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Senator Adam Kline

by Senator Adam Kline (Democrat, 37th District)

This Killing Budget…

I’ve said it before: This recession came like a tornado in the prairie, and did more damage to state government than any purveyor of tax-cut initiatives could have hoped to do. As a result, we made cuts under fiscal pressure that we know are unsustainable, and that will cost us more later on. For lack of space here, I’ll make this quick and a bit general.

Generally: We cut $4.6 billion in the final House-Senate agreement, about $200 million less than the original Senate proposal. Look for more cuts if the Revenue Forecast dips again. We left $727 million in reserves against that possibility. We got the House to agree not to assume some astronomical amount in savings from the privatization of the State Liquor Control Board’s liquor-distribution function.

K-12: We cut teacher salaries only 1.9%, not the original 3%, though we used the latter level for classified staff. We provide only $34 million, not $64 million, for K-3 class size reduction in high-poverty schools.

Higher Ed: We made another $600 million in cuts—made up in part with tuition increases of 14% to 16%, enough to put state college out of the reach of many young people from working families. At the same time, we made cuts in State Need Grant scholarships and in Work-Study funds.

Health Care: The Disability Lifeline program (formerly GAU), which formerly combined a $339 monthly cash grant with medical coverage has been altered. The medical coverage remains; the cash grant is replaced by a smaller rent-assistance grant and an even smaller stipend for essential needs. We expect to see more recipients at the food-banks and hospital emergency rooms. The Children’s Health Program avoided an admissions-freeze, but had its eligibility reduced to 200% of the poverty level. We cut grants to hospitals and community clinics. We preserved the Basic Health program, but continued the freeze on new enrollments.

Other: we reduce management-level jobs in the state agencies by 5-10%, in an effort to reduce pressure to lay off more line staff.  We rejected the Governor’s attempt to cut all funds for naturalization of new citizens, keeping $3.3 million for that purpose within DSHS and a separate $386,000 for naturalization classes to be provided by OneAmerica, a South Seattle non-profit organization.

Driving While Poor

Years ago, my friend the late Bob Markholt and other activists for the rights of working folks convinced me to take up a subject that at first blush seemed out of place on a progressive agenda: traffic infractions. When you continue to drive after your license was yanked for failure to pay fines, you’re charge with Driving While Licensed Suspended, in the Third Degree. We don’t throw you in debtors’ prison for failure to pay the increasingly high fine; we just take away the privilege to drive and leave you unable to earn a living.

You may have noticed if like me—I learned to drive in New York—you have earned a first-person familiarity with the traffic code: those fines are now in the hundreds of dollars, since we now rely on those dollars to fund the courts. (No New Taxes!) So in this recession, with increasing unemployment, an increasing percentage of ordinary folks can’t afford to pay. Then they are caught driving with a suspended license—and this time it’s not an infraction, it’s a misdemeanor, a crime. Driving While Poor.

These charges are filed routinely—and that’s the problem. They make up some 30% of the docket in District and Municipal Courts, which are under-funded and over-burdened in this recession. My previous ham-fisted attempts to simply repeal the law were unsuccessful, partly for good reasons—there are, after all, folks who could pay up but just won’t—and for reasons not so good—the cops could never admit it publicly, but they really, really like to be able to search your car, which they can do when they arrest you for a crime, but not an infraction.

So, duh! Don’t file the charge routinely. Make the prosecutors decide which charges to file, make them choose which ones are the real scofflaws and which ones the poor Joes who just need a nudge to the payment window, and maybe a payment-plan. That’s what my bill (SB 5195) did.

One for the Bicyclists and Walkers Among Us

As we learn more about climate change, and adapt our transportation system to the needs for non-automobile alternatives, it makes sense to accord more respect to them in the rules of the road. As a lawyer representing injured people, I have often known of situations in which a negligent driver had hit a pedestrian or bicyclist, causing serious bodily injury, but was punished only for Negligent Driving—a $250 fine. This doesn’t go down easy for bicyclists and pedestrians, myself included.  So I filed a bill to allow city and county councils to pass laws creating a new infraction, punishable by up to $5,000, where negligent driving leads directly to the death or serious bodily injury of a pedestrian, bicyclist, wheelchair user, or other “vulnerable user of the public highways.”

One might think this would be a slam-dunk. In fact, it took an extra year of lobbying by a bicycle advocacy organization. Automobile culture pervades the Legislature to an extent greater than in the state’s population—that’s my eyeball analysis, anyway. The stereotype of cyclists as effete liberals is still alive and well among some of my colleagues. Anyway, the bill (SB 5326) passed.

