WSLC 2003 Legislative Report

Midway through the 2003 legislative session, business lobbyist Carolyn Logue of the National Federation of Independent Business was quoted in the Yakima Herald-Republic as saying: "If the one thing we do is get out of here with no new taxes, we’ve had a good year."

Well then, there’s no other way to describe the success of the corporate legislative agenda in Washington state than to say they had a spectacular year. They not only got their no-new-taxes budget, as chronicled in this Legislative Report and Voting Record, they scored major victories on unemployment insurance, workers’ compensation, and preserving and extending business tax breaks.

A banner year for business isn’t necessarily a bad thing. Contrary to political rhetoric, organized labor is not opposed to creating and maintaining good jobs. Unions have demonstrated their support for addressing legitimate business competitiveness issues time and again. The problem is when right-wing anti-worker ideology seeps into the corporate agenda. That’s what happened this year in a number of areas and tremendous harm was done to working families in the name of business competitiveness.

Business lobbyists like Logue were granted new authority over how our state spends its money. Corporate interests were the only constituency invited to participate in Democratic Governor Gary Locke’s Priorities of Government exercise that shaped his budget proposal. And thus, in a year that the state faced a $2.6 billion revenue shortfall, the governor proposed no new revenue to mitigate severe cuts in state services. It included no repeal of business tax loopholes costing literally billions of dollars a year to mitigate layoffs and pay cuts for state employees. (And by the way, that’s what freezing wages and increasing health care costs is -- a pay cut.)

House Democrats proposed a more balanced approach: one dollar in new revenue for every three dollars in service cuts. In doing so they offered a one-time 2% raise to state employees and teachers, funded the home-care workers’ contract and avoided some of the worst health care cuts for the working poor. But Senate Republicans, Governor Locke and business lobbyists boxed them in, demanding no new taxes. And they prevailed.

But setting aside obvious partisan inclinations on government budgeting, why was the all-powerful business community so adamant and partisan about cutting government services? It’s easy to understand why businesses would want to restrain taxes, but do they have a legitimate case they are overtaxed? A brand new 2003 study by the conservative Tax Foundation ranks Washington as having the 8th best business tax climate in the nation.

At some point the consequences of maintaining the no-new-taxes position are too high, even for the business community. That’s why they so strongly supported raising the gas tax, because our transportation system is literally in crisis. But don’t they also argue our higher education system is in crisis? What about our health care system?

In other states facing similar revenue shortfalls, business groups and the Republicans they support took a more moderate approach. For example, the Oregon Business Association called for imposition of a new sales tax there. Republican governors in states from Idaho to Alabama have proposed significant tax increases in addition to service cuts.

But not here in Washington. Here, the business lobby adheres to the right-wing philosophy that a little "belt-tightening" will fix the problem. But at what price? Health care services for the working poor were slashed, which means some parents will be unable to afford new point-of-service charges for their children and more uninsured people will end up seeking care in emergency rooms, driving up everyone’s costs. Home care workers were denied a fair wage with benefits, which harms worker recruitment/retention efforts and will end up costing the state significantly more to put people in adult-care homes. State employees and teachers face layoffs and pay cuts, which harms all state services from education to public safety to transportation.

It’s worse than short-sighted. It’s fiscally irresponsible and socially reprehensible.

Washington’s unemployment insurance (UI) system was gutted with the passage of 2ESB 6097 (See Senate Vote #15 and House Vote #10.) In the final analysis, the looming deadline of Washington’s bid for Boeing 7E7 assembly work convinced Governor Gary Locke and many other Democrats to join Republicans in granting the business lobbying community carte blanche to change our state’s entire UI system.

Weekly unemployment benefit checks for more than 80% of workers losing jobs through no fault of their own will be reduced by $50 to $200 a week; the maximum weekly benefit will slide from 70 to 63 percent of the state’s average weekly wage; weeks of eligibility will drop from 30 to 26; our misconduct statute for denying fired workers benefits is now the worst in the country; good-cause reasons for quitting a job have been severely reduced; the benefit-of-the-doubt in gray area cases has been taken away from the jobless worker; and a UI financing system has been put into place that is so fragile and volatile that many businesses will be harmed, which will increase pressure for future benefit cuts.

What ultimately passed is a complex series of changes. For more detail check out the WSLC's one-page summary (a PDF file) of the changes resulting from passage of 2ESB 6097.

The Washington State Labor Council, AFL-CIO will be working in the future to restore what working families lost during 2003’s undemocratic frenzy to appease business interests.

