Category Archives: Tax Exemptions

Tax Exemption Transparency and Accountabiliy Act – SB 5513

Posted on January 25th, 2018 | Comments Off on Tax Exemption Transparency and Accountabiliy Act – SB 5513

Testimony in support of SB 5513 – the Tax Exemption Transparency and Accountability Act

Washington State Senate Ways and Means Committee, Jan. 18, 2018

Steve Zemke – Tax Sanity

 Thank you for this opportunity to testify on this legislation.

This is the fifth year this bill has been before you and each year it picks up additional support.  Senate SB 5513 has 14 sponsors and its companion bill in the House, HB 1500, has 33 sponsors. This is almost one third of our state Legislators.  

 Legislation to create a Tax Expenditure Budget has been increasingly supported by numerous groups in our state, including the Washington State Budget and Policy Center, All in for Washington, the Washington State Labor Council, the League of Women Voters of Washington, Washington’s Paramount Duty, the Washington State Democratic Party, the Washington Education Association, SEIU 775, Northwest Progressive Institute, Washington Federation of State Employees, Washington State Council of Firefighters, Faith Action Network, Puget Sound Advocates for Retirement Action,  and others

 Why are these groups supporting this legislation? Because they believe that a system of tax expenditures that gives away more in revenue from the tax base than it collects is a broken system.  They believe that tax exemptions need transparency and accountability and fairness. That does not exist now.

 Tax Exemptions, preferences, deductions, credits, and deferrals are off budget expenditures. They lack the transparency and accountably that exists for other expenditures the state makes as part of the biennial budget process. According to the Department of Revenue’s projection in their 2016 Tax Exemption Report for the 2015 to 2017 biennium they projected that while the state would collect some $7.4 billion in B&O taxes, they would exempt from the same tax base some $11.4 billion. This gap has widened since the last biennium.

Including the rest of the tax exemptions in their report, the Department of Revenue projected that off budget tax expenditures would total almost $40 billion while only collecting revenue totaling some $32.6 billion.

 Of the 694 tax exemptions in that report about 450 are discretionary.  The Department of Revenue projected that in the 2017 to 2019 Biennium that of the $54 billion in projected tax expenditures, some $30 billion would fall into “potential revenue gains”. 

 This legislation does not mandate wholesale repeal of tax expenditures.  It asks for accountability and transparency and biennial review and gives the legislature the ability to act to end exemptions if they do not meet the priorities of government the same as expenditures in the regular biennial operating appropriations budget must.

 Concern about the current system includes a quickly dated Tax Exemption report by the Department of Revenue that is only updated once every 4 years.  Most other states in the country update their report every 2 years or less. California updates their Tax Expenditure report every year.

Companies like Microsoft, Starbucks, Expedia, Adobe and Boeing all must report to their stockholders every year and issue quarterly profit and loss statements.  Their financial statements are scrutinized by their stockholders. It does not make sense that Washington State only updates its Tax Exemption Report every 4 years. It will next be updated in 2020. It should at a minimum be updated two years just as the state biennial budget is..

Only 73 of the 694 listed exemptions in the 2016 Tax Exemption Report have sunset provisions. This means 89% of the tax expenditures have no sunset provision and never require the Washington State legislature to ever vote on them again. Meanwhile all expenditures in the regular operating appropriations budget are scrutinized and voted on every 2 years with adjustment made in the 2nd year of the biennium.

 Also in the Tax exemption report, 54 exemptions are listed as “unable to disclose” the amount of revenue involved.  Businesses and other entities are benefiting from state tax law in getting exemptions and lower or no taxes. The public has a right to know the value of these exemptions. 

The public has a right to know that these exemptions are creating jobs or providing valuable services to Washington State citizens just as they expect expenditures in the regular budget appropriations bill to produce.

  We require that accountability in the regular budget appropriations process – we don’t say we’re spending state revenue but the public doesn’t have the right to know because the recipient doesn’t want us to know what they are getting.

 With the current lack of accountability and transparency and sound fiscal review and evaluation as to whether current tax expenditures meet the state priorities of government and have clear measurable objectives as to their effectiveness in meeting state needs, taxpayers and citizens in this state increasingly believe state government and the legislature are not doing their job.

.Please step up and vote to fix this broken tax expenditure system that severely lacks needed transparency, accountability and sound fiscal management of our total state budget.

 Steve Zemke

 Director Tax Sanity

steve@taxsanity.org

www.taxsanity.org

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Posted in Economy, Tax Exemptions, Tax Expenditure Budget

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Help Fund Public Education Now by Ending Tax Exemptions as Off Budget Spending

Posted on April 17th, 2017 | Comments Off on Help Fund Public Education Now by Ending Tax Exemptions as Off Budget Spending

END TAX EXEMPTIONS AS OFF-BUDGET SPENDING
BY ADDING THEM AS TAX EXPENDITURES TO THE STATE BUDGET!

Washington State currently gives away more revenue from its tax base than it collects. This is a broken tax system built up over many years.  

The Washington State Department of Revenue in their 2016 Tax Expenditure Report  projected for the 2015 -2017 biennium that off budget tax expenditures would total almost $40 billion while only collecting revenue totaling some $32.6 billion.

