Washington State Democratic Party Urges Voters to Reject Initiative 1366

The Washington State Democrats have urged voters to reject Initiative 1366. At their April 12, 2015 meeting in Pasco Washington they passed a resolution opposing Tim Eyman’s Initiative 1366.

Initiative 1366, according to a May 17, 2015 Seattle Times article  is expected to be on the Nov 2015 ballot.

Buoyed by new wealthy patrons, Eyman’s Initiative 1366 — which would punch a $1 billion a year hole in the state budget unless lawmakers refer a tax-limiting constitutional amendment to voters — looks well on its way to the November ballot.

The latest Eyman campaign already has raised more than $1.1 million and spent $750,000 on paid signature gatherers.”

Initiative 1366 adopts Senator Ted Cruz Tea Party style tactics, using extortion tactics to try to impose minority rule over Washington State’s budget and revenue policy. Its purpose is to slash a billion dollars a year from the Washington State budget unless Washington State Legislators place  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. The same 2/3 threshold Eyman is trying to impose for raising revenue he is iunable to convince legislators to do for a constitutional amendment. So he  is resorting to extortion and bullying tactics. Who loses are the children in our state if revenue is cut $1 billion/yr.

How can a majority vote compel a 2/3 vote? This is most likely an unconstitutional  abuse of power and not legal. Voters should just reject such extortion style tactics.

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.

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

Washington Senator Sharon Nelson Speaks Out on the Need for Tax Reform

At a special hearing in Olympia representing Washington residents from all 49 legislative districts on May 4, 2015 the voices were loud and clear about the need for tax reform.

Washington State for a number of years has earned the unfortunate distinction of being the most regressive state in the country in terms of state and local taxes. The Institute on Taxation and Economic Policy noted that the poorest 20% in Washington State paid 16.8% of their income in state and local taxes while the richest 1% paid only 2.4%.

Senator Sharon Nelson concisely stated the reason why reform was needed:

“Washington’s outdated and unfair tax structure is in dire need of a makeover,” said Senate Democratic Leader Sharon Nelson, one of more than a dozen Democratic lawmakers who were in attendance for Monday’s hearing. “It is unconscionable to continue to prop up a system that asks more and more from people who are barely getting by, while at the same time giving away millions in tax breaks and asking for very little from the super wealthy. We’re not trying to punish anyone, but it’s not unreasonable to ask those who have been very financially successful to pay their fair share.

“We are all in this together and it’s time we had a tax structure that reflects that.”

Unfortunately for most of the last 20 years Washington State was operating under legislation passed by voters that in 2013 was ruled unconstitutional by the Washington State Supreme Court – namely the requirement started under Initiative 601 and continued by initiatives put on the ballot by Tim Eyman and approved by voters that any legislation to raise revenue or repeal tax exemptions required a 2/3 vote of both houses of the Legislature.

Under these initiatives unfortunately any tax reform that happened, even a revenue neutral one to make our taxes less regressive, required a 2/3 vote because any tax “increase” required a 2/3 vote even if overall the change was revenue neutral.

Unfortunately the Republicans took over the Senate in Washington State in 2013 and they have continued to oppose efforts to raise revenue or institute tax reform to change Washington State’s regressive tax system.

For change to occur Democrats supporting tax reform will have to take back the Senate and elect enough Representatives who support reform to make it happen in the house.  They will also have to re-elect Democratic Governor Jay Inslee as a Republican Governor would more than likely veto any tax increase that increased taxes, such as on the rich

Initiative 1366 is Eyman’s Latest Effort to Increase Income Inequality

Initiative 1366 is Tim Eyman’s 2015 initiative campaign to protect the wealthy and corporations in Washington State. It is both an appeal to greed and a guaranteed way to prevent reforming Washington State’s regressive tax system.

Initiative 1366 is an extortion style measure designed to fulfill an Eyman dream – to force the Washington State Legislature to place a constitutional amendment before the voters to allow a minority of one third of the Legislators in one house of the Legislature to prevent raising any new revenue or repealing any tax exemptions.

