Will the legislature raise new revenue?

By Jeff Johnson

As 2011 draws to a close, the effects of what is a really a second “Great Depression” continue to ravage the Washington State economy, our public budgets, our critical social services, and our safety net. Unfortunately the legislature was able to do little in December to help.

On December 14, after sending the Governor an administrative savings bill that reduces the $2 billion budget deficit by 24 percent, the legislature adjourned. While many expected more from the Special Session because of pressure from advocacy groups and the occupy movement both in Olympia and in legislative districts, no new revenues were raised and no jobs bills were passed. The real showdown over jobs, revenue and services will confront us in January.

It came as no surprise that the legislature was unable to solve a $2 billion revenue problem in an end-of-the-year Special Session. In November, Governor Gregoire put out a set of austerity options to cut $2 billion from the budget. Then just before the start of the Special Session she announced a willingness to support a temporary one-half cent sales tax increase. But no path to resolution was worked out between the Governor’s office and the House and Senate. And apparently there was no magic wand either.

The legislature can now do three things to increase revenue and create jobs. The question remains: What are they willing to take on, and how hard are they willing to fight?

First, a joint Senate and House proposal for an infrastructure bonding proposal could be passed with a 60% vote in the legislature. The House and the Senate differ in magnitude of the proposed bond offering and types of projects it would fund. But the common goal is to dedicate a portion of a capital revenue stream from which to bond in order to build or repair needed projects now to help lift us out of this depressed economy.

With $2 billion in infrastructure bonding we could create 15,000 construction jobs in storm water clean-up projects, energy retrofits, repair of bridges and state park infrastructures, etc.; create another 15,000 induced jobs in other sectors; and generate $30 million in sales taxes for our operating budget.

Thirty thousand jobs would lower our overall unemployment by more than 10 percent and our unemployment rate by 1%. Now this is something to write home about. At this writing the House is considering about $ 1.8 billion and the Senate somewhere between $850 million and $1 billion in infrastructure bonds. We encourage both houses to consider $2 billion.

Second, the legislature can securitize a small portion of operating funds through a simple majority vote (though there is still a legal question over whether it requires a 50% or 60% vote) allowing the legislature to borrow money from the future to pay for healthcare services and jobs now. This would be bridge financing until the federal Affordable Care Act and associated funding takes effect in 2014.

Finally, the legislature needs to raise new revenue. During the past three years $15 billion in budget deficits have been closed through $10 billion in service cuts and jobs cuts and approximately $5 billion in federal stimulus money. Now it’s time to raise revenue. Although the legislature could raise revenue by creating new taxes, raising existing tax rates, or by closing tax loopholes, it is unlikely that they will be able to meet the supermajority requirement imposed by I-1053. With supermajorities, politics and ideology trump good policies.

So the question is: Will the legislature put a comprehensive revenue package out to the public for a spring vote? A comprehensive package could close tax loopholes benefiting banks and corporations that have not paid their fair share over the years, create a wealth tax on our state’s highest income residents, create a state capital gains tax, and fund a working families tax rebate, returning a large portion of sales tax payments to workers in low-income employment. Any of these ways of raising or adjusting revenue would address both the grievances and the needs of the 99%.

The Governor and many senators are talking about raising the sales tax by ½ cent over the next three years. This is the simplest and quickest way to raise revenue. But since it is primarily the working class that will have to foot the bill, will the people vote for it?

Finally we need to watch out for any trades the Governor and legislative leadership are willing to make to send a revenue package of any sort to the people for a vote. Demonizing state employees, privatizing government functions, and attacking collective bargaining rights are all shortsighted and unacceptable.

The 2012 legislative session and political season will test the mettle of the 99%.
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Jeff Johnson is president of the Washington State Labor Council, AFL-CIO, and a member of PSARA.

Labor Day 2011: Honor those who built the nation

By Jeff Johnson

Labor Day is a time to celebrate the work that we do that has created the economic and social fabric of America.

When the Rev. Dr. Martin Luther King Jr. joined the striking sanitation workers in Memphis in 1968, he proclaimed that “all labor has dignity” and should be afforded the means to achieve the “American Dream.”

That “American Dream” has been rapidly unraveling during the current “Great Recession” and is under full scale attack by corporate America that won’t invest, banks that won’t lend, and politicians who would rather fight over fake political crises, like the debt ceiling, than create jobs.

As austerity budgets are imposed across our country, the great irony is that workers, the elderly, students, immigrants, the poor and the vulnerable, the ones who most suffer under these budget cuts, are being blamed for deficits they did not create.

Wall Street banks caused the immediate economic crisis by treating the economy as if it were their private casino and credit default swaps were their chips – and now these same banks sit on over a trillion dollars of assets and continue to dole out obscene bonuses to the very people who brought us the recession.