We don’t generally think of them as such but these tax exemptions, preferences, deductions, credits and deferrals are off budget expenditures. They lack the accountability and transparency that exists for other expenditures the state makes as part of the biennial budget process.

The Governor must as part of the biennial budget process evaluate all expenditures according to a Priorities of Government protocol. Unfortunately tax exemptions do not have the same criteria or scrutiny. The result is that while the state legislature is seemingly unable to comply with  the Washington State Supreme Court’s McCleary decision to fulfill Washington’s “paramount duty” under the Washington State Constitution to fund public education, it excludes from tax collection billions of dollars.

Taxpayers deserve better accountability and transparency of the state’s  tax and revenue system. They deserve to know who is receiving these tax exemptions, how much money is involved and for what reason they are given. They deserve to have a system that prioritizes state needs, not exemptions for special interests and the wealthy that benefit from a system where 90% of the exemptions have no sunset provision while the state budget has a biennial review and vote as to funding.

According to the Washington State Department of Revenue’s  2016 Tax Exemption Study, while the State expects to collect some $7.4 billion in B&O tax revenue in the current 2015 -2017 biennium, it exempts from collection some $11.4 billion. When sales and use taxes were included with the analysis, the results are similar – the state expects to collect some $18.9 billion in revenue from sales and use tax, while exempting some $16.9 billion in revenue

Washington State has created some 694 tax exemptions over the years. Over 450 of these are discretionary tax exemptions, not required by Federal or State constitutional law. These discretionary tax exemptions will account for over $28.3 billion in B &O and sales/use tax revenue not collected in the current biennium..

Including property tax exemptions the 2016 Department of Revenue Report projects that in total, Washington State will see as off budget tax expenditures almost $40 billion in tax exemptions this biennium while only collecting revenues of $32.6 billion for the Legislature to fund its biennial budget.

HB 1500 introduced by Rep.Pollet and 32 other sponsors would require the governor to propose and the state legislature to adopt a Tax Expenditure Budget every 2 years as part of the biennial omnibus operating appropriations act. A companion bill, SB 5513 has been introduced in the WA State Senate by Senator David Frockt with 12 other sponsors.

HB 1500 / SB 5513 would give the Washington State Legislature an opportunity to periodically evaluate the need and effectiveness of the state’s tax exemptions in meeting current state needs. They would do this at the same time they are making budget decisions about prioritizing other state expenditures for public services as part of the biennial budget appropriations process.

What would HB 1500 /SB 5513 – the Tax Exemption Transparency and Accountability Act do?

 This measure would require new and existing discretionary tax exemptions to be authorized every two years in a tax expenditure budget. It will add much needed transparency and accountability to the hundreds of exemptions and preferences, along with their cost and how each decision to spend money on an exemption or preference is a choice to expend funds for this purpose with particular beneficiaries.

The tax expenditure budget would detail the fiscal impact, purpose, and effectiveness in meeting the purpose of each tax exemption.

 Tax exemption not included in the tax expenditure budget would expire at the end of the calendar year in which the budget is adopted.

Contact your Legislators at www.leg.wa.org and urge them to support the Tax Exemption Transparency and Accountability Act.

 Action item – Urging your Legislators to pass HB 1500 and companion bill SB 5513 is easy. You can leave them a message by going to www.leg.wa.gov, entering 1500 or 5513 for the bill number after clicking the bill information link and then clicking on “comment on this bill.” Or call the Legislative hotline at 1-800-562-6000 and leave a message to for your legislators and the Governor to support HB 1500 and SB 5513 to prioritize state spending, accountability and transparency by creating a Tax Expenditure Budget as part of the biennial budget appropriations process.

Be sure to thank your legislators if they are a sponsor of this legislation. Their support is appreciated. Legislators sponsoring HB 1500 – Pollet, Farrell, Appleton, Tarleton, Ryu, Wylie, Santos, Marci, Doglio, Jinkins, Orwall, Tharinger, Stonier, Kagi, Fitzgibbon, Kloba, Stanford, Berquist, McBride, Ortiz-Self, Goodman, Dolan, Cody, Pettigrew, Riccelli, Sells, Hudgins, Kirby, Lovick, Frame, Peterson, Ormsby, Pellicciotti

 Legislators sponsoring SB 5513 – Frockt, Hasegawa, Miloscia, Rolfes, Saldana, Keiser, Wellman, Conway, Chase, Billig, Kuderer, Hunt, McCoy

For more information:Contact Steve Zemke – Director Tax Sanity, Steve@taxsanity.org,  www.taxsanity.org,  

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End Tax Exemptions as Off Budget Spending by Adding Them to the State Budget

Posted on January 26th, 2017 | Comments Off on End Tax Exemptions as Off Budget Spending by Adding Them to the State Budget

 End Tax Exemptions as Off-Budget Spending

by Adding Them as Tax Expenditures to the State Budget!

Washington State HB 1500 -the Tax Exemption Transparency and Accountability Act of 2017 will have a hearing in the State House Finance Committee on Tues. Jan 31st.  Please attend the hearing or comment on the bill on line at leg.wa.gov.

