GOP Rep Votes Against Own Bill Because of GOP Amendment Against Raising Taxes

Another one of those circumstances where the moral hazard is outweighed by the impact on everyone else. So long as they do something to make sure it doesn’t happen again, it’s fine. That was the problem with the Wall Street bailout. After the problems were identified, Congress decided to ignore the hell out of them.

I’ve got a better idea: King, Snohomish, Skagit, Whatcom and Pierce become their own state, Pugetopolis.

The rest of the state becomes Hickvilleistan. They get to pay for their own convention centers, roads and all the other shit they sponge off of us, and in return, they get to outlaw gayness and abortion and whatever else upsets them.

Deal?

Pugetopolis?  How about Ferryland since you can bet those other guys will do their best to shove the Washington State ferry system over, as Gregoire tried already.

On second thoughts, since you have raised the issue, make it Fairyland!

Shameful. The one issue on which the Tea Party and Occupy Wall Street unite is a hatred of bailouts, and for excellent reason because it’s the taxpayer who always gets screwed in the end. A massive pox on the house of any politician who supported bailing out the Wenatchee convention center.

Armstrong is as dumb as a shovel.  But god help us, he’s the jackass that voters keep sending back to represent them in making decisions about important issues.

All the other jurisdictions in the state will be held harmless, and the account should make money on the transaction due to the high interest rate. The bridge loan is coming from an account that holds local sales tax dollars. The account typically has several hundred million dollars of float. We are loaning them $42 million. We are getting about 5% on the money, and the payback is guaranteed because we will garnish their sales tax distributions if they don’t make the payments. The treasurer typically gets 1.5% return on this account.

This is not a strategy that will work as a general vehicle, but it works in this one scenario.

I share the concern of Derek Young about “moral hazard.” We intend for the conditions of this temporary loan to be onerous enough that other jurisdictions will not want it, and will find a way to make their payments so we don’t garnish their taxes to pay their debts either.

Bailouts without behavior modification are a bad idea. This bill requires Wenatchee to pay its debts and sends a message to other cities, counties and school districts that they should make sure they have a payment plan that works for them.

This is why cities, counties, and school districts all testified in favor of the bill on Friday. They don’t think they are getting screwed – they think this is protecting them from having credit downgrades through no fault of their own.

Giving the Treasurer the ability to embargo their sales tax share is a smart approach to this. It pays the bondholders (albeit late) but protect’s the state, avoids the moral hazard of bailing out irresponsible districts without recourse, and protects municipal bonds from rating agencies seeking their pound of flesh from the rest of us.

This is good policy, despite its bad politics. I hope local government folks around the state point this out to their constituents. Rep. Hunter and his colleagues deserve credit for a strong reaction to a rapidly devolving debt crisis.

you got to admite the republicans in our state legislator.  first, they get a bunch of seattle legislators (most of ‘em) to go along with a bill putting DBT cost overruns on seattel area residents.  Then, when it’s Wenatchee with a cost overrun, unable to pay, they get a bunch of demorcrats to nicely agree to a bailout.

With principal, primary and dominant benefit to Wenatchee.  Note:  just because it’s necessary for the state as a whole, that’s one thing. The principal benefit is to Wenatchee.

And in return for this largesse, the “niceness party” Democrats surely got the republicans to agree to closing a tax loophole.  No?  Oh well certainly they got at least a $42 million reduction in any future overrun on DBT that seattle will bear.  No?  oh well, at least they got SOMETHING right>?  Oh wait, no,  Democrats are the party that believes in helping people, even republican legislators who vote against the democratic positions on every thing else.

They’re the nicest party in all political history. 

Well that’s an o-spin-ion.

What’s been done here is to create a wink-wink out for local jurisdictions who want to engage in boondoggle projects that no self-respecting private entrepreneur would touch with a 10-foot pole.

Sure, float some bonds at an attractive interest rate without regard as to whether the project makes sense. If it flops, no big deal – we’ll just go to the Legislature and get a bailout by waiving the bloody shirt of lower state-wide bond ratings thus causing everyone to panic and do what taxpayers and voters on both the right – the Tea Party – and the left – Occupy – are outraged and furious over, and that’s a bailout.

Call it whatever you want, but that’s exactly what it is. And it’s not good policy – it’s lousy, it-stinks policy because instead of telling jurisdictions not to do stupid stuff, the Legislature – so far, the state House – tells them it’s OK because we’ll cover your ass when it goes toes up.

So-called “deterrents” in the form “onerous” tax-liability exposure never discourage spendthrifts and profligates in government from concocting dopey schemes to get around the limits. Take a look at the mess in Thurston County with the unuoccupied jail if you want an example.

But it’s the taxpayer who gets hosed in the end – always! You can claim the rate of return is better than what ordinarily would be the case, but the even better scenario is to use those float-funds for more critical state purposes if you’re going to use them at all. How many prison guards, cops, firefighters or teachers could be funded instead of bailing out the Wenatchee convention center?

Or better yet, how much less in taxes would people have to pay? What is it with disrespecting those who earn the money in the first place that the taxes they pay always seem to go to project stupid or bailout baloney?

You can be sophisticated and erudite all you wish, but the bottom line is you’re throwing good money after bad. Projects like the convention center have no business being funded by taxpayers. If they’re so hot, there should be a line of entrepreneurs a mile long waiting to plunk down their investment capital. When that line isn’t there, that should tell everyone all they need to know about the merits of the project.

If the bond market seeks revenge for defaults in the form of higher interest rates, the hides of those who should be politically flayed are the elected dopes who concocted the scheme in the first place, not the poor shnook struggling to put food for his family on the table. Bond holders know the risk of default is there, yet now they get off Scot-free? Outrageous!

No wonder the public holds elected officials at all levels in low esteem and regards them with contempt.

You’re misrepresenting the risk and painting all electeds with the same brush.  The risks are local because the state is protected through the sales tax system.  If you want to lay blame, lay it at the feet of those Rs holding up the rest of the majority.