Eyman’s I-1366 would force Legislature’s hand — or cut sales tax

OLYMPIA — Tim Eyman’s latest ballot offering will gauge how far voters are willing to go to restrict state lawmakers’ ability to raise taxes.

If it passes Nov. 3, Initiative 1366 would trigger an economic consequence for the state unless voters are given the opportunity next year to put tougher rules for hiking taxes into Washington’s constitution.

The measure would reduce the sales tax by a penny unless a long-desired constitutional amendment requiring a two-thirds majority of the Legislature to raise taxes without a public vote is put on the November 2016 ballot.

“This is not a new idea,” Eyman said, launching into a recap of all the times voters endorsed a supermajority requirement. “We have had five votes on it. I feel like after five votes, voters have earned the right to be able to make this policy permanent.”

The initiative gives lawmakers until April 15 to refer a constitutional amendment to the ballot. If they don’t, the state would stand to collect an estimated $1.6 billion less in sales tax receipts in the current two-year budget. That’s about the same sum of new money that’s been pledged for public schools.

Initiative opponents contend the measure is a misuse of the initiative process. They use terms like “blackmail” and “extortion” to describe the potential loss of billions of dollars if lawmakers don’t comply.

“We’re concerned because Initiative 1366 would lock in place our state’s upside-down tax system and make it even more difficult to fund education,” said Collin Jergens, communications director for Fuse Washington, a statewide group of political progressives involved in the No on 1366 effort. “We don’t think that legislating by blackmail is an effective way to govern or fund education.”

Eyman defended the tactic.

“You need to give people a choice and allow the choice to convince them which direction they want to be able to go,” he said. “For every criticism of 1366 being really aggressive, if it’s this aggressive and voters vote for it that’s a pretty emphatic message that ‘Yes, we want it so much that we’re telling our legislators to either let us vote or allow us to keep some of our money.’”

Been there, backed that

Five times voters have approved initiatives requiring a two-thirds vote of the legislature or majority vote of the people to raise taxes. The first time occurred in 1993 with passage of Initiative 601 and the last came in 2012, when 64 percent of voters approved Initiative 1185.

In 2013, the state Supreme Court struck down the restriction. They concluded such a change could only be made by the legislative branch and not by voters with an initiative.

“Our holding is not a judgment on the wisdom of requiring a supermajority for passage of tax legislation,” Justice Susan Owens wrote for the majority. “Such judgment is left to the legislative branch of our government. Should the people and the Legislature still wish to require a supermajority vote, they should do so through a constitutional amendment.”

That’s the reasoning behind I-1366, Eyman said.

“We’re doing exactly what the Supreme Court told us to do,” Eyman said. “They said you need to pursue a constitutional amendment. That’s exactly what we’re doing.”

How it works

Under Initiative 1366, the state retail sales tax rate would drop from 6.5 percent to 5.5 percent on April 15 unless the Legislature refers a specific constitutional amendment to the November 2016 ballot.

That amendment must require any tax increase be approved either by a vote of the people or by at least two-thirds of the House and the Senate. This amendment must also include a requirement for lawmakers to set the amount of any fee increases.

If the sales tax rate is reduced, the Office of Financial Management estimates the state would collect $1.6 billion less in this budget and $8 billion less in the next six fiscal years.

But there’s a plus side too. If prices drop because of a lower sales tax, retail sales could climb. The state estimates that could result in more money — $226 million — for local governments in the same six-year period.

The battle lines

Opponents call it bad policy because it would allow a super-minority of lawmakers to block new taxes and eliminate tax breaks. When a tax break disappears, it results in higher taxes for the recipient.

“It’s anti-democratic,” said state Sen. Steve Hobbs, D-Lake Stevens. “This really ties our hands.”

Foes worry it will hamstring the state’s effort to adequately fund public schools by 2018 as the Supreme Court required in its McCleary decision.

Lawmakers are wrestling with how to pick up the tab for a slew of expenses, including teacher salaries school districts now pay for with local property tax levies. The additional cost is estimated at $3.5 billion per budget.

“Lawmakers face a growing array of funding challenges. Initiative 1366 does not give them any tools to solve them, and, in fact, it may cause further delays and challenges,” said Bill Keim, executive director of the Washington Association of School Administrators.

Rep. Hans Dunshee, R-Snohomish, put it more bluntly.

“It is a threat. It would destroy the quality of our schools,” said Dunshee, who is chairman of the House budget committee.

Even if voters turn this initiative down, Eyman said it won’t end his pursuit of a supermajority requirement. He’ll just have to find another method.

“There are many ways to make it tougher to raise taxes,” he said.

Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com

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