Rep. Condotta’s 2015 legislative session update, May 15

Dear Friends and Neighbors,

Today is the 17th day of the Legislature's special session. We are in what is called a "rolling" special session - meaning the House and Senate are rolling from one floor session to the next without lawmakers actually being on the floor.

Budget negotiators continue to meet and work on finding agreements on the operating, capital and transportation budgets, as well as a transportation funding package.

Public hearings are being scheduled this week for fiscal committees and floor action has been scheduled for May 20. I am hopeful key budget votes will take place in the next couple weeks.

The major difference between the House Democrats and Senate Republicans budget proposals is Democrats want to raise and implement new taxes by about $1.5 billion. Republicans believe we can pass a fiscally responsible budget because of a 9 percent increase in tax revenue. That increase means we have $3 billion in additional revenue compared to the last budgeting period.

State spending was about $8 billion in 1985, $16 billion in 1995 and $23 billion in 2005. It took more than 100 years for state spending to reach $23 billion and now we are going from about $23 billion in 2005 to almost $40 billion in this next budget. Maybe it is time we look at our legislative priorities and have a serious conversation about reforming the way state government operates.

I continue to hear from people around the district  concerned about the proposed increase in the minimum wage. There was a bill introduced in the Legislature that would have increased the minimum wage to $12 an hour. It passed the House on a party-line vote (51 Democrats voting "yea" and 47 Republicans voting "no"). However, it died in the Senate. I expect labor unions to push for an initiative on next year's ballot that could possibly raise the wage up to $15 an hour. I recently had a column run in some of the weekly newspapers around the 12th District. In case you missed it, I have included it below.

Teachers' strike

I am disappointed some local teachers' unions around the state have decided to hold one-day strikes to protest proposed education funding. The Washington Education Association (WEA), the state's largest teachers' union, has been running radio ads that make false claims about the Senate education funding proposal. I think it is important to clarify some of their misinformation so everyone knows what the facts are in the Senate budget, not what the WEA is sharing in their radio ads.

• WEA's claim: State Senate Republicans voted to "shortchange" pay and benefits for teachers and school staff.
  • FACT: The Senate operating budget would bring teacher COLAs to voter-approved levels.
• WEA's claim: State Senate Republicans voted to increase class sizes - even for kids in high-poverty schools.
  • FACT: The bipartisan Senate capital budget would build 2,100 more classrooms to reduce K-3 class sizes.
• WEA's claim: The Senate Republicans are likely getting an 11 percent pay increase.
  • FACT: The Washington Citizens' Commission on Salaries for Elected Officials determines lawmaker salaries and raises, NOT the Legislature. If the commission decides lawmakers will receive a raise, all lawmakers will receive a raise, not just Senate Republicans.

It is worth noting the Senate budget proposal this year gives K-12 the biggest share of spending seen in 30 years. They propose spending $2.7 billion more for K-12 than was spent two years ago. That is about an 18 percent increase.

While we won't know what education funding will look like until a final operating budget is passed, both parties and chambers seem committed to making a large investment in education and at a high enough level that certainly doesn't warrant a strike by teachers.

Sincerely,

Cary Condotta

Climbing the ladder to unemployment

Some lawmakers in Olympia this session want to change the minimum wage law. Unfortunately, they can no more change this law, than the laws of physics or economics. In short, the market will prevail and supply and demand will not be manipulated in the long term even if it sounds good on paper.

Those that support increasing the minimum wage do so under the false pretense that people will make more money, therefore spend more money and stimulate the economy in the process. They tell you it will lead to no change in employment numbers and may actually increase jobs. And last but not least, proponents claim this will decrease the disparity between rich and poor. Once again this flies in the face of economic law that has stood the test of time and will likely continue to do so indefinitely, or until we invent the perpetual motion machine.

The facts are these - unemployment, especially youth unemployment will rise. We already have one of the highest youth unemployment rates in the country.

You won’t see any increase in economic activity because no new money is created. For every dollar you add here it has to be removed from somewhere else. And once again, if you increase the cost of something the demand generally decreases. If we raise the price of gasoline by 30 to 40 percent do we buy more?

As far as closing the gap between the rich and the poor, Washington state is a perfect example. We have the highest minimum wage already but our state is not even in the top fifteen states in the nation in addressing income inequality. If a high minimum wage really addressed this issue wouldn’t our state be ranked higher?

Don’t forget an increase in the minimum wage would push all wages up not just the bottom wages. So, if the current minimum wage is about $9.50 and someone is making $11.50, what happens when the $9.50 goes to $12 an hour? To be fair, it would follow that the $11.50 would have to go to $14. This continues up the so-called “ladder” indefinitely creating an instant inflationary effect. In this case, the product most inflated is food products since it is a wage intensive industry. How does this help our fixed income folks?

This also effects the cost of government, specifically labor costs. As the wage ladder ripples through government labor costs it could mean huge tax increases will have to be levied to pay for it. With the most regressive tax system in the United States, those tax increases will hit lower income folks at four to five times harder than the high-income earners.

The result of an increase in the minimum wage is and has been higher costs, lower employment and more wage disparity. We are our own best example. Are there beneficiaries to this policy? Yes, large corporations and conglomerates that can spread the cost and afford mechanization forcing their smaller competitors out of business. So, it is great for the rich and their corporations, but bad for most people in general and small businesses. With an increase in the minimum wage small employers will likely postpone hiring, cut benefits, look to automation, raise the price of their product to cover labor costs or possibly close their doors. So, perhaps it is best we put the “wage ladder” away before we fall from it.

12^th District Rep. Cary Condotta has been a small business owner for over 30 years. He serves on the House Finance, Appropriations, and Commerce and Gaming committees in the Washington State House of Representatives.