Author: Jeff Rhodes

GOP Official Says Gregoire, Pflug Cut ‘Sleazy, Backroom Deal’

Republican officials in Washington’s 5th Legislative District were completely blindsided by the news on Tuesday that Maple Valley incumbent Sen. Cheryl Pflug was abruptly ending her re-election bid to accept an appointed position with the state, and they believe Gov. Christine Gregoire’s fingerprints are all over the decision.

“This is so transparent,” said 5th District GOP Chair Bob Brunjes. “It’s not a question of what I think, it’s what I know happened. And this is nothing short of a sleazy, backroom deal to take away a Senate seat the Democrats otherwise could never have won.”

Pflug, who announced a day earlier that she had accepted an invitation from Democratic Gov. Christine Gregoire to serve on the Washington Growth Management Hearings Board, apparently did not inform party officials of her plans in advance and, in fact, had filed paperwork last week with the Secretary of State’s Office to run for a third term from the 5th District.

“She didn’t tell anyone in our office or anyone at the state level,” Brunjes said. “Nor did she tell anyone in elected office, including (5th District Rep.) Jay Rodne, and that’s the real travesty here.”

Brunjes said Rodne has long had an interest in running for the Senate and would have jumped at the chance if he’d known Pflug was vacating her seat.

“A lot of people in Olympia have been encouraging him to run against her,” Brunjes said. “But he wouldn’t do it. He said that was Cheryl’s seat and he wouldn’t run until she decided to give it up. That’s what he gets for being an honorable person.”

“Cheryl is well-respected by both sides of the aisle as an effective problem solver and has served her constituents well,” Gregoire said in announcing Pflug’s appointment. “Her legislative experience and commitment to serve will be a great asset to the work of the board and I welcome her to this new role.”

“It’s an honor and privilege to receive this appointment by Gov. Gregoire,” Pflug responded. “I’m excited for the opportunity to continue serving the citizens of our great state in another capacity and look forward to the challenges ahead.”

Meanwhile, Pflug’s abrupt withdrawal from the race four days after the week-long filing period for state offices has already closed leaves Snoqualmie mortgage banker Bob Toft, a political newcomer, as the only Republican in the race against Democrat Mark Mullet, a former Issaquah City Council member.

“The pity is that we had things all set up in the event Cheryl had decided not to run,” Brunjes said. “Rodne would have given up his seat in the House to run for the Senate, and I had a local mayor ready to run for Rodne’s seat.

“It isn’t that we can’t hold that seat now,” he said. “But it’s going to be a whole lot harder than it would have been if we hadn’t been deliberately deceived about (Pflug’s) intentions.”

Pflug’s new post comes with a six-year term and a $92,500 salary. She will be replacing Margaret Pageler, of Seattle, in the board’s Position 6. The latter’s term expires on June 30.

A Registered Nurse by profession who just earned her law degree from Seattle University this spring, Pflug’s only job currently is state senator, which has a salary of around $40,000 per year.

“Ordinarily you’d want someone in that position with some experience in land-use law,” Brunjes said. “Cheryl has none whatsoever. She’s a nurse. She only got her law degree a few weeks ago and she isn’t even licensed to practice yet. But she’s getting a new job that will more than double her income.

“It doesn’t take too much imagination to connect the dots,” he said.

Pflug was also one of only a handful of Republican lawmakers in either House who broke party ranks during this year’s legislative session to vote in favor of legalizing same-sex marriage – one of Gregoire’s pet issues.

“I don’t necessarily think this job is a payoff for that vote,” Brunjes said. “This is a pretty moderate district on social issues to begin with, and I don’t think it would have hurt her. She was still totally electable even after that vote.”

Democrats currently enjoy a three-seat advantage in the Senate – a margin so slim Republicans were able to persuade three Democrats to vote with them on a reform budget this year, temporarily giving the minority party a working majority on fiscal matters.

And knowing the GOP base would be energized this fall by candidates for president and governor currently leading in public opinion polls, in addition to a ballot referendum to repeal the same-sex marriage law, Republican leaders were openly speculating about taking control of that body in November.