As has been the case every year since the Locke administration first proposed the rule in 1998, legislation was introduced in 2003 to repeal the state workplace ergonomic safety rule.

SB 5161 passed the Senate 30-19 (see Senate Vote #1) with several Democrats supporting it, including co-sponsoring Senators Marilyn Rasmussen, Jim Hargrove and Mary Margaret Haugen. But with the governor threatening to veto the bill, it died in the House.

Once again, the business community claimed the rule will cost Washington businesses some $725 million to comply, just in the first year. It’s a pretty impressive number and if it were true, the Washington State Labor Council would probably oppose it, too. But it’s pure fantasy.

That figure comes from a California consulting firm hired by the Association of Washington Business. It’s a study based on a survey of California employers about what they think California’s totally different ergonomics rule will cost them. It assumes that every business with 50 or more employees will pay at least $1 million a year to comply, a figure that doesn’t pass the straight face test. Our ergonomic safety rule says employers must do only what is "economically feasible" to avoid ergonomic hazards.

But the study’s most obvious flaw is that it assumes no benefit to preventing workplace injuries. The truth is, many businesses like Boeing and Weyerhaeuser implemented their own ergonomic safety program long ago because they knew it would save them money by reducing injuries and lost time, and most importantly to their bottom lines, it would cut their workers’ compensation premiums.

Organized labor supports the rule because it finally addresses the No. 1 workplace safety problem, preventable musculoskeletal injuries suffered by 50,000 workers annually that cost $400 million in claims every year. You can estimate the cost of lost wages and higher employer premiums, but you can’t put a price on the effects these debilitating injuries have on workers and their families.

The bottom line: Washington’s workplace ergonomic safety rule is a win-win for employers and workers.

Despite all this, the pervasive anti-government ideology among corporate lobbying groups is that the state shouldn’t force businesses to do anything. So knowing the repeal bill faced certain death in the House, the Building Industry Association of Washington, with support from other business associations, spent $400,000 on paid signature gatherers to put Initiative 841 on the ballot. (Among the lies reportedly told by paid petitioners was that catchers for the Seattle Mariners wouldn’t be able to play an entire game because of ergonomic restrictions on worker squatting.)

The BIAW says it will spend at least $1 million to pass I-841, which would not only kill the ergonomic safety rule, it would prevent the state from issuing another one. And again, they are using the phony $725 million-a-year compliance estimate to try to make their case.

Organized labor will actively oppose I-841 and counter business lobbyists’ lies with the truth about what the ergonomic safety rule is, and what it will save employers and workers.

What happened that day has been spun into a myth now accepted as fact. Subsequent national events and trends have fueled the myth to such an extent that its spinners now control our state government agenda. They can now write sweeping new laws in the wee hours of the morning that are passed literally within hours.

That March 21 was the day Boeing announced it was moving its headquarters. The spinners are state Republicans and corporate lobbyists. And the myth is that our state has a hostile business environment.

The next day, the media were inundated with cookie-cutter press releases from GOP lawmakers blaming Boeing’s move on the state’s anti-business environment. Party leaders were quoted in statewide -- and national -- media touting our state as a rotten place to do business.

Boeing, however, repeatedly said the state’s business environment was a concern, but had nothing to do with its decision to relocate its headquarters.

But it didn’t matter. The state lost a symbolic part of its identity. Blame had to be assigned and the quickest blamer out of the gate was the party of personal responsibility. As usual, they blamed government.

Gov. Gary Locke responded by creating a Competitiveness Council of corporate executives to develop a wish list of pro-business legislation. Then he made those recommendations his priorities. Some were supported by labor, like investment in education and transportation, but many were anti-worker ideological leftovers: deregulation of business and privatization of public services.

Political momentum for this competitiveness agenda grew as unemployment rose, despite the fact that job loss was caused by events and trends that had nothing to do with state government.

The 9-11 attacks decimated the airplane market and Boeing shed tens of thousands of jobs, accelerating its plan to contract out more work. The dot-com bust hit our state disproportionately hard. The phony energy crisis delivered a death blow to our aluminum industry. International trade policies continued to harm our agriculture, forest products and manufacturing sectors.

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In fact, the entire U.S. economy under President Bush has suffered an extended slump with millions of jobs disappearing at a clip not seen since the Great Depression. (Is the entire nation, then, suffering from a hostile business environment?) Plus, corporate accounting scandals rocked the stock market, shook investor confidence and prolonged the downturn.

But back here in Washington state, lawmakers have invited CEOs to do our state’s accounting. After successfully blaming state job losses on our state government, business lobbyists won a seat at the table for Gov. Locke’s well-marketed Priorities of Government budget exercise. Corporate interests were the only constituency invited to participate in shaping our state government’s "priorities."