The Washington State Supreme Court ruled in 2013 that requiring a 2/3 vote of Legislators to enact tax increases or repeal tax exemptions as was passed by voters by initiative was unconstitutional. As noted in the Tacoma News Tribune at the time:

“In a landmark ruling 20 years in the making, the Washington State Supreme Court this morning struck down Initiative 1053 as unconstitutional. The court majority said the constitution controls the majority needed for tax hikes and the constitution requires only a majority of the members of the House and Senate.

That means the only way for backers of the so-called super-majority for tax hikes can achieve that goal is to go through the more-burdensome method of amending the constitution which itself requires a two-thirds vote of both houses and then a majority vote of the people.”

Unfortunately for Eyman in an ironic twist, under the Washington State Constitution requiring a 2/3 vote by the Legislature to propose a constitutional amendment, Eyman is unable to muster a 2/3 vote. So Eyman is trying to force the Legislature to act. He is using extortion tactics reminiscent of Senator Ted Cruz.

The Washington State Supreme Court in it’s McCleary decision said the state was shirking its constitutional responsibility by not adequately funding public education. Eyman’s I-1366, rather than moving the state forward, proposes to blow a big hole in the ability of the state to perform it’s constitutional responsibilities.

I-1366 proposes to cut the state sales tax from 6.5% to 5.5% decreasing state revenues by $1 billion per year unless the Legislators comply with Eyman’s demands. and put a constitutional amendment on the ballot.

Besides this immediate impact if voters approve I-1366 and don’t act on Eyman’s demand for a 2/3 vote on a 2/3 constitutional amendment, a 2/3 vote requirement in the Constitution  would permanently change the way the Legislature functions by turning revenue decisions over to a minority 1/3 faction of the legislature to overturn any decision by a majority vote to raise revenue or repeal tax loopholes. In a bizarre twist it would allow a majority vote to enact or extend tax exemptions but require a 2/3 vote to repeal them.

Tim Eyman is busy collecting signatures by paid canvassers to place Initiative 1366 on the November 6, 2015 ballot.  He has until July 2, 2015 to collect a minimum of 246,372 valid signatures.

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

Do not sign I-1366 and if it gets on the Nov. 6th ballot Vote NO. Don’t turn our Legislature over to special interests, the wealthy and Big Corporations.

See also No on 1366 website

Brad Owen Acts to Uphold the Washington State Constitution

In a ruling today, March 2, 2015,  Brad Owen, the Lt Governor and presiding officer of the Senate did the right thing. He ruled that the Senate rule passed by the Republicans in the Washington State Senate earlier this year to require a 2/3 vote to raise revenue was unconstitutional and thus void. As noted in a press release by the Northwest Progressive Institute, Brad Owen stated:

“The President has previously stated, The Senate cannot pass a rule that violates the state Constitution,” …: “Perhaps that statement should be clarified to read, The Senate may adopt an unconstitutional rule, but the President will not enforce it.”

The Washington State Supreme Court ruled in 2013 that requiring a 2/3 vote of legislators to raise revenue was unconstitutional because the Washington State Constitution said laws shall be passed by majority votes. As written in the Tacoma News Tribune at the time:

The language and history of the constitution evince a principle favoring a simple majority vote for legislation,” wrote Justice Susan Owens for the 6-3 majority (previous posts mistakenly said Chief Justice Madsen wrote majority). “The State’s proposed reading of article II, section 22 would fundamentally alter our system of government, and such alteration is possible only through constitutional amendment. Washington’s government was founded as a representative democracy based on simple majority rule.” “The Supermajority Requirement unconstitutionally amends the constitution by imposing a two-thirds vote requirement for tax legislation. More importantly, the Supermajority Requirement substantially alters our system of government, thus enabling a tyranny of the minority.”

Brad Owen based his decision on the Washington State Supreme Court decision. As the Tacoma News Tribune reported today:

“The state Senate’s presiding officer said Monday he won’t enforce a Senate rule making it harder to raise taxes.The rule violates the state constitution, Lt. Gov. Brad Owen ruled. With the ruling by Owen, a Democrat, the votes of 25 of 49 senators are required to move a tax through the Senate, the same 50-percent-plus-one majority as required in the House. The rule required a two-thirds supermajority to bring a bill to a final vote if the bill created new taxes. In invalidating it, Owen relied on a 2013 state Supreme Court ruling striking down voter-passed requirements for two-thirds supermajorities for taxes.”

