Democratic Representative Cyrus Habib announced today that he was going to run for the State Senate seat in the 48th LD in east King County. Candidate Joan McBride, former Mayor of Kirkland, announced that she was dropping her bid for Senate and would run for Habib’s House seat.
Joan McBride was the lone Democrat to challenge Senator Rodney Tom in the 48th LD. Rodney Tom, while professing to be a Democrat, bolted the Democratic Party two years ago when he aligned himself with the Republicans in the State Senate. This Legislative session he was the so-called Majority Leader as a result of joining with another Democrat professing to also be a Democrat – Tim Sheldon of the 35th LD, and aligning themselves with the minority 24 Republicans to be part of a “Majority Coalition”.
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The Tax Exemption Transparency and Accountability Act has been filed as bills in both the House and Senate in the Washington State Legislature. The prime sponsor of the House bill, HB 2721 is Representative Gerry Pollet. A total of 17 Legislators have signed onto the bill when it was dropped. The prime sponsor of the Senate bill SB 6477 is Senator Maralyn Chase. Eight Senators had signed onto the bill when it was dropped.
Democratic Senator Adam Kline of the 37th LD has announced that he will not re-run this year for the Washington State legislative seat he has held for many years. He has been a staunch advocate on many progressive issues and will be missed. In particular, unlike many other Legislators, he was willing to publicly oppose Tim Eyman’s many attempts to be Grover Norquist’s surrogate in Washington State. Eyman would repeatedly say government was wasting money and pushed initiatives to gut government funding by opposing taxes of any kind. Kline demanded Eyman publicly say what programs he thought should be cut and Eyman never responded, choosing instead to hide behind empty libertarian anti-tax rhetoric.
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Tax Sanity has been busy drafting legislation to create a tax expenditure budget bill to increase transparency and accountability over Washington State’s ever growing tax exemptions. The most recent special legislative session saw the Governor and the State Legislature push for additional tax breaks for Boeing, creating the largest state corporate tax break in the nation. As Reuters reported, “The Washington state legislature … passed a measure to extend nearly $9 billion in tax breaks for Boeing through 2040 in an embattled effort to entice the company to locate production of its newest jet, the 777X, in the Seattle area.” And even it may not be enough to keep Boeing here as now a race to the bottom is occurring as other states compete to try to lure Boeing to their state.
Tax Sanity believes the continued push to create more and more tax exemptions is out of control. There needs to be more accountability for results and more transparency in who is benefiting and who is losing. They propose doing this by requiring the legislature to create a tax expenditure budget detailing all the exemptions, their cost and who they benefit that the legislature has to adopt every two years as part of the general appropriations budget or exemption will expire.
Their latest draft which they are urging legislators to adopt has also been filed as an initiative to the legislature. Initiative 626 has just received the following ballot title and summary:
Initiative Measure No. 626 concerns taxes.
This measure would require new and existing discretionary tax preferences to be authorized every two years in a tax expenditure budget and repeal requirements for advisory votes of the people on tax increases.
Should this measure be enacted into law? Yes [ ] No [ ]
Ballot Measure Summary
This measure would require the legislature to approve new and existing discretionary tax preferences every two years, in a tax expenditure budget detailing the fiscal impact and purpose of each tax preference. The tax expenditure budget would be included in the biennial omnibus operating appropriations act. Tax preferences not included in the tax exemption budget would expire at the end of the fiscal year. The measure would repeal requirements for advisory votes on tax increases.
Washington State currently has over 650 tax exemptions. While some are required by our State Constitution or the US Constitution or by Federal law, the discretionary ones still number over 400. They are usually described as either an exemption, exclusion or deduction from the base of a tax; a credit against a tax; a deferral of a tax or a preferential tax rate. They are all off budget spending that once granted almost never is rescinded. Only 10% of them have sunset dates. They represent expenditures of tax dollars which if not exempted from collection would be available as state revenue to fund critical state needs like education or health care.
