1. Behold the power of a press conference: After state Sen. Sharon Nelson (D-34, W. Seattle, Vashon) kicked up a fuss over legislation sponsored by conservative Democrat Steve Hobbs (D-44, Lake Stevens) that would create a new type of high-interest consumer loan, two of the bill's co-sponsors, Sen. David Frockt (D-46, N. Seattle) and Maralyn Chase (D-32, Shoreline) took their names off the bill.
The legislation, which is ostensibly aimed at creating an alternative to high-interest (up to 400 percent) payday loans, creates a new category of consumer loan of up to $2,000 (compared to payday loans, which top out at $700) with a six-month minimum term, and annual interest of up to 36 percent. Its original sponsors included a motley crew of conservative Republicans (Don Benton, R-17, Vancouver; Pam Roach, R-31, Auburn), conservative-to-moderate Democrats (Rodney Tom, D-48, Medina; Hobbs), and lefty Democrats (Karen Keiser, D-33, Des Moines; and Nick Harper, D-38, Everett).
However, after Nelson, who passed landmark legislation as a freshman Rep. in 2010 to regulate payday loans, pointed out provisions in the bill, including substantial monthly fees, penalties for late payment, and terms that could allow a lender to repossess a borrower's car if he or she went into default, Frockt and Chase (lefty-lefty Democrats) withdrew their support.
"As I looked at it further and got some more information, I realized that it probably wasn’t the right approach," Frockt says. "I know when I've made a mistake, and I made a mistake in this case."
After Sen. Nelson pointed out provisions in the bill, including substantial monthly fees, penalties for late payment, and terms that could allow a lender to repossess a borrower's car, a couple of key Democratic co-sponsor withdrew their support. 2. Speaking of Sen. Frockt: He's one of a group of Democratic state senators—along with Sen. Jeanne Kohl-Welles (D-36, Queen Anne, Ballard) and Sen. Kevin Ranker (D-40, Orcas Island)—who rolled out a series of higher-education funding bills yesterday that would save the Guaranteed Education Tuition fund (GET), a program that allows families in Washington to pre-pay for college tuition vouchers (at the current cost of tuition) that can be redeemed years later even after tuition has increased. The state GET fund, invested in the stock market with new parents investing all the time, covers the difference.
Sen. Tom and his Republican "Majority Coalition Caucus" have said they want to get rid of GET because the state actuary recommends that the account should always be able to cover 110 percent of its costs—and where things stand currently, over time, if everyone cashed out when their kids go to college, the state would end up paying $1.7 billion. (In other words, there's only a 79 percent chance of the state covering the costs right now. Not so good.)
Important Democratic footnote on that, though: The actuary also says there's only an 0.6 percent chance of that happening because the sour prediction is based on a snapshot in time; the $1.7 billion problem is based on the way the fund looks today after getting rocked by the recession and rising tuition costs due to decreased state funding (down to a 30/70 split, with higher ed institutions like the UW picking up the slack through unprecedented—15 to 20 percent—annual tuition increases).
The Democratic plan, Frockt tells Fizz, is to increase state support at the front end, to a 50/50 split by 2020 (about $1.3 billion per biennium vs. $972 million per biennium now) which will bring tuition increases down and stabilize the GET fund at the back end.
Frockt said in a press statement:
If we were to move to a 40/60 split, the risk of needing general fund money to cover GET liabilities would go down to just 0.2 percent. But we think we can do even better than that. This plan puts us on track to fund 50 percent of higher education from state support and 50 percent from tuition by 2020. That’d save GET, save our students from crushing debt loads, and open a crucial pathway to opportunity to so many students who are priced out of higher education now.
And on the phone, he added: "That puts the risk down to zero percent."
3. Finally, if you missed yesterday afternoon's installment of "Isn't It Weird That"—the first item about the Republicans' electoral college bill and the Democrats' voting rights bill, explaining why both parties are total hypocrites, is a must read.