Foreclosure Prevention

This bill advanced in both houses of the Legislature, as SB 5275 in the Senate and HB 1362 in the House, and was a joint effort between Rep. Tina Orwall and myself.  Rep. Orwall, a Democrat from the 33rd District, got the pen for this one, as the House passed her version before the Senate passed mine.  Other players were Sen. Steve Hobbs, the chair of the Senate Committee on Financial Institutions, and Rep. Jamie Pedersen, Chair of House Judiciary, both of whom advanced the bill in their respective committees.

This was my second year, and Rep. Orwall’s third, working on this bill. At first, the banks stonewalled our efforts. Their party line, eagerly picked up by their Republican friends, was that the homeowners involved had just made bad choices, over-extending their credit and buying further up-market than their jobs and assets would support. (No mention of the banks’ far grander and more destructive role in the mortgage crisis that lead to an economic meltdown.)

This past year, the crisis made the front page just about every day because literally hundreds of thousands of people—many of them ordinary middle class people who were definitely NOT improvident in their choice of homes—were finding themselves evicted and at a profound loss.  The banks apparently decided, to their credit, that stonewalling would no longer work, and that it was better to engage in the legislative process than to continue to lobby for a No vote.

The result was a series of meetings that started in October, chaired by Kim Herman, the director of the Housing Finance Commission and featuring such unusual bedfellows as the regional VPs of major lenders led by the chief lobbyist for the Washington Bankers Association, Legal Services lawyers, mortgage companies, Statewide Poverty Action Network, we two legislators and occasionally the committee chairs.

SB 5275 and HB 1362 require banks which have issued 250 or more Notices of Defaults to Washington borrowers in the preceding year to pay a fee of $250 on each default.  The proceeds go primarily to fund housing counselors (lawyers or others who are versed in real estate, the mortgage market, or real property law). A small portion of the proceeds fund the public education and enforcement efforts of the Attorney-General’s Office.  The bill gives any homeowner in default the right to seek the advice of a counselor, and the right to seek a personal meeting with a representative of the bank who is authorized to grant a mortgage-modification to a qualified borrower. If that does not resolve the matter, the homeowner can seek mediation before a neutral third-party mediator, at a low cost paid equally by the lender and the borrower.

This bill doesn’t end the foreclosure crisis, and indeed there is little government can do to interfere in private contracts.  I will continue to seek passage of legislation, SB 5309, that will require a lender, or the holder of a mortgage, to prove at the time of issuing the Notice of Default, that it is in fact the legal owner of the mortgage.  That will be a tougher fight, but it’s necessary.  The news still carries stories of people ousted from their homes by Wall Street investment companies that were subsequent purchasers of a mortgage—somebody else’s mortgage, on somebody else’s home, but the papers that might reflect true ownership had not been required.  Much is left to do on behalf of the homeowners, who are not responsible for the housing bubble or its burst.

Senator Adam Kline represents the 37th Legislative District in the State Senate, and chairs the Senate Judiciary Committee. He also writes a semi-regular column for the Rainier Valley Post. Senator Kline’s views are his own and do not represent those of the Rainier Valley Post. Contact him at adam.kline@leg.wa.gov.

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by Senator Adam Kline (Democrat, 37th District)

As the legislative session heads into its final two weeks, it seems we’re poised on the eve of a serious battle over the core missions of state government, and its costs.  Our two houses have unveiled their budget proposals, and both make brutal and unprecedented cuts in the core services: K-12 education, healthcare, social services, higher education, and environmental protection.

As the severity of these cuts becomes clear to those members of the general public who are paying attention, legislators are braced for an equally unprecedented reaction. Last week, 8,000 labor union men and women came to tell us, loud and clear, to close tax loopholes that favor the wealthy so we can write a real budget that aids the rest of us, educates our kids, cares for our seniors and infirm, gets us back to work, and protects our environment.

The dozen most progressive Senators were not surprised—just happy. We need help from outside Olympia because we’re not the majority. Here’s a list of five bills we’ve co-sponsored jointly, to cut just some of the 480 tax-preferences:

  • SB 5944: a referendum to the voters, removing the closure of tax loopholes from the definition of “raising taxes” under Tim Eyman’s Initiative 1053, so we can do it by simple majority.
  • SB 5945: reduces every B&O tax-preference by 25%; also repeals entirely the B&O breaks for investment income of non-financial firms and for mortgage interest earned by banks.  Total value: $338 million in the coming two-year budget cycle.
  • SB 5946: a “state Sarbanes-Oxley,” requiring corporate officers to sign the tax returns and undertake personal liability for under-reporting, whether of the corporation’s sales or use tax, B&O tax, property or public utility tax, or other excise taxes.  Estimated value: $15 million.
  • SB 5947: repeal two agricultural exemptions: artificial insemination of livestock, and the lining and heating of chicken-coops.  Estimated value: $2.5 million.
  • SB 5932: repeals the B&O tax exemption on membership initiation fees for all businesses other than non-profits.  Estimated value: $4.5 million, directed to DSHS for hearing aids and eyeglasses for low-income patients.