The magnitude of the situation is not clear to the general public. Yet last year the Washington State Department of Revenue in its once every four year report on tax exemptions listing the discretionary tax exemptions points out why they are more appropriately called tax expenditures. This is what most other states call them. They are revenue that is not collected from some taxpayers but is collected from others. They noted that while we collected some $6.5 billion in B&O tax revenue in the last biennium, we did not collect but “exempted” some $7.5 billion. We collected less than half the B&O tax revenue available if every business paid the same.
When the sales and use tax collection was added to the B&O tax collection, essentially the same net result occurred. The state collected some $21 billion in revenue but excluded $20 billion from collection. Tax exemptions continue to grow with the Legislature adding another 15 in the 2012 session.
The process is out of control. This is why Tax Sanity is urging the state legislature to let the public know the extent to which they are supporting tax expenditures, who is benefiting and how much they are receiving. No future legislature is bound by the actions of past legislatures. Legislators have a responsibility to use tax dollars wisely, including being judicious and wise in giving out tax breaks. The Legislature needs to be held accountable for the current out of control use of tax exemptions to benefit special interests and business while cutting public services like education and health care. Requiring them to adopt a tax expenditure budget every 2 years as part of the regular operating appropriations budget and end the shifting of state revenue to off budget spending that lacks accountability and transparency.
You can help in our effort to close tax loopholes in Washington State by signing our petition to Governor Inslee and your Legislators. We have created a petition on MoveOn.org to show support for closing tax loopholes. We support the Legislature being required every two years to adopt a Tax Expenditure Budget to end off budget spending via tax exemptions that lack the transparency and accountability that other state spending undergoes.
“In order to increase accountability and close tax loopholes, the Washington State Legislature should adopt a Tax Expenditure Budget as part of its biennial budget process.”
As off budget spending, tax exemptions lack the accountability that other state spending undergoes when the state approves its biennial budget. Tax exemptions are expenditures of state money that would otherwise be available to fund state services.
Tax exemptions reduce available funds for education, health care and other important state services. Many tax exemptions are actually tax loopholes that benefit special interests but don’t meet state priorities for funding.
Washington State currently has over 650 tax exemptions. According to the State Department of Revenue in the last biennium, while Washington State for B&O taxes it collected $6.5 billion but gave out $7.5 billion in exemption .Adding to the B&O tax collected the sales and use taxe,s the state collected some $21 billion total but it excluded from collection over $20 billion in tax exemptions. The system is broken. If every business paid the same in taxes, the state would have twice as much revenue or it. Or it could cut everyone’s taxes in half. Or it could split the difference both reducing taxes and collecting more revenue..
Requiring that the Washington State Legislature adopt a Tax Expenditure Budget every two years as part of the biennial budget process would make tax exemptions more open, transparent and accountable to Washington taxpayers. The Legislature needs to prioritize tax exemptions and close tax loopholes not meeting state needs.
Creating a Tax Expenditure Budget detailing the tax expenditures (exemptions) and the amount of revenue the Legislature is not collecting, will help Legislators to prioritize closing tax loopholes not meeting state priorities and needs.
The Washington State Ballot this November has five tax advisory votes which are very confusing to most people.
These tax advisory votes were put there by Tim Eyman’s Initiative 960 as his attempt to increase public resentment to any “tax” measures even when they benefit the larger public. The ballot title for each is basically written as an anti-tax push poll based on Eyman’s ballot title language in Initiative 960 that stipulated the ballot title wording.
They carry no Legislative weight as they only record voters opinions. In essence they are like a public opinion poll paid for by taxpayers. But Eyman tries to use them to show public opposition to funding public services by wording them such that voters will be inclined to respond negatively to any tax increase. Under Eyman’s definition of tax increases he also includes any efforts by the Legislature to repeal any tax exemptions or tax expenditures even if they are tax loopholes that only benefit special interests and not the general public.
Deciphering the ballot title language is very tricky and confusing. It waspurposely written to try to get voters to vote to repeal any tax increase passed by the Legislature. And unlike initiatives, the writeup on the so called tax advisory votes in the voter’s pamphlet contain no explanatory statement, no pro and con statements, and no fiscal impact statement.