But the collapse of the U.S. economy and the world economy has had devastating impacts on working people. In the U.S. and in our state the unemployment rate remains above 9%. It’s twice that if you count those who have dropped off the unemployment rolls without finding work and those working part-time involuntarily. It’s three times 9 percent in the building and construction trades. And it’s higher still for youth and workers of color.

Not since the 1920s has there been such a gross disparity of income and wealth in our country. Workers and the poor simply don’t have the purchasing power to give the economy a boost.

Faced with plunging revenues and increasing demand for social services, state and local governments lack the resources to invest in the social, physical and public infrastructure needed to help strengthen the private economy. Some states are using their deficits in an attempt to crush public employee unions and devastate state and local safety nets.

For several decades our economy has been weakened through policies that have accelerated the concentration of wealth at the top: Deregulation of the financial industry and a tax policy that coddles the wealthy and rewards employers for off-shoring U.S. manufacturing jobs.

Free trade agreements have deindustrialized the U.S. economy through the loss of 50,000 manufacturing plants over the last ten years, have run up huge U.S. trade deficits; and have failed to protect the workers’ most basic labor, environmental, and human rights.

Wisconsin, Ohio and other states have exploited their deficits to eviscerate the collective bargaining rights of public employees. Their public employee unions had grown too influential, it was argued, created too strong a voice for working people and the social safety net, and were therefore responsible for the deficits.

The community response was that Governors Walker and Kasich had severely overreached. People understood that the recession, and not the unions, had caused the deficits.

The popular uprising in Wisconsin has led to the recall of two Republican state senators. In Ohio, citizens have gathered 1.3 million signatures to refer that state’s anti-collective bargaining law to this November’s ballot.

At the federal level we have the manufactured debt ceiling crisis and the resulting “super committee” that will determine our country’s spending and revenue direction. Are the deficits we face as a nation the result of overly generous Social Security, Medicare, and Medicaid benefits, too many workplace health and safety inspections, and too much spending on monitoring clean water and air? Or are they the result of an unfair tax system, a financial industry out of control, trade policies that weaken our overall economy, and the financing of two wars?

We in labor believe the question answers itself. We believe that as a nation, and as a state, we need to confront the real crises facing us –The burning need for jobs, for revenue and for the restoration of moral leadership.

We need to create public jobs programs on the scale of the Works Projects Administration and the Civilian Conservation Corps pf the 1930s. Every state has failing transportation infrastructure – roads, bridges, transit - that we can invest in. We could energy retrofit public buildings creating tens of thousands of jobs, creating demand in the clean energy sector, and reducing our carbon footprint. We could invest in smart energy grids and broadband expansion creating tremendous common good and creating demand for privately produced products. All these investments would create employment, income, and consumer demand.
We need to oppose “Free Trade Agreements” that create substantial net job losses and tax policies that reward the off-shoring of U.S. jobs.

We need to enhance income support and safety net programs -- Unemployment Insurance, Social Security, Medicare, Medicaid, Trade Adjustment Assistance and mortgage relief for homeowners. These policies, too, will increase consumer demand.
In the short run the federal government needs to provide the funds for state and local governments to cover their recession-induced budget deficits. Providing strong state services, state and local employment, investing in our educational, health care, and transportation infrastructures helps create employment and demand and strengthens the private economy as well.

State and local governments need to use their procurement policies to purchase goods and services from local employers employing local workers wherever possible. Similarly, state and local governments can invest their tax receipt accounts, social insurance trust funds, and pension funds in banks that are committed to injecting credit into local communities to finance job-generating investments.

We need a fair tax system that provides the revenue to maintain healthy communities. In our state, we need to place a moratorium for several years on many of the 567 tax exemptions that choke off the revenue we need.

Above all, we need to remove the requirement that any measure to raise revenue or remove tax exemptions must have the support of two-thirds of the legislators. This undemocratic requirement gives a minority of legislators a choke-hold on state revenue and frustrates the will of the majority.

Dr. King used to say, “The arc of the moral universe is long, but it bends towards justice.” To bend that arc will take courage and moral leadership. Join us in bending that arc toward justice!

(Jeff Johnson is President of the Washington State Labor Council, AFL-CIO, and a PSARA member.)

Selling out injured workers

By Jeff Johnson

Just a month after celebrating the 100th anniversary of Washington’s workers’ compensation system, Governor Christine Gregoire, along with Senate Democrat and Republican leadership and House Democrat leadership, passed HB 2123, undermining the security of the safety net for injured workers by approving “structured settlement agreements” (compromise and release agreements) whereby workers will receive less than what they are entitled to under the law.

Injured workers 55 years of age or older, ratcheting down to those 50 or older by 2016, will be able to settle their claims at less than their statutory amount. You might ask why workers would agree to lower their benefits. For many workers it won’t be a choice. Strapped financially from receiving only partial wage replacement benefits, many injured workers will accept a lump-sum payment paid out over several months to meet family needs. And once the money is gone, they are just out of luck.