 Why is HB 1500 needed?

We don’t generally think of them as such but tax exemptions, preferences, deductions, credits and deferrals are off budget expenditures. They lack the accountability and transparency that exists for other expenditures the state makes as part of the biennial budget process.

Taxpayers deserve to know who is receiving these tax exemptions, how much money is involved and for what reason they are given.

According to the Washington State Department of Revenue’s  2016 Tax Exemption Study, while the State expects to collect some $7.4 billion in B&O tax revenue in the current 2015 -2017 biennium, it exempts from collection some $11.4 billion. When sales and use taxes were included with the analysis, the results are similar – the state expects to collect some $18.9 billion in revenue from sales and use tax, while exempting some $16.9 billion in revenue

Washington State has created some 694 tax exemptions over the years. Over 450 of these are discretionary tax exemptions, not required by Federal or State constitutional law. These discretionary tax exemptions will account for over $28.3 billion in B &O and sales/use tax revenue not collected in the current biennium..

Including property tax exemptions the 2016 Department of Revenue Report projects that in total, Washington State will see as off budget tax expenditures almost $40 billion in tax exemptions this biennium while only collecting revenues of $32.6 billion for the Legislature to fund its biennial budget according to the Department of Revenue.

HB 1500 introduced by Rep.Pollet and 32 other sponsors would require the governor to propose and the state legislature to adopt a tax expenditure budget every 2 years as part of the biennial omnibus operating appropriations act. A companion bill, SB 5513 has been introduced in the WA State Senate by Senator David Frockt with 12 other sponsors.

HB 1500 / SB 5513 would give the Washington State Legislature an opportunity to periodically evaluate the need and effectiveness of the state’s tax exemptions in meeting current state needs. They would do this at the same time they are making budget decisions about prioritizing other state expenditures for public services as part of the biennial budget appropriations process.

What would HB 1500 /SB 5513 – the Tax Exemption Transparency and Accountability Act do?

 This measure would require new and existing discretionary tax exemptions to be authorized every two years in a tax expenditure budget. It will add much needed transparency and accountability to the hundreds of exemptions and preferences, along with their cost and how each decision to spend money on an exemption or preference is a choice to expend funds for this purpose with particular beneficiaries.

The tax expenditure budget would detail the fiscal impact, purpose, and effectiveness in meeting the purpose of each tax exemption.

 Tax exemption not included in the tax expenditure budget would expire at the end of the calendar year in which the budget is adopted.

Contact your Legislators at www.leg.wa.org and urge them to support the Tax Exemption Transparency and Accountability Act.

 Action item – Urging your Legislators to pass HB 1500 and companion bill SB 5513 is easy. You can leave them a message by going to leg.wa.gov, entering 1500 or 5513 for the bill number after clicking the bill information link and then clicking on “comment on this bill.” Or call the Legislative hotline at 1-800-562-6000 and leave a message to for your legislators and the Governor to support HB 1500 and SB 5513 to create a tax expenditure budget as part of the biennial budget appropriations process. And be sure to thank your legislators if they are a sponsor of this legislation. Their support is appreciated.

 Legislators sponsoring HB 1500 – Pollet, Farrell, Appleton, Tarleton, Ryu, Wylie, Santos, Marci, Doglio, Jinkins, Orwall, Tharinger, Stonier, Kagi, Fitzgibbon, Kloba, Stanford, Berquist, McBride, Ortiz-Self, Goodman, Dolan, Cody, Pettigrew, Riccelli, Sells, Hudgins, Kirby, Lovick, Frame, Peterson, Ormsby, Pellicciotti

 Legislators sponsoring SB 5513 – Frockt, Hasegawa, Miloscia, Rolfes, Saldana, Keiser, Wellman, Conway, Chase, Billig, Kuderer, Hunt, McCoy

  For more information:

Contact Steve Zemke – Director Tax Sanity, steve@taxsanity.org , www.taxsanity.org,  

cross posted at TaxSanity.org

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Should 12% of our State Legislator’s Have Veto Power over the State Budget?

Posted on July 3rd, 2015 | Comments Off on Should 12% of our State Legislator’s Have Veto Power over the State Budget?

On July 2, 2015 Libertarian anti-tax advocate Tim Eyman snuck quietly into the Washington Secretary of State’s Election Office and filed petitions for Initiative 1366 that he claimed had some 334,000 signatures collected by paid signature gatherers. If validated I-1366 will be on the Nov 2015 ballot.

Eyman’s Initiative 1366 is a Senator Ted Cruz Style Extortion Measure to prevent any new revenue being adopted by the Washington State Legislature. It would cut $1 billion a year from the Washington State Budget unless Legislator’s do Eyman’s bidding.

 Eyman’s I-1366 wants Legislators to put a constitutional amendment on the ballot to allow a super minority of only 12 % of our elected State Legislators ( 17 Senators out of 147 Legislators) to have the power to prevent any new revenue being raised for any reason. It would also allow those same 12% of elected State Legislators to prevent any tax reform, even if revenue neutral if it raised revenue from a new source, like a capital gains tax, a pollution tax on carbon or closed any tax loopholes.

