Reading the Tea Leaves

This could be pretty important, from Forbes Magazine:

If you live in Seattle, it might be time to ask for a cost of living increase. The city has the highest inflation rate in the country.

"Seattle household income is fairly high, and that helps to maintain a high rate of inflation since higher income areas can afford price increases," says Steve Cochrane, an economist with Moody's Economy.com. "Some of it is fuel, but housing prices have also been more stable than anywhere else on the West Coast, which adds to inflation."

Normally, Seattle's 3.7% unemployment rate, well under the national average of 5.5%, would be a good thing. But a growing economy with low unemployment drives up wages and costs. The Emerald City's consumer prices are up 5.8% from this time last year, which ties for the highest inflation rate in the country with Dallas, where high energy costs for home cooling and driving are eating up incomes.

Consider that the COLA for teachers mandated by I-728 is tied to the inflation index in Seattle. Consider further how many districts struggled with COLA costs for their staff that aren't funded by the state, and that was at only 5.1%. Wrap all that up with a $2.7 billion dollar budget deficit bow, and I'd say that there's certainly going to be a movement to suspend the teacher COLA in the legislature this year.

(Hat tip to Slog for having the story first.)

a freeway, a freeway, my COLA for a freeway

Dino Rossi's transportation plan is all over the news today, the candidate pushing for new projects to the tune of $15 billion dollars.

"The bottom line is we need these projects. We have no choice," Rossi said. "We have to do these projects ... or we'll be stepping on our own economic air hose in the future."

Rossi, who is running against Democratic Gov. Christine Gregoire, proposed paying for the work in part by spending 40 percent of the state sales taxes on new and used vehicles for transportation projects — a total of $7.7 billion in 2007 dollars projected over the next 30 years.

He also would eliminate state sales taxes on transportation projects, thus lowering their cost.

That tax revenue currently goes to the state's general fund where it's spent on other programs. Rossi doesn't say how he'd make up that loss in revenue, but he says he would not raise taxes or cut programs supporting education, nursing homes and the developmentally disabled.

The opposition isn't buying the no-education-cuts angle. Debra Carnes, communication director for the Gregoire campaign, notes,

It looks like he’s back to proposing some of the same things he’s done before. Much of the revenue to fund his plan comes from the general fund, more specifically to the tune of $10 billion. That’s real money that looks like yet another attempt at suspending funding for COLAs and class size reduction.

In yesterday’s press conference, Robert Mak of KING 5 asked this question:

Q: Should teachers write off their COLA's?

A: We'll have to look at where we are at that point. I fixed the problem in 2003 and can do it again if necessary.

Apparently, his “fix” in 2003 was to suspend the COLAs. Overall, it’s a bad plan that isn’t good for Washington and may be even worse for educators.

If Carnes is right, is it worth it? Should teachers sacrifice their cost of living adjustment to keep gridlock's foot off the economic air hose?

The Governor Takes a Question

Blog neighbor David Goldstein of Horse's Ass is also a KIRO radio personality; his own show was sadly cancelled recently, but this week he's been tabbed to sit in for Dave Ross. The first hour of the February 27th show has an interview with Governor Gregoire, and she actually takes a question on the 1% COLA for teachers. Interesting stuff.