In fact the State Attorney General had no real ability to even try to fairly explain the issue in the ballot title since Eyman’s initiative 960 required that the ballot tile be written as:
The legislature imposed, without a vote of the people, (identification of tax and description of increase), costing (most up-to-date ten-year cost projection, expressed in dollars and rounded to the nearest million) in its first ten years, for government spending. This tax increase should be:
Repealed . . .[ ]
Maintained . . .[ ]
I have made bold the mandatory wording required which by itself is intended to encourage people to vote to repeal any “tax increase”.
Both Democrats and Republicans voted by wide margins in the Legislature to approve all 5 of these measures, including to repeal some tax exemptions and fix the inheritance tax exclusion set up by a court decision, to secure revenue to help fund the budget.
Voters should vote to “maintain” these legislative decisions.
Advisory Vote No. 3 (Substitute Senate Bill 5444)
The legislature eliminated, without a vote of the people, a leasehold excise tax credit for taxpayers who lease publicly-owned property, costing approximately $2,000,000 in the first ten years, for government spending.
This tax increase should be:
[ ] Repealed
[X ] Maintained
Advisory Vote No. 4 (Senate Bill 5627)
The legislature imposed, without a vote of the people, an aircraft excise tax on commuter air carriers in lieu of property tax, costing approximately $500,000 in its first ten years, for government spending.
This tax increase should be:
Repealed [ ]
Maintained [ X ]
Advisory Vote No. 5 (Engrossed Substitute House Bill 1846)
The legislature extended, without a vote of the people, the insurance premium tax to some insurance for pediatric oral services, costing an amount that cannot currently be estimated, for government spending.
This tax increase should be:
Repealed [ ]
Maintained [X ]
Advisory Vote No. 6 (Second Engrossed Second Substitute House Bill 1971)
The legislature eliminated, without a vote of the people, a retail sales tax exemption for certain telephone and telecommunications services, costing approximately $397,000,000 in the first ten years, for government spending.
This tax increase should be:
Repealed [ ]
Maintained [X ]
Advisory Vote No. 7 (Engrossed House Bill 2075)
The legislature extended, without a vote of the people, estate tax on certain property transfers and increased rates for estates over $4,000,000, costing approximately $478,000,000 in the first ten years, for government spending.
This tax increase should be:
Repealed [ ]
Maintained [X ]
For additional information on these measures see the Washington State Voters Pamphlet which gives links to the actual bills passed by the Legislature. Click on the tab “full text” to read the original bill as passed by the Washington State Legislature.
You can also refer to the statement in the Progressive Voters Guide.
The Tax Advisory Vote requirement in I-960 is a waste of taxpayer dollars, both in the added costs to print up and tally ballot votes and the extra cost to print up Eyman’s required material in the Voters pamphlet. They represent an abuse of the public electoral process in that they are no more than a biased anti-tax slanted push poll conducted at public expense. The Advisory Tax Vote requirement in I-960 needs to be either repealed by legislators or the voters.
Tax Advisory Votes Might Not Mean Much But Cost a Lot, Seattle Times, July 16, 2013
Voters to Send Pricey Telegram with Five Tax Advisory Votes -Legislators will get scarlet letter, Erik Smith, Washington State Wire, July 23, 2013
The sole partisan contested Legislative Senate race on Washington State’s November General Election ballot is to fill the 26th L.D. Senate seat in Kitsap County vacated by Derek Kilmer. Kilmer was elected to Congress last November. Democrat Nathan Schlicher is a doctor who was appointed to fill the vacancy and is being challenged by Republican Jan Angel who was a Representative in the district and also the ALEC chair for Washington State.
Campaign dollars are flowing into this race and the total amount is fast rising. The combined total of money raised now exceeds $1,160,887 according to latest PDC filings as of the 10th of September.
( Two other Senate seats in the 7th LD and 8th LD are also on the ballot but comprise Republicans only as the top two Primary winners face off against each other)
The 26th LD race is receiving lots of attention and money because of the closeness of the makeup of the Washington State Senate, which essentially turned Republican, with the deflection last January of 2 Democrats – Rodney Tom of the 48th LD and Tim Sheldon of the 35th LD.