Naturally, they came up with a no-new-taxes budget decried by nearly everyone but them; a piece of work acclaimed by the right-wing talk radio host who lost the 2000 gubernatorial election as something he would have been proud to have written. Stunned by their good fortune, Senate Republicans tweaked this political gift, and then sat back and watched House Democrats squirm. But they recognized an even greater opportunity.

Once Boeing announced its 7E7 bidding process, all-out panic set in. And you know what else happened if you read this Legislative Report.

In the case of the unemployment insurance reform, it was renegotiated and rewritten in the Boeing House lobbying headquarters just hours before legislators voted to pass it.

Wouldn’t it be a scandal and outrage if this happened in Washington, D.C.? Corporations rule the roost there as well, but not with the overt, unquestioned access and influence they enjoy here. Yet many here appear blasé about this state government hijacking. Is it because a Democrat invited them into the cockpit?

Let’s hope the governor and legislators take a deep breath before they return to the scene of the crime in Olympia. Maybe next year they’ll take an objective look at the state’s business environment. Maybe they’ll stop parroting phony rankings and statistics generated by self-interested corporate lobbyists and the think tanks they finance. If lawmakers do this, they’ll see another picture.

I could show them a 2003 Tax Foundation study that ranks Washington state as having the 8th best business tax climate in the nation. I could show them a university study that found the Seattle-Tacoma-Bremerton region to be the most competitive business climate in the entire United States.

I could name for them five national retailers in the past year that analyzed our tax laws, work safety and minimum wage rules, our workers’ compensation and unemployment systems, and chose Washington over neighboring states to build and run major distribution centers.

And if I had a time machine, I could take them to the years immediately preceding March 21, 2001, and show them a Washington state economy that was the absolute envy of the nation. With the same business taxes and regulations we have now (or had before this year), our state was generating more jobs than we had qualified workers to fill, and more state revenue than the government was allowed to spend.

They say that in politics perception is everything. Well, working families are paying a steep price for the false political perception that our state is anti-business.

Any objective analysis of the 2003 session would conclude the exact opposite. Our government is pro-business to a fault.

The Legislature rejected the state home care workers’ contract in 2003, leaving tens of thousands of home care workers without any health or workers’ compensation coverage. Though this was a major disappointment, home care workers’ stepped-up presence and pressure at the Capitol did win them a 75-cent raise. They vow to return and keep fighting for a living wage and benefits.

The home care workers voted for representation by Service Employees International Union after a 2001 ballot measure granted them the right to organize. They were motivated by years of neglect that had left wages at $7.68 an hour with no benefits. Last fall, the union successfully negotiated a contract with the Home Care Quality Authority granting a $2 raise over two years, plus health benefits and workers’ compensation coverage at an estimated cost of $100 million. But with the 2003 Legislature in full budget crisis mode, lawmakers pleaded poverty.

"It’s $100 million we don’t have," said Senate Ways and Means Committee Chairman Dino Rossi (R-Sammamish). But by filing the contract in the Proposed New Expense column, Rossi and other short-sighted Republican leaders ignored the costs associated with not approving the contact. As pointed out in a Spokesman-Review editorial supporting the contract: "Many caregivers are paid less than half of what it would cost the state to put a person in an adult-care home."

House Democrats passed a regular session budget 52-46 (see House Vote #4) that included contract funding, but the Republican-controlled Senate consistently opposed honoring the contract. Late in the session, when it became clear the Senate would reject the contract, the union offered to return to the bargaining table to address some of the senators’ concerns. That offer was rejected.

In the end, House Democratic leaders joined Republicans in undermining the bargaining process. The final budget they negotiated, which was backed by a majority of House Democrats (see House Vote #7), ignored I-775, rejected the home care contract and unilaterally imposed a smaller raise. Imagine if a private sector employer rejected a contract proposal, refused to return to the bargaining table, and simply set a smaller raise.

SEIU Local 775 is now back at the bargaining table to renegotiate the home care contract and it will again be a major legislative issue for labor next year. Legislators who voted to undermine collective bargaining will have an opportunity to "redeem" themselves by working to honor and fund the home care contract in the 2004 supplemental budget.

The outright hostility of many politicians in both parties towards the collective bargaining process bodes ill for all state employees who finally won that right in 2002. They begin bargaining in January 2004 and members are expected to vote on an agreement by Oct. 1, 2004, a month before the election.