“That mountain’s gonna be a lot harder to climb now that we have to defend a seat we didn’t expect we’d need to defend,” Brunjes said. “The Democrats are known for playing the whole chess board, but we’re not just going to roll over for them. We’ll still have something to say about who represents the 5th District.”


[Reprinted with permission from The Olympia Watch]

Gregoire’s Pay After Retirement Will Be Greater Due to Pensions

Whatever else stepping down as governor will cost Christine Gregoire, she doesn’t figure to suffer financially.

In fact, her state pension currently projects to be $3,000 a year more than she’s earning as Washington’s chief executive.

According to documents obtained in a public disclosure request by the Freedom Foundation, Gregoire’s pension was calculated last July by the Washington State Department of Retirement System at $169,248 annually.

He salary as governor is $166,899 — the 10th highest of any U.S. governor, while Washington’s population ranks it No. 13 in the nation.

By the time of her retirement next January at age 64, Gregoire will have worked a total of 40 years in state government, including 20 in non-elective offices and 20 as an elected official with two terms as attorney general and governor, respectively.

Under the Public Employees’ Retirement System (PERS) Plan 1, Gregoire will receive a monthly check totaling $14,104, which includes $8,377 for her elected service and $5,724 for her non-elected positions.

PERS Plan 1, in which Gregoire participates, offers a single-life benefit, meaning she will receive the highest possible monthly payment and her beneficiary will not continue to collect her pension after her death.

She also opted for a plan that does not include an annual cost of living adjustment in order to maximize her payments immediately.

Gregoire’s husband Mike, who retired in 2003 after 30 years as a healthcare investigator in the Department of Social and Health Services, currently earns a pension of $2,699.23 per month — a total of $32,390.76 annually.


[Reprinted from The Olympia Report; photo credit: npimultimedia]

Overheard in Olympia: ‘So Tell Me Again Why We’re Doing This.’

It isn’t often during government hearings that you hear someone actually ask the question, “Why are we doing this, anyway?”

It’s even rarer when the person testifying concedes he isn’t altogether sure.

A Tuesday morning meeting of the Select Committee on Pension Policy, however, did yield a surprisingly candid exchange between committee member Glen Olson, representing the Washington State Association of Cities and Towns, and policy analyst Aaron Guttierez, who was explaining an otherwise bland study the committee staff was conducting on the feasibility of combining LEOFF 1 and LEOFF 2, a pair of pension plans set up for the benefit law enforcement officers and firefighters.

Olson: “When you say that you’re going to evaluate a merger and whether or not it’s going to accomplish ‘their’ goals, is it naive to ask who ‘they’ are and what their goals are? Or maybe more specifically, what’s the problem statement?

Gutierrez: “In terms of what’s the problem statement, we haven’t really developed a problem statement, so to speak…”

There ensued an understandably confusing attempt by Gutierrez to explain how the staff is conducting a study whose goals and purposes have never been defined. Then Olson jumps back in.

Olson: “You don’t have to invent something that isn’t there. No one handed you a nice, tidy problem statement that said, ‘Because LEOFF Plan 2 is in such a situation, we need LEOFF Plan 1 to be merged,’ or something clean like that.”

Gutierrez: “Correct. We’ve been going straight from the budget proviso, which basically said, ‘Study the issue of merging the two plans.’ “

At this point, the discussion meanders away from the question of a problem statement, but a few minutes later it’s revisited by Rep. Bill Hinkle (R-Cle Elum).

Hinkle: “Next year will be my 10th in the Legislature, and in that time I can’t remember any legislation that’s instituted a study that didn’t have a real goal in mind. I’ve been trying to hear that, (and) I don’t really understand what we’re trying to do. For those watching on TVW—all 14 of you—I’d like to ask the question, ‘What is this legislation about? How much are we going to spend to study something when we really don’t have a goal in mind?’ I don’t get that.”

By this time, Gutierrez has been joined at the microphone by Washington State Actuary Matt Smith.