Last November Democrats won a 26 to 23 majority in the Senate but with the deflection of Tom and Sheldon this switched to a 24 Democrats to 23 Republicans to 2 turncoat Democrats. The 23 Republicans and two deflecting Democrats formed a Majority Coalition with Rodney Tom as the new Majority Leader. Democrats still controlled the House and the Governor’s office.
Here are the total campaign dollars reported so far and detailed donations to the candidates campaign committees.
See also the article by Jordan Schrader for The News Tribune entitled “Senate race between Angel, Schlicher funded by funds from afar” for more discussion on the independent contributions.
Nathan Schlicher – raised $314,701, spent $146,842
independent support for Schlicher- $39,040
independent opposition to Angel $189,899
Jan Angel – raised $453,046, spent $317,882
independent support Angel – $10,314
independent opposition to Schlicher $109,086
These numbers reflect a total of $536,640 supporting Nathan Schlicher and $632,446 supporting Jan Angel.
Nathan Schlicher – Major Contributions to Candidate’s Campaign Committee (not including individuals):
Washington Senate Democratic Committee $30,000
26th LD Democrats $5000
Kitsap County Democrats $3000
46 Electrical Workers PAC $1800
Campaign for Tribal Self Reliance $1800
Defense Economic Renewal Education & Knowlede PAC $1800
FUSE Votes $1800
IBEW Local 77 PAC $1800
Inland Boatman $1800
JUPAT PAC $1800
Justice for All PAC $1800
Kennedy Fund $1800
Our Patients Come First PAC $1800
Pac NW Regional Council of Carpenters $1800
Physicians Eye PAC $1800
Physicians Insurance $1800
Pierce County Firefighters Local 726 $1800
Proliance Surgeons, Inc $1800
SEIU Healthcare 1199 NWPAC $1800
SEIU Local 925 PAC $1800
Sheet Metal Workers Local 66 PAC $1800
Squaxem Island Tribe $1800
WA Family MED PAC $1800
WA HealthCare Association $1800
WA Medical PAC $1800
WA Machinists Council $1800
West Pierce Firefighters $1800
Jan Angel – Major Contributers to Candidate’s Campaign Committee (not including individuals)
Senate Republican Campaign Com $25,000
26th LD Republicans $4100
ACLI Political Activity Fund $1800
Affordable Housing Council of Kitsap County $1800
Atria Client Services, Inc $1800
American Chemistry Council $1800
Assoc of WA Spirits & Wine Dist PAC $1800
Avamere Living $1800
Avista Corp $1800
BNSF Railway Company $1800
CalPortland Co $1800
Cambria Health Solutions $1800
Cascade Natural Gas Company $1800
CNA Casualty Co $1800
Express Scripts Inc $1800
Farmers Employees Agents PAC $1800
Farmers Underwriters Assoc $1800
Georpia Pacific LLC $1800
Health Insurnance Agents PAC $1800
Insurers and Financial Advisers PAC $1800
Johnson & Johnson Corporate Political Fund $1800
Carmol Care Rehab $1800
Liberty Mutual Insurance Co PAC $1800
MAC PAC $1800
Nat Electrical Contractors Assoc PS Chap $1800
NFIB-WA Safe Trust $1800
Novartis Pharmaceutical Corp $1800
NRA Vistory Fund $1800
NW Grocers ASSoc WA PAC $1800
Pierce County Affordable Housing Council $1800
Premera Blue Cross $1800
Proliance Surgeons Inc $1800
Property Casualty Insurance Assoc America PAC $1800
Retail Action Council $1800
Sabey Corp $1800
SavPA – WA Financial League State $1800
Takeda Pharmaceuticals USA Inc $1800
Trucking Action Committee $1800
United Subcontractors Asoc MCAWW & NECA $1800
USAA – $1800
WA Beer & Wine Distributor’s Assoc PAC $1800
WA Beverage Assoc PAC $1800
WA Chiropractors Trust $1800
WA Farm Bureau PAC- State $1800
WA Food Industry Assoc PAC $1800
WA Multifamily Housing Assoc $1800
WA Physician Therapy PAC $1800
WA Restaurant Assoc PAC $1800
WAt Autodealer PAC $1800
WA St Troopers PAC $1800
WalMart Stores $1800
Willow Springs Care Inc $1800
WSVMA – PAC $1800
Yakima Valley Grocers Shipper Assoc $1800
The following letter to the editor of the Seattle Times was posted on their website yesterday. I wrote the letter in response to their editorial on Sunday entitled, “State lawmakers should listen to voters on I-1185 and the two-thirds tax law.” The Washington State Supreme Court ruled on February 28, 2013 that requiring a supermajority vote of the Legislature to raise revenue or pass any other ordinary legislation was unconstitutional. The Seattle Times choose to editorialize on the issue against the decision of the Washington State Supreme Court. My response:
