Reform Retro!

To understand the answer, we need to briefly look at the history and evolution of the BIAW. Started in 1966, the BIAW was not radicalized until the 1990 passage of the Growth Management Act. This Act, which merely required cities and counties to work together to plan for future growth, was seen as a threat to uncontrolled growth which created enormous profits for the very wealthy leaders of the BIAW (who had made millions by promoting unregulated growth). These individuals turned the Growth Management Act into a Property Rights issue and actually managed to win control of the State legislature from 1994 to 2002.

Sadly, they did not limit their activities to merely gutting environmental regulations, but also went on to gut State revenue sources which in turn meant gutting public school funding.

WASHINGTON STATE TAXES: NATIONAL RANK AS % OF INCOME

This chart confirms that something major happened in late 1990’s which led to a dramatic decline in State revenue and school funding. But it was not “out of control State Spending” because State spending, as a percent of income and in comparison to the national average declined dramatically in the past 10 years.

As late as 1997, State revenue closely followed State income. But by 2000, while State income continued to be among the highest in the nation, State revenue fell to near the bottom.

School Funding increased in the rest of the nation, but plunged here in Washington

School funding in our State declined at nearly the same rate and at nearly the same time as the decline in State revenue. So while other States increased funding for public schools as a percent of State income, our State suffered a dramatic decline from 11^th in the nation to 47^th in the nation in school funding. Thus, the decline in school funding was caused by  something unique to our State. That unique factor was the BIAW.

During the early 1990’s, the BIAW figured out how to scam the State insurance pool to generate millions of dollars in extra revenue. Because it was a 501 Non-profit Corporation, the BIAW itself was limited in its ability to secretly collect and distribute funds to political campaigns (non-profits are required to file public financial statements). So in 1993, the BIAW created a For-profit subsidiary, BIAW-MSC to handle both Retro Refunds and Campaign Contributions (and in order to hide this whole scam from public view).

The BIAW also began creating and subsidizing more than 20 political action committees (PAC’s) in which to funnel BIAW Retro subsidies into in order to control elections. These actions would hide from public view both how the money came in to BIAW and how the money went out. The BIAW referred to this new-found pot of gold (the State Worker’s Comp Insurance Retro Program) as its “campaign war chest.”  [1]

The BIAW then used this revenue for the past 15 years to control local elections throughout the State as well as tipping State wide races in swing districts. The 2007 BIAW annual report states:

“2007 was a year of preparation for the BIAW Political Program. With the mammoth presidential election year of 2008 looming, BIAW began laying a solid foundation to elect a pro-business governor, property rights Supreme Court justices and pro-housing legislators.”

The BIAW then spent about $10 million dollars in attempting to influence the 2008 election. This was called “the largest independent political expenditure in State history.” The size is troubling. But even more troubling is where the BIAW got $10 million. This report will show that nearly all of this $10 million was directly or indirectly taken from State tax payer dollars.

While much has been written about the relationship between Dino Rossi and the BIAW, Dino was merely a symbol for a much bigger problem. The next section shows that the actual cost to State tax payers of the Retro Subsidy Program has exceeded $1.3 billion dollars.