Signature gatherers were paid with funds collected by Eyman from a few wealthy taxpayers that like their current low taxes while the rest of our state taxpayers pay a much higher proportion of their income in taxes.

Washington State has been ranked as the most regressive tax system in the country for many years now.  As Jon Talton noted this year in the Seattle Times:

“In the latest Who Pays? report by the non-partisan Institute on Taxation and Economic Policy, Washington state has “by far” the most regressive tax system in the nation. Poor residents here pay 16.8 percent of family income in state and local taxes while the wealthiest 1 percent pay only 2.4 percent.”

Tim Eyman’s latest initiative I-1366 is a quagmire of problems for Washington State.

I-1366 Problems:

  1. Is this proposal constitutional? Voters are not empowered to pass a Constitutional amendment unless first Legislators by a 2//3 vote place it on the ballot. Voters cannot force Legislators by initiative to vote a certain way.
  2. Are extortion tactics legal? Removing $1 billion/year from the state budget unless the Legislature votes a certain way is not the normal way representative government work. Extortion and bullying should be rejected. Essential state services like educating our kids would be directly impacted next year and  into the future as the Legislature resists Eyman’s Ted Cruz shut down the government tactics  to try to get his way..

The problems with passing a 2/3 Constitutional amendment.

  1. A 2/3 vote requirement in both Houses would  empower a super minority of 12% of  our State Legislators to overrule a majority of legislators. It would only take 17 Senators out of 147 Legislators to prevent any revenue increase or repeal any tax loophole. That means that 12% of all the Legislators could over rule a majority up to 65% of all the  legislators in both the House and Senate and prevent action. This is not what the founders of our State and our Constitution envisioned and should be rejected. It would give special powers to a minority of Legislators by allowing them to trump any action by a majority of legislators voting in both Houses.
  2. It would require a 2/3 vote of both Houses of the Legislature to repeal tax exemptions and loopholes even if they are no longer working or no longer a priority of state government. Only a majority vote is required to pass a tax exemption. Currently according to the Washington State Department of Revenue in their latest 2012 Tax Exemption Study, Washington state exempts as much in tax revenue as it collects. For example In that report it noted that in the previous biennium the state  collected some $6.5 billion in B&O taxes but exempted some $7.6 billion from collection.
  3. It would lock in our existing regressive tax system from any reform by the Legislature. A 2/3 vote in both Houses would be required to pass any new revenue source, even if the overall result was revenue neutral.

Vote NO on I-1366. Extortion style tactics that will take critical funding away from schools and educating our children have no place in our state. Pushing an absurd constitutional amendment through extortion tactics to give 12% of our state legislators veto power over majority votes for raising revenue for needed public services, repealing tax exemptions that are not working and preventing reform of our regressive tax system needs a resounding NO vote.

see also www.No1366.org

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Posted in Elections, Initiatives, Tax Exemptions, Washington State Legislature

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Washington State Democrats Oppose Eyman’s Initiative 1366

Posted on May 23rd, 2015 | Comments Off on Washington State Democrats Oppose Eyman’s Initiative 1366

The Washington State Democrats at their April 18, 2015 quarterly meeting in Pasco, Washington passed a resolution opposing Tim Eyman’s Initiative 1366. Initiative 1366 is expected to be on the Nov 2015 ballot.

Initiative 1366 is a Senator Ted Cruz Tea Party style measure, trying extortion tactics to impose minority rule over Washington State’s budget and revenue policy. In what is probably an unconstitutional move, it intends to slash a billion dollars a year from the Washington State budget unless Legislators put a constitutional amendment for 2/3 votes to raise revenue or repeal tax exemptions on the ballot.

The Washington State Constitution says only Legislators have the power to place a constitutional measure on the ballot by a 2/3 vote of both houses. Eyman is ironically unable to convince legislators to do what he wants them to do and so is resorting to extortion tactics. He could just as easy have said Legislators would not be paid unless they vote for a constitutional amendment, or they would lose their driver’s license or they would be sent to jail until they vote for what he wants. That is extortion and not legal.

Here is the official ballot title and summary from the Washington State Secretary of State’s website:

Ballot Title
Initiative Measure No. 1366 concerns state taxes and fees.

This measure would decrease the sales tax rate unless the legislature refers to voters a constitutional amendment requiring two-thirds legislative approval or voter approval to raise taxes, and legislative approval for fee increases.

Should this measure be enacted into law? Yes [ ] No [ ]

Ballot Measure Summary
This measure would decrease the state retail sales tax rate on April 15, 2016, from 6.5 percent to 5.5 percent. The sales tax rate would not be decreased if, by April 15, 2016, two-thirds of both legislative houses refer to the ballot a vote on a constitutional amendment that requires two-thirds legislative approval or voter approval to raise taxes, and majority legislative approval to set the amount of a fee increase.