As I mentioned in an earlier column, there is zero chance of the Legislature itself enacting any of these latter four tax increases, whether a new tax or the closure of loopholes, so long as we are governed by Initiative 1053. Republicans are more than one-third of each house, and by locking up against any such bill can easily prevent the needed two-thirds majority.

Instead, the battle will be over a referendum to the voters, which the legislature can send out on a simple majority vote. There may be a second referendum, actually closing some of the more egregious loopholes and using the revenues to fund some of those services that need immediate financing or that are the most popular with the voters.

To pass on the ballot, the referendum(s) will need the full and active support of every progressive in the state and will need the funding of labor, gender-equity, environmental, GLBT, and other progressive groups, not to mention the professions involved: teachers, nurses, physicians, students, and so many others.

With so much at stake, even the continued viability of our government and the future of progressive politics here, none of us can sit back and watch.  In a democracy, politics is not a spectator sport.

Senator Adam Kline represents the 37th Legislative District in the State Senate, and chairs the Senate Judiciary Committee. He also writes a semi-regular column for the Rainier Valley Post. Senator Kline’s views are his own and do not represent those of the Rainier Valley Post. Contact him at adam.kline@leg.wa.gov.

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by Senator Adam Kline

Last Tuesday in Olympia, the Senate passed HB 1362, the House version of my Foreclosure Relief Bill (SB 5275). I count this as a major victory for homeowners, and even more importantly for our foreclosure-ridden neighborhoods.

The bill requires that the foreclosing banks pay for independent advisers to assist homeowners in foreclosure proceedings, and also pay for mediation proceedings before an independent third-party.

The House sponsor, Rep. Tina Orwall, and I worked for two years with low-income housing advocates to make this happen. The banks that stonewalled us last year had apparently seen the handwriting on the wall, and knew that a public fight would go badly for them, given the public outrage at their role in the economic meltdown, and the fact that the big perpetrators and their investors avoided prison while literally millions of homeowners are or will soon be renters. As a result, their representatives met many times with Rep. Orwall and me this past fall and continuing through the current legislative session, even as the bill was working its way through both houses of the Legislature.

(Ever meet with a roomful of bankers? Whoopee.)

In Washington last year, 30,000 homes were foreclosed, a number expected to rise to 70,000 in 2011. In filing each new Notice of Default, the banks will pay $250 into a fund from which the housing advisors and mediators will be paid. Each homeowner will be notified that he or she has a right to independent advice from a housing consultant, and the right to seek a settlement in a matter of three months by way of a structured mediation with an independent third-party mediator.

Where the homeowner qualifies for a loan-modification under the federal American Recovery and Reconstruction Act—the Congressional “Stimulus” bill last year—the  The bank must send a representative to the mediation who is authorized to agree to a modification, including a reduction of the principal owed, and must grant the modification.

The House has concurred and sent the bill to Governor Gregoire.

This bill would not have been passed without a major public outcry at the role of bankers in the foreclosure scandal—writing loans to homeowners that they knew could not pay, so they could package the loans to investment firms for securitization into mortgage-backed securities, profiting handsomely while passing the risk of default to the purchaser on Wall Street, and leaving some poor sucker with a home “under water” when the bubble burst and its value plunged lower than the mortgage debt.

The other day, the New York Times covered the sad tale of one such homeowner who got jail time for lying on his loan application to Countrywide Financial, while that firm’s owner, Angelo Mozillo, escapes prosecution for its flagrant violations, and had to pay back only $65 million of his many hundreds of millions in profits. So I call this one a silver lining.

Senator Adam Kline represents the 37th Legislative District in the State Senate, and chairs the Senate Judiciary Committee. He also writes a semi-regular column for the Rainier Valley Post. Contact him at adam.kline@leg.wa.gov.

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by Senator Adam Kline

The newest revenue forecast has just hit us hard: we now anticipate roughly a $5.5 billion total shortfall in revenue in the two year (2011-13) budget cycle, after already cutting state government drastically, and no way to raise taxes—even to close loopholes in existing taxes—without a referendum to the voters.

And Basic Health is on the chopping-block. What to do?

Of the many ideas for balancing the budget, the one that is gathering the most steam from progressive legislators is to create the requisite all-cuts budget in a way we’re prepared to live with, and accompany it with a referendum that closes at least some of the largest and most obvious tax loopholes. The 480 tax preferences that the legislature has enacted over the past 80 years are worth about $50 billion each year.