Unfortunately the Tacoma News also gives a plug for libertarian anti tax Tim Eyman who for years pushed the unconstitutional 2/3 voting requirement in initiative campaigns. He is now pushing a “Ted Cruz style shut down the government stop educating our kids until I get my way” initiative.While he like the 2/3 voting proposal when it suits his purpose, he hates it when it is an obstacle to get his way.
The Washington State Supreme Court said the only way a 2/3 rule could apply was if it was in the Washington State Constitution. But that’s the kicker – it takes a 2/3 vote of the legislature to put a constitutional amendment on the ballot. Eyman doesn’t have anywhere near what he needs for 2/3 since Republicans are his main base of support.  And they are in the minority in the House and barely 2 votes over a majority in the Senate.
Eyman’s answer – have voter’s cut $1 billion from the state budget until they put a constitutional amendment on the ballot. Voters would be ill served by starting to hold the legislature hostage to ransom since voters would be the ones suffering by seeing public education and other services cut even more.
Many voters miss the connection that who really benefits is large corporations who don’t want tp pay taxes like for cleaning up their pollution. Big oil companies like BP and Tesoro gave Eyman money in the past so the legislature couldn’t raise funds from them to clean up oil pollution. It the average individual and family taxpayers who suffer as a result because they have to pay instead of the polluters who are making huge profits.
In addition BP and other corporations don’t want to see their tax loopholes end.  While they only take a majority vote to enact, under the 2/3 proposal it would take a 2/3 vote of the legislature to end them, even if they provided no benefit to the state. The 2/3 vote proposal actually puts the minority in charge of tax policy since 1/3 of the Legislators in either house could then block tax legislation.
All in all it is a bad dealer for working families and most taxpayers in our state. Corporations love the idea. Don’t be fooled.  Don’t support Eyman’s latest corporate benefiting initiative that would further damage education in our state. Don’t sign Initiative 1366.

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Why Enacting HB 1239/SB 5492 Would be Good Policy for Washington State

Tax preferences and tax incentives are called tax expenditures by most other states and the US Congress – they are revenue that is not collected. Not collecting this revenue from certain taxpayers is a form of picking winners and losers and the end result is the same as if you made a direct expenditure to that same entity as a line item expenditure in the general operating budget.

HB 1239 / SB 5492 – the Tax Exemption Transparency and Accountability Act – addresses the issue of the magnitude and consequences of off budget spending in the form of tax expenditures in Washington State.  This off budget spending from the tax base creates a lack of accountability and transparency in how tax revenue is dealt with. Tax expenditures are not included in the biennial  state budget process and this creates a lack of accountability and transparency.

One big problem with the state budget process is that we are one of only 6 states according to a 2011 Center on Budget and Policy Priorities Report that do not produce a tax expenditure report every 2 years or less. Our 2012 Tax Exemption Report is based on 2011 data and is 4 years out of date. The result is that tax exemption data is not even coordinated and integrated with the budget process.

The magnitude of off budget spending in the form of tax expenditures is staggering when compared to the regular expenditures in the state budget. The dollar value of tax expenditures in our state is about the same amount as actual revenue we collect as taxes and spend directly in the state budget.

The Washington State Department of Revenue noted in their 2012 Tax Exemption Report that the 2011-2013 budget projected collecting revenue of $22.8 billion and giving out tax expenditures equal to $21.2 billion.

They projected collecting $6.5 billion in B&O taxes but exempting as tax expenditures $7.7 billion.

In other words before we have even start looking at the regular appropriations budget we have already given away half of the potential revenue we would have if we had no tax exemptions.

There is no biennial linkage of what the Joint Legislative Audit and Review Committee (JLARC) does and the budget process for reviewing tax exemptions like what the Legislature does with the regular budget. JLARC has been producing reports for 8 years of a 10 year cycle. Very few of it’s recommendations have been acted on by the State Legislature. They are presented piecemeal over a 10 year cycle in a hearing before the House and Senate. No action is required to be taken by the Legislature.