One of the business "competitiveness" measures approved in the final hours of the second special session was SB 5271, a labor-opposed measure to restrict eligibility for workers’ compensation hearing loss claims that didn’t even receive a public hearing in the House.

Under the new law, starting in September 2004, workers are only eligible for Permanent Partial Disability awards if they file claims within two years of the last injurious exposure. The current standard is two years within notification by a doctor that a worker has suffered hearing loss as a result of occupational exposure. The effect of the change will be to dramatically reduce eligibility because symptoms of hearing loss commonly appear years after the exposure and are not recognized as hearing loss for a time. It is rare that a worker suffers relatively immediate hearing loss from work-related exposure.

Labor had proposed compromise legislation that would have reduced PPD awards 20% and required filing within two years of retirement. The Department of Labor and Industries accepted this compromise, but business groups insisted on the original SB 5271 and House leadership ultimately allowed a last-minute vote. It passed 69-21 (see House Vote #9).

Business groups have announced they want more cuts to worker’ comp benefits and a reduction of L&I oversight. Labor expects a full-scale attack on injured workers in the 2004 session.

The No. 1 issue cited by the governor’s Competitiveness Council was transportation. Labor played a key role in supporting the transportation funding package finally approved in 2003 after years of false starts, conflicting ballot measures and outright (and ultimately unfounded) fear of Tim Eyman.

"This represents the first major investment in highways, ferries, rail and public transportation in 13 years," said Rick Bender, president of the Washington State Labor Council who chaired the Senate Transportation Committee when he served in the legislature. "This is clearly the most positive accomplishment of 2003 in terms of improving our business climate and highway safety."

The state’s share of the gasoline tax increased 5 cents as of July 1, the first increase since 1990. More than 20 years of neglect have put the state’s transportation network on the verge of collapse. Since 1980, our state’s population increased 43 percent while vehicle miles driven jumped 88 percent. But capital investment in transportation actually decreased as a percentage of personal income.

The $4.2 billion revenue package was approved (see Senate Vote #11 and House Vote #6) after passage of some labor-backed efficiencies that had been part of last fall’s failed Ref. 51. They include assuring accurate prevailing wage rates, expanding Department of Transportation apprenticeship opportunities, a DOT employee recruitment and retention program, and regular performance audits.

During the regular session, the pharmaceutical industry’s lobbyists succeeded once again in killing the prescription drug bill. But this year, pressure mounted to address the issue during the special extended sessions, and ultimately a compromise bill was passed and signed into law that represents a significant victory on the issue.

Rep. Eileen Cody (D-Seattle), an SEIU member and Group Health nurse, sponsored HB 1214. It could have saved the state, and all consumers, millions by consolidating purchasing and buying drugs in bulk from a preferred drug list. As in other states, an independent expert panel would assess similar drugs and develop the list. Doctors and patients could opt out if they wanted a drug not on the list by simply writing "prescribe as written." Private entities would be allowed to participate in the pool so everyone could reduce drug costs.

HB 1214 was supported by a remarkable coalition led by Washington Citizen Action that included the Service Employees International Union and other labor organizations, seniors’ groups, the Washington State Medical Association, women’s groups, the pharmacists’ association, social advocates and others. It passed the House early in the session 64-33 with bipartisan support (see House Vote #1).

But at the urging of drug industry lobbyists, Senate Majority Leader Jim West (R-Spokane) and Senate Ways and Means Committee chair Dino Rossi (R-Sammamish) blocked its consideration, and refused to allow a Senate floor vote when it became clear it was certain to pass. A similar bill passed the Senate 27-20 last year.

Instead, they pushed through a measure, quickly dubbed the "placebo bill," that created a program providing nominal drug-purchasing assistance to certain low-income seniors. No funding was specified for the $15 million a year program. It was an industry-supported political move to undermine support for HB 1214 and to allow Republicans to say they were doing something about the drug issue.

But it didn’t work, and pressure mounted again to consolidate drug purchasing. When Governor Locke called the special session, he included the prescription drug issue on the list of items he wanted addressed.

To his credit, Sen. Alex Deccio (R-Yakima), with support from Sen. Shirley Winsley (R-Fircrest), set out to forge meaningful legislation and talks commenced on a compromise. A new agreed-upon bill created a purchasing pool but restricted participation to state employees, disabled people and seniors whose income is less than 300% of the poverty level. The original bill would have allowed private health plans, city and county workers and private individuals to participate as well.

All legislators, lobbyists and citizens who fought for this bill deserve our thanks. It represents a significant victory that can be built upon.