View Complete Text PDF

 

Below is the text of the resolution passed by the Washington State Democrats:

Resolution Opposing Initiative Measure 1366

WHEREAS Tim Eyman, Mike Fagan, and Jack Fagan have sponsored and are circulating petitions for Initiative 1366, filed on January 5th, 2015 as an initiative to the people for 2015; 

WHEREAS I-1366 would reduce the sales tax, and therefore approximately $1 billion in state revenue every year, thereby preventing the increased spending on K-12 education  required by the McCleary decision, while jeopardizing higher education, transportation  and the social safety net, unless the State Legislature follows the dictates of the initiative  and sends to the voters a constitutional amendment undemocratically requiring a two- thirds vote in each House of the Legislature to raise revenue or repeal any tax loophole; 

WHEREAS the Washington State Supreme Court in February 2013, in League of  Education Voters v. State of Washington, struck down as unconstitutional a  requirement of a supermajority vote to raise revenue, and Eyman’s I-1366 comprises a  devious attempt to evade that ruling by coercing lawmakers into colluding in his  underhanded scheme to overturn it by holding all state funding hostage; 

WHEREAS either the loss of a billion dollars per annum to our common wealth or the  undemocratic modification of our Constitution to require two-thirds votes to raise and  recover revenue would result in serious long-term damage to the communities of  Washington State; 

WHEREAS our state’s founders understood that democracy requires majority rules  with minority rights, and, after much debate and deliberation, they wrote a  Constitution for Washington specifying that bills in the Legislature are passed by a  majority vote, defined as greater than fifty percent – no more, and no less; 

WHEREAS any higher threshold for the passage of legislation would result in power  being concentrated in the hands of a few (rather than the many), such as one-third of  one house of the Legislature – as when I-601 and its clones I-960, I-1053, and I-1185 were  illegitimately in effect; 

WHEREAS allowing tax exemptions to be created by a majority vote, but repealed only  with a vote of two-thirds or greater, represents an unfair double standard that would  make it nearly impossible to reform our outdated and regressive tax system; and 

WHEREAS I-1366 would further violate Article IX of the Washington State Constitution  by making it impossible for the state to fulfill its paramount duty of educating  Washington’s youth; 

THEREFORE BE IT RESOLVED that the Washington State Democrats urge all  Washingtonians to refuse to sign Tim Eyman’s Initiative 1366 and, if it is placed on the  ballot, to oppose the measure; 

THEREFORE BE IT FURTHER RESOLVED that we encourage every activist and  citizen who supports the values that Washington was founded upon to join the  coalition opposing I-1366.

 

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Posted in Elections, Initiatives, Right Wing, Tax Exemptions, Washington State Legislature

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Eyman’s I-1366 is a Con Job on Most Washington State Taxpayers

Posted on April 14th, 2015 | Comments Off on Eyman’s I-1366 is a Con Job on Most Washington State Taxpayers

Washington State has a tax problem but it is not one Eyman’s Initiative 1366 will help. Requiring a 2/3 vote by Legislators to raise taxes would make Washington’s tax situation worse and would put special interests, the wealthy and corporations in charge of  running Washington State by giving them the ability to dictate our tax structure by having to only control the votes from 1/3 of the members of either the House or the Senate.

No longer would a majority or even up to 66% of Washington Legislators be able to decide how we would fund state services like educating our children. Seventeen State Senators out of 49 or 33 House Member out of 98 would  be able to overrule a majority in both Houses.

The problem is that requiring a 2/3 vote to raise taxes is a con job by those benefiting most – corporations and the very wealthy. Those less well off are paying the greatest proportion of their income in taxes – the rich pay much less -that’s why we are labeled the most regressive tax state in the nation.

From Mother Jones

“The nation’s most regressive tax code belongs to Washington, a state that was ranked by The Hill last year as the bluest in the country based on its voting patterns and Democratic dominance. The poorest 20 percent of Washingtonians pay an effective state tax rate of 16.8 percent, while the wealthiest 1 percent effectively pay just 2.4 percent of their income in taxes.

There’s a clear explanation for that: Washington has no income tax and thus heavily relies on a sales tax that disproportionately affects the poor. What’s harder to grasp is why Washington’s liberals put up with it.”

The 2/3 vote prevents repealing tax loopholes that are giveaways to special interests like oil companies. It prevents even revenue neutral tax reform to make our taxes less regressive because any increase in a tax, even if revenue neutral, requires a 2/3 vote.

And ever since I-601 in 1993 the Legislature has, except for a few years, had the 2/3 requirement as state law. When it was ruled unconstitutional in 2013 by the Washington State Supreme Court, Republicans controlled the Senate preventing even a majority vote to make changes.

Big oil companies like BP and Conoco Phillips gave Eyman money to support the 2/3 vote in the past – not to help low income folks with their taxes but to prevent the legislature increasing a tax on cleaning up toxic substances like oil spills. The 2/3 vote requirement would allow 1/3 of the Legislators in one House to block any tax increase. That is why it is a con game. It would transfer the cleanup costs to taxpayers.

Do not sign I-1366.  If it gets on the ballot because Eyman is using paid signature gathers paid for by a few wealthy contributors like developer Clyde Holland and Kemper Freeman who owns Bellevue Square, vote NO!

