Initiative Filed for Tax Loophole Reform

Taxpayers Fiscal Reform Act – 2013

Changes are needed in the ability of the Washington State Legislature to fund basic services like education and healthcare. The current state budget problems are made more difficult by the lack of flexibility of the Legislature to make decisions by a majority vote as directed by the Washington State Constitution and by a tax expenditure/exemption process that is shielded from legislative oversight by virtue of not being part of the normal budget process.

Many people are frustrated by the current stalemate in the legislative process and want more choices than just throwing up their hands and suffering more cuts in state services and more costs to working families. More options are needed for the voters than just saying we have no real choices.

One option is now moving forward. It would reform our broken tax exemption process. Initiative 1276 – the Washington State Taxpayers Fiscal Reform Act has been filed with the Secretary of State and assigned a ballot title.

Here is the official ballot title and summary:

Ballot Title
Initiative Measure No. 1276 concerns state government revenue.

This measure would require majority legislative votes to raise taxes and certain fees; require additional revenue and expenditure reporting; retire tax exemptions after ten years; and allow adjustments to the state expenditure limit.

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

Ballot Measure Summary
This measure would require majority votes for legislative actions that raise taxes and fees, and eliminate any legislative approval requirement for certain fees. New or existing tax exemptions would expire after ten years, unless reenacted. The measure would make tax exemptions subject to the state expenditure limit and allow certain adjustments to the expenditure limit. It would require various bills, reports, and voter pamphlets to include additional information regarding state budgets, needs, fees, and taxes.

Initiative 1276 -the Taxpayers Fiscal Reform Act would: 

1.  Allow the Legislature to repeal tax exemptions by a majority vote by repealing the current unconstitutional 2/3 voting requirement. 

2. Add tax expenditures into the biennial budget process. 

3.  Require the Legislature to rank all spending, including tax expenditures as high, medium or low priority in meeting state needs. 

4.  Require that the Legislature must act to reaffirm all tax expenditures after they have been audited by the state or they will sunset. 

5. Limit any authorization or re-authorization of tax expenditures to 10 years. 

This initiative starts the process of tax expenditure reform legislation but the final version is dependent on the decision of the Washington State Supreme Court on the constitutionality of Eyman’s I-1053, which requires 2/3 votes by the legislature to enact any revenue measure considered a tax increase. Right now this includes eliminating tax exemptions. While this is filed as an initiative to the people it will quite likely become an initiative to the Legislature.

Your feedback is welcome and helpful in getting legislation passed.  You can either respond to this post below with comments or send your comments including suggested language changes to the e-mail below.

For more information, to offer comments on the initiative draft or to volunteer to help contact:

Steve Zemke

Director – Tax Sanity

2131 N 132nd St. Seattle, WA 98133      206-366-0811

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