The Seattle Times in its recent editorial errs in it’s judgment that supermajority votes are somehow in the best interests of our state. Logic says that to require a supermajority vote to pass legislation means that the minority interest would trump the majority interest. Under Initiative 1185, if 17 State Senators out of 49 Senators said no to a revenue bill to fund education, they would prevail over any majority vote by both the state Senate and House.
As the state Supreme Court noted, “ … a supermajority requirement for ordinary legislation would allow special interests to control resulting legislation. While the current Supermajority Requirement applies only to tax increases, if carried to its logical conclusion, the State’s argument could allow all legislation to be conditioned on a supermajority vote. In other words, under the State’s reasoning, a simple majority of the people or the Legislature could require particular bills to receive 90 percent approval rather than just a two-thirds approval, thus essentially ensuring that those types of bills would never pass. Such a result is antithetical to the notion of a functioning government and should be rejected as such.”
The issue here is actually not just a tax issue but but an issue of how our State legislature functions and whether or not minority interests can impose roadblocks to the majority of Legislators doing their jobs. It is absurd that this supermajority requirement has hindered the Legislators from doing their job for the larger part of 20 years. Ever since voters passed I-601 by a small margin of 51% to 49% the problem has persisted, illustrating how by a simple majority vote could give a minority of 1/3 of the legislators in one House of the Legislature veto power over the majority.
As pointed out by the Washington State Supreme Court in their opinion:
“…allowing a supermajority requirement for ordinary legislation alters our system of government. The framers of the United States Constitution expressed as much in the Federalist papers:
If a pertinacious minority can controul 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 over-rule that of the greater.
THE FEDERALIST NO. 22, at 141 (Alexander Hamilton) (Jacob E. Cooke ed., 1961);
accord THE FEDERALIST No. 58 (James Madison).”
Tell Your Washington State Legislators What You Think!
The four bills listed below are before the Washington State Legislature and need to be opposed. Urge your Legislators not to support these bills.
Oppose SB 5291 – “modifies provisions relating to signing and receipt of ballots”
This bill says that voters must “return or mail the ballot to the county auditor so that the ballot is received by the county auditor no later than 8 PM the day of the election or primary.”
This bill eliminates the ability to mail ballots and have them postmarked on Election Day and still count. With the upcoming elimination of Saturday mail it means ballots will have to be mailed Thursday or Friday with no guarantee they will reach the Elections dept on Tuesday.
Tell your legislators you want to be able to mail your ballots up to and including Election Day and still have them count.
Oppose SB 5277 – “reducing costs and inefficiencies in elections”
This bill will eliminate the printing of the text of ballot measures in the Voter’s Pamphlet. You would have to look them up on the internet rather than having them available to read as you fill out the ballot. Not everyone has easy access to a computer and this bill will make it harder to understand what it is you’re being asked to vote on.
Tell your Legislators not to eliminate printing the text of initiatives and referendum in the Voter’s Pamphlet.
Oppose House Joint Resolutions 4201 and 4206 – These two resolutions propose that the Legislature approve and submit to the voters a constitutional amendment requiring that the majority vote now in the Washington State Constitution that is needed to raise revenue be raised to a 2/3 voting requirement by both Houses, effectively giving a 1/3 minority of State legislators veto power over any increases in revenue to fund state services like educating our kids or providing for health care. A 2/3 vote would also be needed to repeal any tax loophole while allowing a simple majority to create new loopholes.
