What's so Bad about the BIAW?
“The first step in achieving justice is to make injustice visible.”
– Mahatma Gandhi
I want to begin by noting that this report is not about politics. It is about the danger and injustice of diverting hundreds of millions of dollars in public tax payer money to subvert the political processes in our State.
I want to make it clear that I was a successful small business owner for nearly 10 years.
I agree with the BIAW position that our State’s Gross Receipts B & O tax is harmful to new small businesses. I also built my home in a rural area subjected to the intense regulations of the Critical Areas Ordinance. I agree with the BIAW (and our State Supreme Court) that the Critical Areas Ordinance has an unconstitutional double standard which unfairly punishes rural property owners. I am a supporter of contractors and sub-contractors who make up the BIAW. Many are neighbors and personal friends of mine.
But I am also a parent and a tax payer. The fact that hundreds of millions of dollars of public tax payer funds have been used - and continue to be used - to deprive our public schools of billions of dollars in funding every year is a situation that no parent and no tax payer should tolerate regardless of their political beliefs.
The first step in solving any problem is admitting that it exists. I therefore believe I have a moral duty to release this report to the public and expose this problem so that we can move towards correcting this problem and restoring adequate school funding in our State.
In prior reports, posted on our website (fairschoolfundingcoalition.org), I described how funding for public schools in our State has declined dramatically during the past 12 years… dropping from well above the national average to $2,000 per pupil below the national average. This lack of funding has led to our students being subjected to some of the highest class sizes in America. This drop in school funding was related to a 20% drop in State revenue collections as a percent of income during the past 12 years.
Finally, we linked the drop in State revenue to a dramatic increase in tax exemptions, tax breaks and corporate welfare for major corporations and millionaires.. rising from $20 billion dollars per year in 2000 to $50 billion dollars per year today. These corporate tax breaks (570 in all) are rising at a rate of $3 billion dollars per year in hidden State spending.
The 2009 legislative session continued this alarming trend by cutting more than one billion dollars in public school funding while permitting an increase of more than $3 billion dollars in tax breaks for millionaires and major corporations. Ironically, these cuts in school spending and increases in corporate tax breaks continue to occur even though millionaires and major corporations in our State are taxed at rates far less than the national average. For example, the national average State tax rate for millionaires is 9%, yet in our State millionaires pay State taxes at rates of less than 3%. Nor are these tax breaks needed to make major corporations profitable or to protect jobs. Despite the fact that Microsoft was one of the most profitable companies in the world, they were given tax breaks exceeding a billion dollars. Much of their windfall profit was used to outsource jobs from Redmond to India. Even before the massive Boeing tax break, they were making over $3 billion per year. After Boeing was given an additional $3 billion dollars in tax breaks, they laid off thousands of workers and used $2 billion dollars from their windfall profit to build a competing aircraft assembly plant in South Carolina.
Thus, tax breaks for major corporations have done the exact opposite of what they claim to do. Instead of saving jobs, the tax breaks were used to finance the outsourcing of jobs.
The bottom line is that there has been no corporate accountability for these massive tax breaks. It is simply immoral that our kids must attend some of the lowest funded and most over-crowded schools in America simply so millionaires in our State can buy bigger boats.
It hasn’t always been this way. We used to be 11th in the nation in school funding.
So the question remains as to how support for our public schools could have fallen so low during the past 12 years? Certainly Microsoft and Boeing should share some of the blame for turning our State legislature into what a Boeing lobbyist referred to as a “Cash Cow” and thus depriving our school children of billions of dollars in school funding.
But the group most responsible for corrupting our State legislature during the past 12 years – and thus depriving our public schools of the funding they need -- has been the Building Industry Association of Washington (BIAW).
In a December 12, 2008 letter to Governor Gregoire, the BIAW-funded Washington Policy Center made budget cut recommendations that reveal BIAW's true agenda. The single largest item they wanted cut was public schools. They advocated a billion dollar cut in public school funding. Sadly, the Governor and our State legislature followed through in cutting a billion dollars from public schools for which they were given a “letter of congratulations” by the BIAW.
The BIAW's agenda consists of these objectives:
1. Protect its $10 million dollar annual political slush fund created by diverting millions of tax payer dollars from a State insurance pool to control elections in Washington State.
2. Get rid of progressive laws, like the Growth Management Act and the Clean Water Act that protect workers and consumers
3. Prevent the enactment of any regulations that would force the home construction industry to be more accountable (like the Homeowner's Warranty bill)
4. Weaken environmental protection laws (for example, in 2006, the BIAW sued the government to prevent orcas from being listed as an endangered species)
5. Cut funding for public schools (advocating for a billion dollar school funding cut in 2009).
6. Cut health care benefits for children and poor families.
In other words, the BIAW is opposed to everything that progressive Democrats stand for.
For too long, the BIAW has used "retrospective rating" subsidy checks to wage war on the social and economic well being of the State of Washington. This has to end. The subsidies are intended to encourage builders to stay safe on the job by giving them back part of their premiums. Instead, Retro groups get back far more than they put in.
The BIAW, as the operator of one of the state's biggest workers' compensation pool, should be passing all of the savings back to its members. But even more important, refunds should never exceed actual savings. Instead, “rebate” checks have been more than 40 times greater than actual savings, allowing the BIAW to divert millions of tax payer dollars to use for attack politics.
What exactly is the BIAW?
To answer this question, it is important to understand that the Building Industry Association of Washington (BIAW) is not what it appears to be. It started out as a trade association of Builders. But it has not been that in a long time- going back at least 20 years.
In this report, we refer to it as an “insurance agency” because this is how the Department of Labor and Industries describes it. But BIAW is not really an insurance agency either because the money it uses comes mainly from the Washington State Department of Labor and Industries (L & I) which in turn is a publicly run health insurance company which handles all the normal insurance functions of collecting premiums and paying claims. So BIAW gets money from an insurance agency instead of paying money to the agency, but does not process claims.
Some have described the BIAW as a sub-contractor who runs a program for L & I. But they are not this either because as we will show, the BIAW does not improve safety of workers or save the State any money or perform any other beneficial purpose. Instead, all they really do is scam tax payers out of hundreds of millions of dollars and use this money to buy elections.
So one might think of them as a Political Action Committee (PAC). Except that PAC’s do not use public tax payer money to fund their political campaigns. Thus, the most accurate way to describe the BIAW would be like a leech – serving no public purpose- but instead slowly sucking the blood out of our Democracy.
