There are always a few items we’ve read during the week that deserve more attention but don’t make it into our regular posts. So we bundle them for the Friday roundup.
Here’s this week’s bundle:
Washington Research Council: Toward a More Effective Tax Appeals Process for Washington
The [Washington State Board of Tax Appeals] itself acknowledges that it is currently not meeting its mission “to maintain public confidence in the state tax system.” It argues that this is the result of inadequate funding. If that were the case, simply moving its workload to the judicial branch might not make a difference. But the case backlog is not the main issue here. Washington’s system is time consuming and expensive to access and navigate, decisions do not always have precedential value, and those hearing cases do not always have tax expertise. Altogether, the system is deficient.
Because of these deficiencies, Washing- ton’s current tax appeals process gets low marks on COST’s [Council on State Taxation] scorecard. Other states have tax appeals processes that are fairer, making those states more competitive and attractive to businesses while, at the same time, protecting the rights of their citizenry and providing increased certainty for taxpayers and the government. Changes like those pro- posed in SB 5449 would align Washington’s tax appeals process more fully with the principles espoused by COST and the ABA [American Bar Association]. This would improve Washington’s tax and business climate by making the tax appeals process more balanced, fair, and effective.
The American Interest: California’s Cap-And-Trade Goes Unpaid
California’s fledgling cap-and-trade program continues to struggle to get out of the gate. Last summer we noted that one of the Golden State’s quarterly auctions of carbon credits brought in just 2 percent of the revenues it was expected to generate. Two months later, state officials reported that permit sales were well below projected levels, while that same day the California legislature passed a bill that extended a program that even then was clearly broken. Six months later, and quarterly auctions are continuing to disappoint. The Sacramento Bee reports:
Results for last week’s auction were posted Wednesday morning, revealing that just 16.5 percent of the 74.8 million metric tons of emission allowances were sold at the floor price of $13.57 per ton…February’s auction is being closely watched by market analysts because the last three quarterly auctions in 2016 posted sub-par results.
A 16.5 percent participation rate in a scheme like this is abysmal, and it’s compounded by the fact that what few permits that were sold went for the lowest possible price. Clearly, something is amiss here.
Associated Press: US jobless claims drop to lowest level since 1973
The Labor Department says unemployment claims dropped by 19,000 from 242,000 the previous week to the lowest level since March 1973 when Richard Nixon was president. The four-week average, which is less volatile, fell by 6,250 to 234,250, lowest since April 1973. Overall, 2.07 million Americans are collecting unemployment benefits, down more than 7 percent from a year ago.
THE TAKEAWAY: Unemployment claims are a proxy for layoffs. They have come in below 300,000 a week for two straight years, the longest such streak since 1970. The low level of claims suggests that employers are confident enough in the economy to be holding on to staff.
Seattle Times (Talton column): West Coast ports deliver strong results for 2016
Despite continued sluggish world trade and the bankruptcy of Hanjin Shipping, U.S. West Coast ports saw strong containerized traffic last year, according to the Pacific Merchant Shipping Association (PMSA).
The recent PMSA roundup showed that the Northwest Seaport Alliance, comprised of the seaports of the Port of Seattle and the Port of Tacoma, increased its inbound loaded TEUs by 13.5 percent in December and 6.4 percent for the year. TEUs, or twenty-foot equivalent units, are the industry standard measure for shipping containers.
The Creighton University Mid-America Business Conditions Index, a leading economic indicator for a nine-state region stretching from Arkansas to North Dakota, rose for February, according the latest survey results.
Overall index: The Business Conditions Index, which ranges between 0 and 100, climbed in February to its highest level since April 2014 to a strong 60.5 from January’s 54.7. This is the third straight month that the index has advanced above growth neutral.
“This is the fourth consecutive month the index has increased and points to an improving regional manufacturing economy. I expect this to generate even healthier growth for both manufacturing and nonmanufacturing through the third quarter of this year,” said Ernie Goss, Ph.D., director of Creighton University’s Economic Forecasting Group and the Jack A. MacAllister Chair in Regional Economics in the Heider College of Business.
City Journal (podcast with audio transcript): Portland’s Trouble with Homelessness
Michael Totten: Yes, but they are not getting any benefits from the government. They are getting it from nonprofit social service agencies. But what they do get here from the government that they don’t get in most places in the United States is an extremely lenient law enforcement attitude. And partly that’s because of the Supreme Court. The state’s Supreme Court. The city council, Portland City Council, and even the state of Oregon have tried repeatedly to pass laws regulating homelessness. And the Supreme Court repeatedly throws the laws out and makes it almost impossible for the government to move homeless people along…
Brian Anderson: A significant portion of this homeless population, I imagine, are people suffering from various forms of mental illness.
Michael Totten: Yeah, about 50% have mental health problems, and 75% have substance abuse problems. What 100% of them have in common is they have either a poor or nonexistent social support structure.
Washington Research Council (podcast): Policy Today podcast: Four plans in the Legislature for education funding
The biggest job for the Washington state Legislature this year is public school funding for grades K through 12. Right now there are four major plans before lawmakers, all responding to the state Supreme Court’s McCleary ruling, which found that the state is not fully funding basic education. We discuss all four plans in this episode.