1	"“All political power is..." “All political power is inherent in the people, and governments derive their just powers from the consent of the governed, and are established to protect and maintain individual rights.” – Washington State Constitution, Article 1, Section 1
2	"“There is one thing..." “There is one thing stronger than all the armies in the world, and that is an idea whose time has come.” –Victor Hugo
3	Olympia, we have a problem
4	How did we get into this mess? It didn’t happen overnight . . . Chronic overspending Waste and mismanagement Anti-business climate Economic recession and terrorist attacks
5	Chronic overspending 10-year increase: State spending 75.5 Inflation 27.2% New employees during Locke tenure: 8,000 EFF released warning in 1999 2000 Supplemental Budget included 280 new or expanded programs June 2001 budget “balanced” by raiding $642 million from emergency reserves State overspent revenue by $1.1 billion in FY 2001 2003 Supplemental Budget increased spending by $136 mill.
6	Consider the facts . . . Washington state lost 96,300 jobs since December 2000 – 3.5% of workforce. California lost 83,800 jobs – 0.5% of workforce.
7	State revenue increasing in the next budget cycle 2003-05 est. revenue: $22,452 million 2001-03 est. revenue: $21,163 million Increase: $1,289 million
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9	Action from Olympia Passed more anti-business legislation: SHB 1268 – Collective bargaining for state employees HB 1248 – Expanded unemployment insurance benefits SHB 2663 – Increased liability for employers SB 6835 – Revised use taxes
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11	Keynesian Model—Business Cycle
12	Reality—Business Cycle
13	Is there any hope? Governor Locke speaks: “Better to eliminate whole lines of business and keep core functions in place much as the private sector does. What are your core missions? What are your core business functions? . . . Keep those intact, support them. Make those strong and get rid of other things.” – AWB speech, October 2001 Yes! There are solutions!
14	State officials need encouragement . . .
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16	Waste and mismanagement State’s largest programs have dysfunctional delivery systems: K-12 Higher Education DSHS Department of Transportation Health Care Services not reaching those who need them most
17	State auditor findings—State funds $952,105 in fraud uncovered $1.2 million overpaid; $1.9 million questionable Only 30% of agencies surveyed comply with internal audit requirements Liquor Board cannot properly account for its $421 million in sales Horse Racing Commission failed to collect $954,600 in gaming fees Ferry system failed 15^th audit in a row Ferry system lacks control over travel payments: may have paid two engineers $100,000 more than allowed
18	State auditor findings—State funds DSHS routinely delete up to 2,000 alerts of invalid SS numbers or deceased recipients per month DSHS has inadequate controls over drugs at Western State 37,000 ineligible individuals receiving health benefits; 4,000 on a waiting list $46,552 in checks missing from DSHS L&I paid $725,774 in worker’s comp to ineligible recipients, including incarcerated and dead L&I can’t account for m ore than $4.7 million in industrial insurance payments Employment Securities Division is not complying with eligibility requirements for unemployment insurance
19	JLARC findings Developmental Disabilities Program Up to 33% of children receiving Developmental Disabilities benefits ineligible Duplicate benefit payments being made No checks and balances, contrary to DSHS claims Nearly 50% of reported “field staff” do not work in field DSHS requesting more funding for additional field staff Washington Management Service 50% of new Washington Management Service managers do not manage anyone Average number of employees managed is 1 K-12 Special Education No evaluation measures for effectiveness of $1.1 billion program
20	State auditor findings—Federal funds Failure to comply with federal regulations Management problems and lack of internal controls Weaknesses in internal controls
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23	Comments from Milton Friedman When a man spends his own money to buy something for himself, he is very careful how much he spends and how he spends it. When a man spends his own money to buy something for someone else, he is still very careful how much he spends, but somewhat less what he spends it on. When a man spends someone else’s money to buy something for himself, he is careful about what he buys but doesn’t care at all how much he spends. And when a man spends someone else’s money on someone else, he doesn’t care how much he spends or what he spends it on. And that’s government for you.
24	Washington’s anti-business climate factors Energy Water Transportation Taxes Unemployment insurance Regulations Growth management regulations Mitigation fees Health care Labor unrest
25	Education Spending Washington spent $9,594/student in 2001-02 (NEA) Increase of $1,168 per student over prior year General expenditures: $437 more per student Capital expenditures: $701 more per student Per pupil expenditures 10.1% higher than national average
26	Education Performance Of WA students, 68% graduate (50% of minorities) 51% of graduates who enroll in community college need remedial courses
27	Education Staffing 62,743 certificated employees 58,919 certificated classroom teachers 1 teacher/17.1 students 3,824 certificated administrative staff 87,757 “other” employees
28	Teacher Salaries Average teacher salary: $43,480 With benefits and supplemental contracts: $57,500 Only 32% of total K-12 expenditures
29	How is the rest of this money spent?
30	New tools for vigilant citizens: WashingtonVotes.org WasteWatchers.net ChoosingLiberty.com Business Journal
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35	Be a Ten Minute Citizen! 10 minutes a day, 1 hour a week . . . Write to and speak with elected representatives and state officials Write letters to newspaper editors Call local radio talk shows Encourage local media to cover issues of importance Get involved in community events Teach your children and grandchildren the principles of liberty Tell folks about EFF’s website: www.effwa.org