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Eyman’s 2015 I-1366 is a Repeat of Eyman’s 2014 I-1325

Posted on March 27th, 2015 | Comments Off on Eyman’s 2015 I-1366 is a Repeat of Eyman’s 2014 I-1325

Initiative 1366, sponsored by Tim Eyman, is a citizen’s initiative for the Nov 2015 Election. It is a refiling of Initiative 1325 from 2014 which Eyman failed to get enough signatures on to qualify. Here are a couple of comments from last year  about this proposal.

Spokesman Review – Jan. 10, 2014 Editorial – “Eyman’s Tax Initiative Looking for a Problem”

Tim Eyman has a new idea, his worst ever, and that’s saying something.
The watch salesman turned initiative promoter submitted a proposal to the Washington Secretary of State on Monday that would compel the Legislature to enact and pass along to voters a constitutional amendment requiring a two-thirds vote by state lawmakers or voters on any tax increase.
How compel?
Initiative 1325 would cut the state sales tax rate to 5.5 percent from 6.5 percent. The change would reduce annual revenues by about $1 billion. But the reduction would not occur if the Legislature endorses the amendment by April 15, 2015.
In other words, the initiative puts a $1 billion gun to the head of legislators.
Eyman calls the incentive “oomph.” Blackmail is more like it.
…
This is not about protecting taxpayers. I-1325 is about keeping Eyman in business.

Crosscut, Feb 6, 2014 – “A 2/3 vote for tax bumps?  Tim Eyman will rise again” – article on a vote by the Legislature for a constitutional amendment for a  2/3 vote for revenue to be placed on the ballot. It received a vote of 25 to 21, far short of the 2/3 needed to put a constitutional amendment on the ballot.

“Minority Democrats countered that the Legislature struggled to meet financial requirements when the two-thirds requirement was in effect. They unsuccessfully tried to remove the two-thirds requirements to close tax breaks and to allow majority approval of some fund transfers covered by the supermajority requirement in Roach’s bill. The Democratic attempts failed.
Also, Democrats pointed to the need to comply with a 2012 Supreme Court ruling to upgrade education and to restore a frequently suppressed voters initiative to provide cost-of-living increases to teachers.
Democratic Senate budget chief James Hargrove of Hoquiam noted that it took two extra special sessions in 2013 to close two tax breaks to balance the state budget — with a simple majority rule in place. He said 17 senators — 12 percent of the entire Legislature  — could hold the budget hostage in order to get their pet bills passed. “It’s called the rule of 17, a super-minority,” said Sen. Karen Keiser, D-Kent.

From the Washington State Secretary of State’s website:

Ballot Title
Initiative Measure No. 1366 concerns state taxes and fees.

This measure would decrease the sales tax rate unless the legislature refers to voters a constitutional amendment requiring two-thirds legislative approval or voter approval to raise taxes, and legislative approval for fee increases.

Should this measure be enacted into law? Yes [ ] No [ ]

Ballot Measure Summary
This measure would decrease the state retail sales tax rate on April 15, 2016, from 6.5 percent to 5.5 percent. The sales tax rate would not be decreased if, by April 15, 2016, two-thirds of both legislative houses refer to the ballot a vote on a constitutional amendment that requires two-thirds legislative approval or voter approval to raise taxes, and majority legislative approval to set the amount of a fee increase.

View Complete Text PDF

Initiative 1366 is an Ted Cruz style of coercion measure, threatening to remove $1 billion a year in revenue from the state budget. It would severely cripple funding for education in this state.  It is a libertarian ant- government, anti-tax initiative intended  to lock in tax breaks for corporations and the wealthy and severely limit funding of public services by requiring a 2/3 vote to raise revenue or repeal tax loopholes.

Do not sign or support or vote for Initiative 1366!

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I-1366 – Another Eyman Initiative to Help Corporations and the Wealthy

Posted on March 23rd, 2015 | Comments Off on I-1366 – Another Eyman Initiative to Help Corporations and the Wealthy

Initiative 1366 is another Washington State initiative attempt by libertarian Tim Eyman to help the wealthy and corporate America avoid taxes and tax reform. With the most regressive tax structure in the country it is  a blatant attempt to prevent the Legislature from engaging in tax reform or eliminating tax exemptions that do not benefit the state or its citizens. It proposes to use an extortion tactic reminiscent of Senator Ted Cruz’s trying to shut down the Federal government to overturn the Affordable Care Act.

I-1366 would eliminate $1 billion in sales taxes per year  from the  state budget if the Legislature does not vote to put a constitutional amendment on the ballot for a vote. Eyman’s proposed amendment would require a 2/3 vote by the Legislature to raise taxes or eliminate tax exemptions.

Eyman is not able to secure anywhere near the required 2/3 vote required by the Washington State Legislature to normally put a constitutional amendment on the ballot.  So he is attempting this extortion tactic which requires only a majority vote of the public to reduce the sales tax by a billion dollars unless the Legislature takes a 2/3 vote and puts his “corporate tax loophole preservation amendment” on the ballot.

Something just stinks about this sort of extortion style tactics to get what you want rather than following the normal political process.  Eyman of course is trying to sell this to low and middle income voters as a way to keep their taxes low. The problem is that the reverse takes place. Washington State has the most regressive tax structure in the country according to a 2015 report by the Institute on Taxation and Economic Policy.