Tax expenditures  are investments made at the  discretion of the Legislature in our state just like the expenditures they make as part of the omnibus budget appropriations bill they pass every two years. But tax expenditures never get the same scrutiny regular expenditures do because they are not part of the budget process.  They should be and that’s what HB 1239/ SB 5492 does.

HB 1239 / SB 5492 requires the State Legislature  to scrutinize and review the tax expenditures every two years and determine whether they are producing the results they were intended to.  They need to be evaluated the same as other expenditures in the state budget as to whether they are meeting the state’s needs and the priorities of government and are accomplishing the purpose for which they were enacted..

Tax expenditures are an investment just as if you invested in the stock market. Legislator’s by their tax expenditure and budget actions are  investing in the state and its economy.  It makes sense for the Legislature to scrutinize its whole spending portfolio every 2 years, not just half of it. Unfortunately individual tax expenditures which represent about half of the potential base tax revenue in the state are only reviewed piecemeal once every 10 years. And even then a number of tax expenditures are exempted from review. And for 90% of tax exemptions which have no sunset provisions on them there is no requirement for the Legislature to do anything.

Would you think the State Legislature was doing it’s job in scrutinizing state spending under the budget by only looking at individual expenditures once every 10 years? We don’t pass a state budget for 10 years at a time and decide that 90% of the expenditures actually never have to be adopted again..  Why does the Legislature think it shouldn’t have to reaffirm tax expenditures every 2 years just like it does with other state spending under the budget process?

It’s time for the Washington State Legislature to step up and be responsible for examining all state spending every two years by adopting a tax expenditure budget as part of the regular biennial budget appropriations process. It needs to enact HB 1239 / SB 5492  now!

Basic Facts on Tax Exemption Transparency and Accountability Act 2015

Tax Exemption Transparency and Accountability Act 2015–HB 1239 & SB 5492

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 last Tax Exemption Study in 2012, while the State collected some $6.5 billion in B&O tax revenue in the previous biennium, it exempted from collection some $7.6 billion. When sales and use taxes were included with the B&O tax collected, the results were similar – the state collected $21 billion in revenue but exempted almost $20 billion total.

Washington State has created some 650 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 account for over $24 billion in revenue not collected.

The taxpayers of this state have a right to know:

  • Who is getting these tax breaks?
  • How much money is involved?
  • Are these tax breaks benefiting the public?

Since these tax breaks affect the overall revenue available to the state and shift the tax responsibility onto those who don’t get the tax breaks, taxpayers have a right to know the answers to these three questions.

To be able to answer these questions, there is an urgent need to increase the transparency and accountability of Washington State’s prolific use of tax exemptions.

This legislation would do that by requiring 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. This would give the Washington State Legislature an opportunity to periodically evaluate the need and effectiveness of these 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.

This measure would require new and existing discretionary tax preferences to be authorized every two years in a tax expenditure budget. It will add much needed transparency 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 state biennial omnibus operating appropriations act would be required under this measure to include a tax expenditure budget to approve new and existing discretionary tax preferences, including exemptions, deductions, credits, and deferrals. The tax expenditure budget would detail the fiscal impact, purpose, and effectiveness in meeting the purpose of each tax preference. Tax preferences not included in the tax expenditure budget would expire at the end of the calendar year in which the budget is adopted.

Increasing tax exemption transparency and accountability

2015 House Bill 1239 Sponsors:

Representatives  Pollet, Appleton, Reykdal, Moscoso, S. Hunt, Stanford, Fitzgibbon, Kagi, Farrell, Ortiz-Self, Dunshee, Walkinshaw, Pettigrew, Tharinger, Ryu, Sells, Tarleton, Santos, Goodman, Cody, Wylie, McBride, Bergquist, Riccelli, Ormsby, Kirby

2015 Senate Bill 5492 Sponsors:

Senators Frockt, Kohl-Welles, Hasegawa, Billig, Conway, Keiser, Chase, Rolfes, Ranker, Jayapal, Miloscia, McAuliffe

HB 1239/SB 5492 – Official Bill Digest

Establishes the tax exemption transparency and accountability act.

Creates a tax expenditure budget as part of the biennial budget adopted by the legislature.

