OPINION-EDITORIAL

June 27, 2003

Contact: Jason Mercier, Budget Analyst
(360) 956-3482

Locke . . . taking "efficiency" too far?

By Jason Mercier, Evergreen Freedom Foundation
While it is encouraging to see Governor Locke working to improve the efficiency of Washington’s government, he may be taking his quest a little too far. A couple of his vetoes this year (as well as his past vetoes of independent, comprehensive performance audits) make the growth of state bureaucracy more efficient, but throw economy and effectiveness for taxpayers out the window.

First, for the sake of "efficiency," Locke vetoed a bill (HB 1531) that would have required his signature on new rules and regulations adopted by agencies. Thanks to the veto, agencies can continue to write and adopt hundreds of new rules for businesses and individuals at a rapid and efficient pace. Locke reasoned that the bill’s provision requiring his signature would "frustrate our work to make state government more responsive, more efficient, and more effective."

It is true that requiring the governor to sign off on rules may have slowed the process and volume of new regulations. After all, that was the point. Businesses are already trying to keep up with nearly 16,000 pages of regulations. Locke would only have to read and sign the regulations; businesses have to comply with them.

This simple check and balance on an agency’s rule-making power is as common sense as they come. As for the governor’s claim about a more responsive government, unless he is willing to allow voters to directly elect agency directors, the least he can do is shoulder the responsibility for the actions of his subordinates.

Second, the governor vetoed a section in the recent unemployment insurance reform bill (SESB 6097) that would have required online and telephone applicants to provide proof of their identity (such as a driver’s license). Though not perfect, the UI bill did take substantial steps towards removing some of the numerous fraud and abuse problems in the system.

Unfortunately, it seems the governor believes that requiring UI claimants to prove they are eligible is too burdensome. The employers footing the bill could probably tell him some new things about what "burdensome" means.

The vetoed anti-fraud provision stemmed from the legislature’s reluctant support of UI call centers. The Employment Security Department (ESD) requested in 1998 that the legislature permit UI applications over the phone instead of the then-required written and in-person procedure. Concerned about the potential for increased fraud if face-to-face contact was not required, the legislature commissioned the Joint Legislative Audit and Review Committee (JLARC) to study the effectiveness of the new UI call centers.

While JLARC did not find a direct correlation with increased fraud as a result of the switch, overpayments of UI benefits nonetheless did increase. As a result, the legislature inserted the following requirement into the recently approved UI reform bill (Section 28 (4) of SESB 6097):

The legislature finds that the shift by the employment security department from in-person written applications for unemployment insurance benefits to call centers and internet applications has increased the potential for fraud. Therefore, the employment security department must require claimants filing initial and weekly claims telephonically or electronically to provide additional proof of identity, such as a valid driver's license, a valid identification card, or other similar proof specified in rule by the department.

Locke responded by vetoing this section, claiming it "nullifies all the advancements and efficiencies gained with TeleCenters and Internet filing." He also stated that requiring proof of identity would "place a burden on individuals who live in rural areas" who are not near an unemployment office.

Regarding the "advancements and efficiencies" of call centers, the JLARC audit determined that forecasted cost savings are not occurring and ESD still is not meeting federal standards for timeliness and quality. Not surprisingly, the audit determined that individuals (both eligible and ineligible, it seems) prefer being able to telephone for UI benefits rather than meet face-to-face with state officials.

While providing proof of identity may be a burden to those who wish to make fraudulent claims, it shouldn’t be a problem for individuals who are truly eligible for service. In fact, eligible recipients, as well as businesses, would benefit from the checks and balances because less money would be used up for improper purposes. At the end of the day, all UI benefits come from an employee’s potential salary and benefit increases. The cost of UI is not shouldered by the employer alone.

Governor Locke’s quest for efficiency should not come at the expense of the equally important quest for effectiveness and economy. Government’s purpose is not to grow bigger faster, but to effectively provide necessary services to those who need them as economically as possible.

Jason Mercier is a budget research analyst for the Evergreen Freedom Foundation, a non-profit public policy research organization based in Olympia.

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org