The ITEP report states that the lowest 20% of income earners (non-elderly) making less than $21,000 pay 16.8% of their income in state and local taxes. Meanwhile the wealthiest top 1% earning over $507,000 pay only 2.4% of their income in state and local taxes.

This is not the first year that Washington State held this distinction but it is an ongoing one because for many years Washington state has had a 2/3 vote requirement to raise revenue as well as repeal non-performing tax exemptions. Raising revenue as defined also includes the legislature changing a revenue source even if the overall revenue raised is neutral. This has made tax reform extremely difficult.

The 2/3 vote requirement first put in place by Initiative 601 in 1993, suspended several times and re-enacted several times by initiative until finally ruled unconstitutional in 2013 by the Washington State Supreme Court. The court declared that the 2/3 voting requirement to raise revenue violated Article II, Section 22 of the Washington State Constitution which stated that for a bill to become law it needed a majority vote.

Eyman uses the fear of tax increases by the legislature on those hurting the most by the regressive tax structure of our state. This fear recently saw another defeat of an income tax initiative – I-1098 which would have shifted more taxes to the wealthy and reduced the regressiveness of our  state’s tax structure.

Voters need to understand that 2/3 vote requirements like Eyman is proposing help the wealthy and corporations the most. They allow a minority of 1/3 of the Legislators in either Legislative house who are anti – government anti- tax to overrule a majority of Legislators that want both to enact a fairer tax system and also fund public services like educating our children and helping the needy. Eyman is motivated by an anti-tax anti-government libertarian agenda that puts wealth accumulation and concentration in the hands of a few.  There is no trickle down – it is more like a waterspout with only the rich having the buckets to collect the money.

Don’t sign I-1366 and if it gets on the ballot vote NO. Support tax reform to help end wealth inequality and tax regressiveness. Support raising the minimum wage. Don’t enact a law like I-1366 which will take a billion dollars out of funding for state education for our kids.  Don’t support passing legislation like I-1366 which helps corporations keep their tax loopholes and the wealthy pay a smaller share of their income in taxes than low and middle income earners.

 

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Posted in Economy, Initiatives, Republicans, Tax Exemptions, Washington State Legislature

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King County Legislative Town Hall Meetings March 14, 2015

Posted on March 10th, 2015 | Comments Off on King County Legislative Town Hall Meetings March 14, 2015

This Saturday, March 14, 2015 is a great time to meet with your Legislators across King County and urge them to act on  Democratic priority legislation.  Most legislative districts are holding town hall meetings.  You can attend your own LD or any other you want. Take this opportunity to get updated on the current status of bills. Use it to ask questions about the issues and bills you are concerned about and support or oppose.

Use the King County Democrats 2015 Legislative Agenda to focus in on Democratic priorities. Use the latest  bill tracking status (updated 3/9/2015)  to check the status of specific bills the King County Democrats are following.  Then let Legislators know your priorities and ask them to work to pass specific bills.

Other things you can ask include:

Are you going to fund K-12 education as mandated by the Washington State Supreme Court?
Are you going to eliminate any tax loopholes?
Are you going to pass a capital gains tax?
Are you going to address carbon pollution?
Are you going to make rail transport of oil safer?
Are you  going to raise the minimum wage?

Legislative  Town Hall Meetings

Saturday March 14

1st District – Sen. Rosemary McAuliffe, Reps. Derek Stanford and Luis Moscoso WhereNorthshore Senior Center in the Wellness Center, 10212 East Riverside Drive, Bothell, WA 98011 When: 10 a.m.. – noon

11th District  – Sen. Bob Hasegawa, Reps. Zack Hudgins and Steve Bergquist  Where:  King County Regional Communications & Emergency Coordination Center (RCECC) 3511 NE 2nd Street, Renton, WA 98056
When:1-3 p.m.

 30th District – Sen. Mark Milosca, Rep. Carol Gregory, Rep. Kochmar
Where:  Federal Way City Hall, Council Chambers, 33325 8th Ave S,, Federal Way, WA  When: 10 a.m. – 11:30 am Where: Milton City Hall, 1000 Laurel St, Milton, WA When: 12:30 pm – 2:00 pm.

32nd District – Sen. Maralyn Chase and Rep. Cindy Ryu Where: Shoreline Fire Dept. 17525 Aurora Ave. N. Shoreline, WA 98133 When: 2 p.m.-3:30 p.m.

36th District – Sen. Jeanne Kohl-Welles, Reps. Reuven Carlyle and Gael Tarleton Where: Phinney Neighborhood Association, community room, 6532 Phinney Avenue North, Seattle, WA 98103  When: 10 a.m. – noon

37th District – Sen. Pramiia Jayapal, Reps. Tomoko Santos and Eric Pettigrew Where: Rainier Valley Cultural Center—3515 S Alaska St, Seattle, WA 98118 When 9-11 a.m.

41st District – Sen. Steve Litzow, Rep. Tana Senn, Rep. Judy Clibborn Where: Somerset Elementary School, 14100 Somerset Blvd, Bellevue, WA  When 10 a.m. – 12 noon

43rd District – Sen. Jamie Pedersen, Speaker Frank Chopp and Rep. Brady Walkinshaw Where: Erickson Theater, 1524 Harvard Avenue, Seattle, WA 98122 When:1 p.m. – 2:30 p.m.