No fewer than 13 bills were filed this session seeking to freeze/lower our state minimum wage as approved by voters 2-to-1 in 1998. Here are a few:

Proponents of these bills attempted to link our state’s unemployment to the minimum wage rate without providing any causal evidence. Their lobbyists were countered by an Economic Opportunity Institute analysis that showed the law is helping the lowest-paid workers as intended with negligible impact on employment and inflation.

Of the 13 anti-minimum wage bills, only one passed either house: SB 5697 on a 25-24 roll call (see Senate Vote #3). It died in the House.

All of these anti-minimum wage bills also contained so-called emergency clauses that would have rendered them immune from citizen repeal by referendum. (The apparent lesson from the builders’ successful 2002 referendum to repeal unemployment insurance reform: everything is an emergency.)

And if these bills were "emergencies" last year, look for the agriculture industry lobbyists to try to inspire outright panic in 2004. Two major asparagus processors this summer announced they would close canning operations in Washington, and industry lobbyists are blaming our state minimum wage. Problem is, we’d have to lower that wage to almost nothing in order to "compete" with Peru, which has flooded the asparagus market since the U.S. government began providing them incentives to grow asparagus instead of illegal drugs.

Despite a $2.6 billion budget hole that led to severe public services cuts, plus layoffs and pay cuts for state employees, the legislature in 2003 continued to add to the more than 400 business tax breaks on the books that cost billions annually. New tax breaks were approved for Boeing and WaferTech, and expiring ones were renewed for many others.

Organized labor does not oppose all business tax breaks, and has supported some to rescue ailing industries and preserve good family-wage jobs. But given dire budget straits, the WSLC supported answering the question posed by Senate Minority Leader Lisa Brown (D-Spokane): "Are all 400 tax loopholes more important than the state’s Basic Health Plan?"

HB 1869 required performance audits of all tax breaks and credits "to determine if their continued existence will serve the public interest." It sought to apply the same standard to tax breaks that right-wing conservatives routinely seek from state agencies: Prove they are effective. It would inject badly needed accountability for the job promises routinely made by tax break-seeking corporate lobbyists.

Unfortunately, the House voted 51-47 (See House Vote #2) to accept an amendment by Rep. Skip Priest (R-Federal Way) that ruined the bill by allowing the party caucuses to determine who serves on the auditing commission. That change turned an independent citizens’ commission into a politically partisan panel, and eliminated any objectivity the audits might have. The amended bill was then approved 59-38, but wasn’t allowed a Senate hearing or vote.

This bill would have just required reports to legislators on which tax breaks were meeting their job creation and maintenance goals. It wouldn’t have required repeal of any of these tax breaks.

The same hypocritical Republicans who killed the bill argue government should be run like a business. If CEOs were to engage in such blind investment and concealment, they would face shareholder lawsuits, federal prosecution, or worse -- a possible appointment to President Bush’s cabinet.

There are many more stories included in the print version of the WSLC's 2003 Legislative Report on issues like apprenticeship, the capital budget, banning mandatory overtime for nurses, medical monitoring of farm workers who use pesticides, and much, much more. Email us and request a free copy.

June 3 -- At what price, competitiveness? (Comparing Business and Labor's UI proposals)
May 20 -- Tone down the rhetoric for 7E7's sake
May 12 -- A time for unapologetic Democrats; House gives up on pay raises; workers' comp
April 25 -- Fast and furious budget action; and "the Boeing agenda"
April 18 -- Finally, some balance in the House; plus more re: apprenticeship, charter schools
April 11 -- NO MORE TAX EXEMPTIONS!
April 4 -- Senate OKs class-warfare budget; plus, AWB: Creating jobs for the good of humanity
March 28 -- All-cuts budget alarms voters; plus transportation proposals and election bills
March 21 -- Paying a price for neglect (re" Home care workers' contract; plus a bill roundup)
March 14 -- Job-Killing Bulls--- (re: Olympia rhetoric that pro-workers bills are all "job killers")
March 7 -- What a Difference a House Makes
Feb. 21 -- Workplace safety in jeopardy (re: BIAW ergo initiative, blocking WISHA inspections)
Feb. 14 -- MORE business tax breaks?! (re: digging a deeper budget hole with no accountability)
Feb. 7 -- Commerce and ANTI-Labor? (re: workers' comp, minimum wage and transportation)
Feb. 3 -- Now is the time... to pay less? (re: workers' comp and minimum wage)
Jan. 24 -- Drug bill off to a strong start; competagogues go after ergonomics rule again
Jan. 17 -- It's the Economy, Stupid! (re: "competagogues" and Washington's business environment)
Jan. 10 -- A Question of Priorities (re: explosion of corporate influence on government)