Washington

States' Capital Budgets Have Become Partisan Battlegrounds

BY  | SEPTEMBER 2018

The picture spoke a thousand words: New Jersey Gov. Chris Christie and his family were frolicking and sunning themselves on an otherwise empty beach at Island Beach State Park. The sandy shore was closed to the public because a budget impasse in 2017 had shut down the government. The stalemate threatened thousands of state residents’ July 4th plans that year.

Meanwhile, on the other side of the country, legislators in Washington state were embroiled in a charged political budget battle over rural water rights. The lawmakers couldn’t agree on how to fix the problem of who had the right to dig new wells. The impasse lasted a nasty six months, but few people outside the state even heard about the freeze on spending it caused. 

That’s because while New Jersey’s budget standoff was immediately felt by all state residents, Washington’s battle merely held up the state’s capital budget. While capital budgets are incredibly important for job growth and a state’s economy, in most places holding one hostage doesn’t cause a government shutdown. Hitting the pause button on spending to build roadways and school buildings doesn’t have the same impact as closing a public beach on a hot summer day. 

 

The Public Startup Charting Bold New Waters

Water utilities are struggling to lower their operation costs and simultaneously meet stricter environmental rules. Blue Drop, the brainchild of DC Water’s former leader, wants to help.
BY  | MARCH 2018
Blue Drop hopes to turn wastewater into a revenue stream. (David Kidd)

Most startups fail. Within the first four years, anywhere from 50 to 90 percent of firms go belly up. Investing in them is risky. It’s easy for things to go wrong.

But Blue Drop LLC isn’t a typical startup. To begin with, there isn’t a hoodie or open-loft office to be found in its modest headquarters in downtown Washington, D.C. And the company’s lone investor, the public utility DC Water, hails from an extremely risk-averse sector.

There’s something else unique about Blue Drop: A healthy portion of its revenue plan relies on selling truckloads of what used to be human poop.

A Sneak Peek at the Seismic Shift in Corporate Tax Breaks

New rules are forcing states and localities to calculate how much revenue they’re losing to business deals -- and whether they pay off. It’s something Washington state has been doing for a decade.
BY  | NOVEMBER 2016

Earlier this year, Washington state lawmakers got a wake-up call. A tax incentive package they’d approved in 2013 for aerospace giant Boeing -- largely regarded as the most expensive incentive deal in history -- was actually on pace to surpass its estimated $8.7 billion cost. According to a Department of Revenue report, the deal, which extends to 2040, had already amounted to half a billion dollars in giveaways in just the first two years alone. In other words, the state was losing out on a whole lot more money than it had planned.

And the kicker? Just months earlier, Boeing had announced plans to cut roughly 4,000 jobs in Washington. The year before, the company had transferred thousands more jobs out of the state.

Some lawmakers were livid, openly contemplating whether the state should consider revoking the tax breaks if the company didn’t add back some jobs. (Boeing, for its part, says it has continued to invest in the state, including $1 billion last year for a plant to build its new 777x aircraft.) But on the whole, response from officials and local media was measured. Most lawmakers said that in the bigger picture, the company was still good for Washington.