And it will happen. The Department of Labor and Industries assumes that the workers’ compensation state fund will save $335 million in fiscal year 2012 and over half a billion dollars by 2015. Most of these so-called savings will be in the form of lower benefits to injured workers.

Even worse, these settlement agreements are a lure for private insurers. After Initiative 1082, that would have allowed private insurance into our comp system, was defeated by nearly 60% and was voted down in every county, HB 2123 lays out a welcome mat for the private insurance industry. Denying claims and reaching settlement agreements are the means by which private insurers profit in the workers’ compnsation arena. Until now, Washington’s workers’ compensation market has not been all that attractive to private insurers. HB 2123 changes that.

HB 2123 also places a one-year cost of living freeze on injured workers’ time-loss and pension benefits, and offsets the value of a permanent partial disability award against an injured worker’s pension award – both these provisions will lower benefits for our most disabled workers.

The bill includes a positive program modeled after the Oregon “stay at work” program. This measure incentivizes small and medium size employers to bring their injured workers back to employment through offering wage, equipment, and training subsidies to the employer for 66 days. If this works, it will return workers to the job more quickly and reduce long term disability and costs.

The bill also sets up three studies which will look at occupational disease, structured settlement agreements, and the claims management process. Finally the bill continues some funding for health and safety grants that focus on workplace safety training.

While labor could have lived with many portions of the bill, the radical change to compromise and release is a huge and grotesque corporate give-away at the expense of our older and most disabled workers. Shame on the Democrats for selling out injured workers.

(Jeff Johnson is president of the Washington State Labor Council and a PSARA member.)

Bending the Arc - Together

By Jeff Johnson

Recently I was elected President of the Washington State Labor Council, AFL-CIO. As a trade unionist for 31 years and a member of the labor movement for even longer, it is both my honor and privilege to take on this job and to work with you for a stronger movement and a more just society. At the get-go, I also want to say that I am a proud member of PSARA, joining the first moment our dear friend Will Parry asked me.

One of my favorite quotes from the Rev. Dr. Martin Luther King Jr. (paraphrasing a 19^th century preacher) is this:  “The moral arc of the universe is long but it bends towards justice.”  Of course Martin Luther King was referring, not to the physical laws of nature, but rather to the fact that social change occurs when the collective will and strength of the people “call the question” on those in power.  The labor movement has long worked at bending this arc.  I believe it has yet to play an even more important role.

Our power as workers comes from speaking with one voice. Workers have a stronger voice at work and in the legislature and Congress when our union density grows. While it is critical that we grow our union density, particularly in the private sector, it is at least as important to build our labor and community movement density.

Union density in Washington State in 2009 was 20.2% of the workforce,  fourth highest of all 50 states. This number does not include the 1,000 members of PSARA or the members of State Alliance for Retired Americans, the Pierce County ARA, or our local union retiree associations. Labor movement density rises when we add our retiree advocates to the numbers. And frankly, my experience with PSARA suggests that if we were measuring activism, and not just numerical density, each retiree activist ought to be counted two or three times.

But brothers and sisters, we are in a world of hurt. Not since the late 1920s has there been so grotesque a disparity in the distribution of income and wealth in the United States; in our state, poverty is at an all time high (one in four of our children lives in poverty); foreclosures are skyrocketing; and realistically when you include those who have given up looking for work because there is no work and those employed part time involuntarily, about 18% of our workforce is unemployed.

So we have hard work ahead. We have to organize more workers into unions, more retirees into the Alliance, and more community members into the movement. We need to set bold goals and then create realistic strategies for growing our labor/community movement density. I don’t think it is unreasonable to reach a density goal of 30% within the next 15 years.  

But to accomplish this we need to rebuild, and in some cases build for the first time, labor’s infrastructure. We need to identify, recruit and educate young people from the ranks of labor and the community to run for elected offices.  We need to develop sectoral organizing strategies, with a focus on “excluded workers.”

We need to drill down deep to reach into our rank and file with real news, analysis, and proposals.  We need to create a significant worker education center that provides leadership training for our labor and community members.  We need to strengthen our work with community groups and in particular with immigrant worker communities.  

And we need to rebuild an infrastructure for labor and community culture.  What’s wrong with having a little social life while we work? 

We can’t do this work without the support and activism of our retirees. You bring to the table an invaluable perspective, a sense of history, and a wealth of real-world experience. We need to work with you to recruit more members into PSARA and the Alliance and to find significant funding for your operations.

We need to create opportunities for you to mentor our youth as we work together to create a stronger and more just society. And finally we need you to help us develop our common strategy for organizing in the wider community for a shared sense of values and purpose.

The Washington State Labor Council and I look forward to working closely with you in 2011 and beyond.

Let us “bend the arc” together.