Smith: “We’re in a bit of an awkward position to have to respond to a fairly vague study mandate, so we’re applying our judgment to what we think would be most useful…”

Hinkle: “So no one has actually told you, ‘This is why we’re doing this? This is what we’re trying to accomplish?” I can’t imagine we’d take this up and not have that said.”

Smith: “It’s a study mandate, so we have to rely on the language that was provided to us and the input we’ve received to help frame our response … That’s really the best we can do. But I would agree, it really does not have a clear problem statement. You won’t find that in the study mandate.”


Got all that? Here it is in a nut shell: During the 2011 session, a bill was proposed that would have merged the two pension systems. It didn’t pass, but rather than kill it outright—thus hurting the feelings of the bill’s sponsor—lawmakers agreed on a compromise to study the idea for future consideration.

So here we are, six months later, with an frustrated policy wonk being grilled by a room full of decision-makers trying to justify a study whose purpose no one was never told—probably because the legislation is almost certainly going nowhere anyway.

Your tax dollars at work.


[Reprinted from the Freedom Foundation blog; photo credit: HidingInABunker]

State Actuary Defends Pension Fund Accounting

Is Washington’s pension system well-funded and secure, or does the accounting system it uses simply overstate strengths while minimizing weaknesses?

According to the state’s actuary, the truth is a combination of both.

Matt Smith, appearing on Thursday night in a town hall meeting at the University of Washington, told attendees the state uses a variety of methods to look at its pension system depending on it wants to see.

“Both sides are right,” he said. “There are different measurements for different purposes.”

Smith was responding to a report prepared earlier this month by American Enterprise Institute scholar Andrew Biggs for the Olympia-based Freedom Foundation, which sponsored the gathering on Thursday night.

In his analysis, Biggs said the state is only funded at 52 percent — a level that would earn it a shaky status if Washington were a private business.

“Judged by private-pension standards, Washington state’s public pensions aren’t fully funded,” he wrote. “For context, the U.S. Department of Labor rules that any private pension under 65 percent funding is considered ‘critical’ and must immediately move to fix its problems. And the burden of truly fully funding pensions on Washington’s budget won’t be the 3 to 4 percent the state is currently putting aside, but several multiples of that.”

The main problem, Biggs said, is that the state reports the value of its pension system based on the 8 percent return it hopes it can earn via riskier investments in the stock market rather than the 4 percent it is guaranteed to earn with safer instruments like Treasury bills.

“Just because you say you’re going to get 8 percent doesn’t mean you will,” Biggs told the town hall crowd. “On paper, risk solves the problem. In real life, it doesn’t always work that way.”

Smith, however, insisted the state wasn’t being overly optimistic in its accounting.

“Over the past 20 years,” he said, “the state has averaged a return of 8.2 percent on its investments. If you’re looking for an accurate number, does it make more sense to base your projections on history or worst-case scenarios?”

Smith said the state also calculated its pension funding according to Biggs’ more conservative standards, and that both sets of numbers were on the Actuary Office‘s website for everyone to see.

“We’re as transparent as any state in the country,” he said. “We’re not trying to hide anything. Compared with other states, Washington is much more open and much better funded.”

Biggs agreed Washington wasn’t in as precarious a position as other states like California, whose unfunded pension liability has been estimated at $500 billion.

But that doesn’t mean the state doesn’t have a problem.

“Being one of the better-funded states these days is being like the prettiest hog in the slaughterhouse,” Biggs said.

Freedom Foundation founder Bob Williams said the issue isn’t a partisan one, noting that he’s currently working with governors of both parties around the country to heighten awareness about the ticking pension time bomb.

“I can tell you what someone who is definitely not a conservative thinks about this problem,” he said. “Bill Gates Jr. has been quoted as predicting state and local governments will have to lay off 100,000 people over the next few years, and he attributes that to fraudulent accounting methods.”

It’s not uncommon already, he said, for Washington cities to be paying for three policemen — one active and two retired.

“A day of reckoning is coming,” Williams said. “It’s a real problem.”


[Reprinted with permission from Olympia Watch; photo credit: Indenture]

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