45th District – Sen. Andy Hill, Rep. Roger Goodman, Rep. Larry Springer Where Woodinville High School Auditorium, 19819 – 136th Ave NE, Woodinville, WA When: 10 am – 11:30

48th District- Sen. Cyrus Habib, Reps. Ross Hunter and Joan McBride Where: Redmond City Hall, 15670 NE 85th St., Redmond, WA 98052 When: 10 a.m. – 12 noon

Please attend a town hall meeting this Saturday and urge legislators to pass our priority legislation.  There will be no LAC meeting this Sunday, March 15th because we believe directly talking with Legislators this weekend is the best use of your time.

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Posted in Democrats, Tax Exemptions, Washington State Legislature

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Washington State Senate Republicans Again Want to Ignore State Constitution

Posted on January 9th, 2015 | Comments Off on Washington State Senate Republicans Again Want to Ignore State Constitution

“”The Republicans in the Washington State Senate when the Legislature convenes on Monday will try to bypass the Washington State Constitution calling for majority votes to pass legislation. Two Republicans – Doug Erickson of Bellingham and Mike Baumgartner of Spokane – have announced that they  intend to try to amend Senate Rules to require a 2/3 vote of the Senate to bring any  legislation calling for a tax increase to the floor for a vote. In a great display of hypocrisy, this vote will require by their calculation only a majority of Senators to pass it.

Republicans in the Senate have a 26 to 23 majority but it seems they are not content with even that – wanting to give 1/3 of the sitting Senators veto power over the other 2/3.  Thus a minority of 17 Senators, if this rule change passes, would have veto power over the wishes of 32 Senators – a clear coup of rule by the minority.  As the Spokesman Review’s Jim Camden notes ” This would cover bills with new taxes …, raises in existing taxes and reduction or elimination in tax exemptions, sometimes known as loopholes — unless they had a referendum clause that was sending them to the ballot for voter approval”

This rule would require that any attempt to repeal non performing tax exemptions or reduce the exemption would also need to have a 2/3 vote to come to the senate floor for a vote. In again a  twisted sense of majority rules it would only require a simple majority to pass a tax exemption.  All of the current 650 plus tax exemptions in place only required a majority vote. Yet even if the Legislature through its JLARC review process determined that a specific exemption was not resulting in any benefit to state taxpayers, like increasing state employment and jobs, 1/3 of the members of the Senate could prevent the exemption being cut. This is the power of minority rule – whereby even if a majority wants to eliminate a tax exemption because it is not benefiting the state or meeting state priorities, the minority position wins.

The framers of the US Constitution looked at this issue in the Federalist papers.  Alexander Hamilton in The Federalist Papers No.#22 noted:

“To give a minority a negative upon the majority (which is always the case where more than a majority is requisite to a decision), is, in its tendency, to subject the sense of the greater number to that of the lesser.” …

“…The necessity of unanimity in public bodies, or of something approaching towards it, has been founded upon a supposition that it would contribute to security. But its real operation is to embarrass the administration, to destroy the energy of the government, and to substitute the pleasure, caprice, or artifices of an insignificant, turbulent, or corrupt junto, to the regular deliberations and decisions of a respectable majority. In those emergencies of a nation, in which the goodness or badness, the weakness or strength of its government, is of the greatest importance, there is commonly a necessity for action. The public business must, in some way or other, go forward. If a pertinacious minority can control the opinion of a majority, respecting the best mode of conducting it, the majority, in order that something may be done, must conform to the views of the minority; and thus the sense of the smaller number will overrule that of the greater, and give a tone to the national proceedings. Hence, tedious delays; continual negotiation and intrigue; contemptible compromises of the public good. And yet, in such a system, it is even happy when such compromises can take place: for upon some occasions things will not admit of accommodation; and then the measures of government must be injuriously suspended, or fatally defeated. It is often, by the impracticability of obtaining the concurrence of the necessary number of votes, kept in a state of inaction. Its situation must always savor of weakness, sometimes border upon anarchy.”

Ironic isn’t it that Republicans who profess they want to uphold the Constitution would try to impose rules of legislative action that run opposite of what the framers of the US Constitution felt that government needed to do to be effective.  Majority rules for legislative action must be adhered to in passing legislation, not the imposition of rule by a minority to impose their will on the majority.

The Washington State Supreme Court has already ruled on the issue of majority votes being requires for passing legislation. It has ruled that requiring a supermajority like a 2/3 vote of all legislators is unconstitutional. This latest Republican proposed attempt to circumvent the Washington State Constitution shows the repeated hypocrisy of those that profess the need to adhere to the Constitution, in this case the Washington State Constitution, but repeatedly attempt to come up with ways to bypass it or ignore it to further their personal political agenda.

Voters need to take note of Washington Legislators like Senators Ericksen and Baumgartner who are not willing to abide by the intent and language of the Washington State Constitution and the Washington State Supreme Court and vote them out of office.

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Posted in Democrats, Republicans, Right Wing, Tax Exemptions, Washington State Legislature

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