While some exemptions certainly have their place—groceries, prescription drugs—most have outlived their usefulness or were never effective in the first place. If we are even going to consider ending a program like Basic Health, which subsidizes necessary care for our most vulnerable residents, I think it is only fair that we first consider this option.

As I mentioned here, I am a co-sponsor of SB 5816, which would end four specific tax breaks and dedicate the revenue to funding Basic Health:

  • banks’ B&O on mortgage-interest earnings
  • property tax on privately owned aircraft
  • sales tax exemptions on non-essential plastic surgery
  • sales tax exemptions on coal purchased from out of state

None of these exemptions make economic sense: they neither create jobs nor encourage good works. Three shield banks or wealthy individuals who currently pull less than their weight; one has a negative environmental effect. Closing just these four tax loopholes would raise about $150 million over the next biennium. SB 5816 directs that the revenue from these loophole closures be used to fund the Basic Health Program.

More importantly, we need to change our thinking about the role of exemptions in our tax system. While many of the more recently enacted exemptions have expiration dates, most of the tax exemptions enacted since 1935, when our current tax scheme was created, are still in effect today and will continue in perpetuity unless we re-examine each, and cut where necessary.

We’ll no doubt find that some of these exemptions do provide a good return on our investment, but that the bulk do not. Why, for example, do buyers of gold bullion pay no sales tax? Ditto ginseng root. These and others like them represent, collectively, money that the state is giving away—enough to fill our revenue shortfall several times over.

We should be under no illusion that we can pass SB 5816, or a similar bill, SB 5857, which would phase out most tax exemptions over a period of years. These bills were not meant to pass in Olympia, where a super-majority is needed, but rather to start a public conversation anticipating a referendum, where it is not.

Nor would the corporate interests which stand to lose their subsidies hesitate to spend millions to persuade the voters in that referendum to forgo their own best interests—think of the soda pop and bottled water tax. But if we do not make this effort, what are we? If not now, when?

Washington’s 37th District Democrat, Senator Adam Kline serves as chair of the Judiciary Committee, and member of the Rules Committee and Labor, Commerce & Consumer Protection Committee. He also writes a semi-regular column for the Rainier Valley Post. Contact him at adam.kline@leg.wa.gov.

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by Senator Adam Kline

Well, here it is, Valentine’s Day has come and gone, and I’m still in this soggy town, Olympia, where the voters of the 37th Legislative District have sent me to spend my winters.

I come here every January, cheerful, ready for action. I leave after three and half months, bone-tired, ready to sleep till noon every day for a week. In the meantime, I live by my espresso machine, the one I keep in the office, with the power on.

I don’t need to tell you that we have a budget crisis of unprecedented proportions in Olympia. We legislators have become accustomed over the past year or so to explaining it to our constituents, using adjectives that are themselves unprecedented in our newsletters: the impulse like that of a kid who saw a really really really big bear just around the corner, and needs so bad for you to understand.

Case in point: We’ve ditched our hard-copy newsletters because of budget cuts. Yes, it’s that bad. My newsletter is my favorite way of writing home, of getting a rise out of you.

Amber Campbell, editor of the Rainier Valley Post, has taken pity on me, and given me 500 words every two weeks, by which to let you know how your public servants are dealing with this crisis, and how the issues that are important to you are being shaped. It will be my substitute for my newsletter, and it will work only if you talk back.

This is about issues at the state level: K-12 funding, health care, social services, environmental protection, higher education, and my own close interest in the courts, our system of justice.

Here’s the deal: I tell you straight what happened and what I think about it; you tell me what you think and what you want me to do about it. The kids call it “interactive”; I call it “conversation”.

My first column will be in a week or two.  Like any writer, my default position is to write what I know. But I’d rather write what you choose, because you’re my boss and I want to keep my job.

Here are a few of the big things going on at the moment, at least the ones that I’m involved in well enough to write about, and I want you to pick one:

  • The Basic Health Plan
  • forced furlough days for state employees
  • the fate of community health centers
  • criminal sentencing issues like Three Strikes
  • the chance for another state college tuition increase
  • an overview of the budget process (the big pieces, and how they fall  together)
  • the need to repeal tax-loopholes
  • what we’re doing about climate change

There are more, but you have to identify your own. Please e-mail me at adam.kline@leg.wa.gov, and tell me what’s important to you.

Washington’s 37th District (above left) Democrat, Senator Adam Kline (above right) serves as chair of the Judiciary Committee, and member of the Rules Committee and Labor, Commerce & Consumer Protection Committee.

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