No Loss for Words

Hans Dunshee’s solution to creating jobs is to put the state into debt for $880 million to create 38,000 “green” jobs that weatherize public buildings. His thinking is that the savings to the public building owners, ie the taxpayers, in reduced energy consumption will justify the cost of the bonds paid over their lifetime by general fund revenue contributions for term of the bonds.

Dunshee must have a rich fantasy life.

From what I can tell, the plan is to hire private sector contractors to do the work; thus creating the 38,000 jobs. Representative Dunshee must have some documentation that supports his plan giving credence to his claims, but I have a few questions.

• Would managing these funds require the creation of additional bureaucracy with a portion of the money?
• Is he proposing to weatherize public schools and other public buildings that are scheduled for replacement, surplus or demolition?
• Would the weatherization investment extend the life of the public building beyond the life of the bonds? What would the term of the bonds be?
• Would the money be made available to public entities on a first come first serve basis?
• Would the money be conditioned on certain companies doing the work?
• If there are more requests for the funds than there are funds available, how do we decide who gets funded and who doesn’t?

The recession has cost thousands of jobs in our state over the past year and a half. People are hurting right now.
• How long would it take for this money to create the first job in the private sector?

In order for this program to be successful, it needs to get people working at sustainable jobs.
• Are these jobs sustainable or are they temporary?
• Will the workers doing these jobs earn wages capable of supporting a family or will they be subsistence level jobs paying $8.55 to $14.00 per hour?
• Will these workers receive benefits? Medical or other?
• Are there companies in existence today that are already doing this work?
• How will this program affect them?
• Will the existing jobs be counted in the 38,000 or are they separate? How did we come up with the 38,000 new job figure?

• How long will this program last?
• Which public entities will be entitled to receive benefits in the program?

With regard to the benefits accrued to the participating building owners
• How did you calculate the energy savings?

An energy audit of a building may make a claim of savings if ten things are changed in that building.
• Does this program start with a company doing energy audits paid with program funds or with their own funds?
• Does the program cover the cost of all the recommended upgrades in the audit or a limited number of them?
• If the program doesn’t pay for all the recommended upgrades, how do we quantify the savings for the work done?
• How do we quantify the claim of savings at the start?
• How do we verify the claim of savings after the program is completed?
• If there is no actual savings, is anyone held accountable?

With regard to the cost of the bonds,
• What is the expected interest rate on the bonds and the term?
• How much of an annual contribution will the state have to make to retire the bonds?
• What will this $880 million actually cost the taxpayers of Washington State?

If we assume that half the money spent will go to materials needed to do the work, then the amount actually spent on labor is half of $880 million or $440 million. But we all know that managers will consume a third of the $440 million. Let’s say managers will get $140 million. That will leave $300 million for the currently unemployed workers, if we can find 38,000 workers with skills to do the work. So the 38,000 workers will divide the $300 million and get about $7900 for their work.

How does that sound to you?

This list of questions is by no means complete. These questions came to me in about ten minutes of contemplation. I can’t help but believe that with a real analyst working on it; a lot more questions will materialize.

When will the government types get the message that government cannot create jobs that improve the economy? Government jobs only add to the problems, not solve the problems.

That is not to say that some government jobs don’t provide a needed function, they do, but they don’t add substance to the economy. Real help for the economy comes with the creation of private sector jobs that manufacture something primarily because they tend to pay family supporting wages. Service sector jobs are only marginally better than government jobs because the wages are typically between minimum wage and $15 per hour, but they do produce contributions to the tax coffers rather than a drain.

If the $880 million was put into a revolving line of credit small businesses could access, then real jobs could be created.

I can name a dozen businesses in my area that are locked in limbo because their lines of credit have been eliminated. These are otherwise thriving businesses being held down because of a lack of working capital.

How do we expect companies to hire new employees or buy new equipment without credit? Business decisions are made with the expectation of profit, not the promise of a tax credit.

Businesses are not looking for a handout; they are just looking for an opportunity to get back to doing what they do best at no cost to the taxpayers.

A line of credit is not a gift of public funds.