Reforms the tax expenditure process by including tax expenditures in a tax expenditure budget in the biennial state budget process and requires they be readopted every two years as part of the budget process or they expire.

Requires the joint legislative audit and review committee to report its findings and recommendations for scheduled tax expenditures to the citizen commission for performance measurement of tax expenditures by June 30th of each year.

 

Tax Expenditure Budget Bill Introduced Again in Washington State Legislature

Representative Gerry Pollet (LD-46) has reintroduced the Tax Exemption Transparency and Accountability Act in the 2015 Legislative Session. He was the prime sponsor of the bill in the House last year with 24 sponsors.

This year as HB 1239 it has 26 sponsors. They are Representatives Pollet, Appleton, Reykdal, Moscoso, S. Hunt, Stanford, Fitzgibbon, Kagi, Farrell, Ortiz-Self, Dunshee, Walkinshaw, Pettigrew, Tharinger, Ryu, Sells, Tarleton, Santos, Goodman, Cody, Wylie, McBride, Bergquist, Riccelli, Ormsby, Kirby

The bill has been introduced in the state Senate as SB 5492 by Senator David Frockt (LD-46). The Senate sponsors are Senators Frockt, Kohl-Welles, Hasegawa, Billig, Conway, Keiser, Chase, Rolfes, Ranker, Jayapal, Miloscia, McAuliffe

The bill digest is:

Establishes the tax exemption transparency and accountability act.
Creates a tax expenditure budget as part of the biennial budget adopted by the legislature.
Reforms the tax expenditure process by including tax expenditures in a tax expenditure budget in the biennial state budget process and requires they be readopted every two years as part of the budget process or they expire.
Requires the joint legislative audit and review committee to report its findings and recommendations for scheduled tax expenditures to the citizen commission for performance measurement of tax expenditures by June 30th of each year.

The state biennial omnibus operating appropriations act would be required under this measure to include a tax expenditure budget to approve new and existing discretionary tax preferences, including exemptions, deductions, credits and deferrals.  The tax expenditure budget would detail the fiscal impact, purpose, and effectiveness in meeting the purpose of each tax preference.  Tax preferences not included in the tax expenditure budget would expire at the end of the calendar year in which the budget is adopted.

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

 

Washington State Senate Republicans Again Want to Ignore State Constitution

.The Republicans in the Washington State Senate when the Legislature convenes on Monday Jan 12, 2014 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 required 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.

cross posted on Majority Rules

Tax Exemption Transparency and Accountability Act Filed in Legislature

Legislation to create a Tax Expenditure Budget as part of the regular biennial budget appropriations process has took a big step forward. Companion bills have been introduced in both the House and the Senate in the Washington State Legislature. They both had strong support.

Representative Gerry Pollet (LD 46) introduced HB  2721 with 25 sponsors total. Sponsors included Pollet, Reykdal, Fitzgibbon, Moscoso, Ryu, Appleton, Dunshee, Stanford, Farrell, Bergquist, Tarleton, Walkinshaw, Cody, Kagi, Pettigrew, Freeman, Riccelli, Jinkins, Lytton, Roberts, Wylie, Sells, Ortiz-Self, Gregerson, Goodman.

Senator Maralyn Chase (LD32) introduced SB 6477 with 9 total sponsors. These included Senators Chase, Hasegawa, Kline, Rolfes, Keiser, Kohl-Welles, Conway, Frockt, Ranker.

This legislation would require new and existing discretionary tax preferences to be authorized every two years in a tax expenditure budget. It will add much needed transparency 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 state biennial omnibus operating appropriations act would be required under this measure to include a tax expenditure budget to approve new and existing discretionary tax preferences, including exemptions, deductions, credits, and deferrals. The tax expenditure budget would detail the fiscal impact, purpose, and effectiveness in meeting the purpose, of each tax preference. Tax preferences not included in the tax expenditure budget would expire at the end of the calendar year in which the budget is adopted.

Support to help publicize and push for passage of this legislation is needed. We expect passage to be difficult given the current makeup of the State Senate but we are planning to reintroduce the legislation next year if it doesn’t move this year. We are heartened by the strong support of Legislators and others we have received to date.

