotech, bioscience and biofuels, the glamorous, futuristic darlings in state capitols around the country.
Pouring more money into these ventures is like irrigating flooded fields.
Still, economic developers and affected businesses want the state’s oar in the water.
The unglamorous firms, however, don’t get the slap on the back; they get the back of the hand. Consider the implications of the well-publicized attempt to control employers’ health-care coverage. Backers of state-run health care have grown more sophisticated since the early 1990s. Now, they want to accomplish the takeover incrementally, targeting employers for regulation.
Labor’s friends in the Legislature have joined a union-backed campaign to dictate employer health insurance. Aiming at Wal-Mart, they’ve introduced a bill to require firms with 5,000 or more workers to pay 9 percent of payroll for health-care benefits. Boosters of the plan say it’s just a beginning.
Believe them.
While the bill appears stalled, the threat starkly demonstrates what’s at risk when lawmakers see themselves as the not-so-silent partners of every employer in the state.
Like yo-yo dieters who’ve reached their goal, legislators often return to their bad habits when there’s cash in the bank. This isn’t the time to go flabby. There’s much more to building an economy than doing a few favors for a favored few. Healthy economies and responsible politics work best when businesses compete on Reagan’s level playing field.
Not long ago, the Legislature acted to restrain high unemployment insurance costs, adopt a disciplined priority budget process, demand accountability in public education and hold the line on taxes. These bipartisan measures contribute to more efficient government and a strengthening economy. Yet, predictably, efforts to weaken them have been launched, unfortunately with some success.
Democratic leaders want to lock in their majorities in a state turning blue.
If they control spending, avoid regulatory overreach and don’t backslide, their chances will only improve.
Richard S. Davis, president of the Washington Research Council, writes every other Wednesday. His columns do not necessarily reflect the views of the council. Write Davis at rsdavis@researchcouncil.org or Washington Research Council, 108 S. Washington St., Suite 406, Seattle, WA 98104-3408.
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