Tell your Legislators you oppose turning the power of the Legislature to fund state services like educating our children over to a 1/3 minority of Legislators. Leave the Washington State Constitution as it is. It does not need to be changed to benefit special interests and corporations.
Your Legislators can be sent e-mails at www.leg.wa.gov or you can call their offices directly and leave a message. Or you can call the toll free hotline at 1-800-562-6000.
On Monday two Washington State Senators elected as Democrats became Turncoats and turned control of the Washington State Senate over to the elected Republican minority. So much for party loyalty and adhering to the supposed principles and beliefs they ran on. The print edition of the Seattle Times headline says it all – “Senate power shifts into GOP hands“. The two Democrats who bolted the Democratic Party are Rodney Tom of the 48th LD in Medina and Tim Sheldon from Mason County.
Yesterday culminated a month long process that was already in play and not a surprise. Calling themselves the Majority Coalition Caucus is a joke. The GOP heavy “coalition” is comprised of the 23 Senators actually elected as Republicans and two Senators elected as Democrats but who have now joined with the Republicans to run the Senate. This shift gave the new “majority” a 25/24 vote margin and the ability to take over.
Rodney Tom was originally a Republican who switched it appears now mostly in name only to the Democrats when he ran last time. Tom and Sheldon both benefited heavily personally in this power switch with Tom becoming the new “majority” leader and Sheldon the president pro tempore. Both Tom and Sheldon were involved in a similar power shift at the end of last year’s budget process in the Legislature.
Rodney Tom is up for election in two years and the Democrats in the 48th LD last week passed a resolution condemning Tom for his actions:
The following resolution was adopted by the 48th Legislative District Democrats by a vote of 30-8, including Senator Tom’s vote against.
–Phil Kouse, 2013-2014 Chair
State Senate Leadership Rightfully Belongs
to the Elected Democratic Majority
the 48th District Democrats, according to our bylaws, exist “to contribute to the growth, development and influence of the Democratic Party” and to “support … those candidates who, by their records and reputations, are in general agreement with the [party] platform;” and
State Senator Rodney Tom was elected as a Democrat in 2006 and 2010 with the endorsement of, and financial and volunteer support from, the 48th District Democrats and other Democratic organizations and elected officials; and
Senator Tom has announced his intentions to oppose ratification of the Senate leadership and committee chairs chosen by the elected Democratic majority, instead installing Republicans to chair important committees, including Healthcare, K-12 Education, Judiciary, and Ways & Means; and
Republican control of the Senate would be a barrier to enacting legislation that advances Democratic goals and values, such as funding for K-12 education, broadened access to higher education, mental health counseling, insurance parity for reproductive care, and implementation of the Affordable Healthcare Act (“Obamacare”);
Therefore, be it resolved
that State Senator Rodney Tom is advised to vote to ratify the leadership chosen by the elected Democratic majority caucus; and
Be it further resolved
that by failing to vote for this leadership slate, Senator Tom will be thwarting Democratic values and the will of the people, rendering himself ineligible for our future endorsement and support under our bylaws.
Adopted this 9th day of January 2013, by the 48th District Democrats
A similar resolution is being considered by the King County Democrats and it is expected that the Washington State Democrats will likewise condemn Rodney Tom when they meet the beginning of February. Rodney Tom’s actions have pretty much guaranteed that if and when he runs for re-election in 2014 that this seat will be hotly contested. Likewise Democrats statewide will need to make a concerted effort to try and pick up other Senate seats to ensure that they have a real Democratic majority.
Between now and then don’t expect much to get done by the legislature on raising new revenue or repealing unneeded and costly tax loopholes. If action is to be taken in these areas it will have to be undertaken through an initiative from the people or at best a referendum by the legislature. The problem is that Republicans are so knee jerk anti-revenue, cut government only, that things may well get worse before they get better for the state budget and the state economy.
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