Libertarian Eyman Continues Anti-Tax Rant with 2014 Initiative to Cut State Funding by $1 Billion/yr

Eyman’s 2014 Initiative 1325 is a rehash of Eyman’s previous unconstitutional 2/3 voting requirement initiatives imposed on  the Washington State Legislature to try to prevent them from raising revenue.  The Washington State Supreme Court in 2013  ruled that his previous initiatives requiring a 2/3 vote were unconstitutional.  The Court said the only way they would be valid would be if the 2/3 requirement were passed as a Constitutional Amendment.

His latest proposal, I-1325, proposes that voters approve cutting the state component of the sales tax, from 6.5 cents to 5.5 cents, if the state legislature does not put a constitutional amendment for a 2/3 vote requirement on the ballot for people to vote on. The 6.5 cents to 5.5 cents reduction is equal to a 15.4% cut in sales tax revenue to the state.  This would reduce the state revenue from sales tax by 1 billion dollars a year!

This would completely wipe out the State Legislature’s Budget increase last year of $1 billion as a down payment on meeting the mandate of the Washington State Supreme Court under the McCleary decision to fulfill the requirements of the Washington State Constitution to fully fund public K-12 education.  The current estimate is that by 2017 the Washington State Legislature will have to come up with over $4 billion dollars to do this.

Fortunately in Washington State you can not pass a constitutional amendment by initiative as some states can. To place a constitutional amendment on the ballot you need to get 2/3 of the Legislators in both houses to vote to do so.  And that is almost impossible to do as you only need 1/3 of the Legislators to oppose it to stop it being placed on the ballot. Note the irony here that the very system Eyman is proposing to require to raise taxes – namely a 2/3 vote of the legislators, is the same thing he is not able to get 2/3 of the Legislators to do   – to put a constitutional amendment on the ballot.

So Eyman, who seems to be channeling Ted Cruz and the Tea Party, has decided to repeat the same failed coercive, extortionist style tactics that failed so miserably for the Republicans last year in the US Congress when they decided to shut down the Government until they got what they wanted. They failed and are still suffering the public backlash.

Tim Eyman makes his living promoting anti-tax, anti government initiatives in Washington State. For over 10 years he has been filing numerous initiatives, usually getting one on the ballot every year.  In 2014 he has again already filed five measures and has said he is going to collect signatures on  Initiative 1325. Whether he has a sugar daddy this year to pay for the signatures remains to be seen but regardless it is not too early to discuss why I-1325 would be bad for Washington State.

Eyman’s initiatives are never about really solving problems, but are driven by the libertarian philosophy that the lower taxes are, the better, and the smaller the government is, the better.Unfortunately this is not going to provide the funding needed to run our state. It’s like your car needs repair and rather than fixing it, you say you’re not going to spend any money because you don’t like paying car repair people to fix your car. So you just keep driving it until it breaks down or you get in an accident.  No one like paying taxes but they are the price to have public services, like roads and schools and libraries and police and fire. We can either have a society where we all work together for the common good or we can vote for Tim Eyman’s measures where it’s everyone for himself or herself and tough luck if you can’t make it.

Two thirds votes run counter to basic democracy and working for the common good.  Rather than have a majority of legislators decide an issue like raising taxes, instead it lets one third of the Legislators in one House make the decision.  If they oppose raising revenue it takes only 17 Senators out of 49 Senators and 98 Representatives to vote no and their side prevails.  It allows a minority vote to decide.  The minority vote overrules the majority vote.

Who would support a constitutional amendment to allow a third of Legislators to pass legislation?  Yet Eyman’s proposal would allow a third of Legislators in one House to prevent legislation being passed, even if a majority of Legislators support it.

And it would allow a third of Legislators in one House to prevent repeal of tax exemptions that no longer work or are just tax loopholes not providing benefit to the state. Yet it only  took a simple majority vote to enact them.  This 2/3 constitutional amendment proposal is basically a tax loophole protection amendment – benefiting special interests like big corporations and BP Oil and Conoco Phillips and the Beer Institute who supported Eyman in the past who may have a loophole but making it impossible to repeal them in the future. That’s because Eyman defines repealing a tax loophole as a tax increase.

This is a bad policy proposal and Washington State voters need to not sign I-1325 or support it in any other way.