Meaningless tax votes, tax breaks for the well-off, vague tax agendas

Staff writerJuly 17, 2013 

Three columns, none deserving of all 690 words.

Waste, fraud and abuse, Tim Eyman style: Washington taxpayers will pony up $240,000 for a government program that has dubious benefits and has been proved ineffective.

Sounds like a job for Tim Eyman? Well, no, because this example of the waste of tax dollars is his creation.

Initiative 960 from 2007 sought to reinstate the two-thirds vote requirement for tax hikes. That concept has been found unconstitutional by the state Supreme Court, but a remnant of I-960 remains — nonbinding advisory votes that give voters the illusion of repealing tax increases passed by the Legislature.

To add an element of public shaming, the law also requires listing in the voter pamphlet how each legislator voted and their contact information, presumably to help voters deliver a scolding to those who voted yes. All that information adds pages and pages to the pamphlet. It also increases the cost.

This year’s November ballot — and this fall’s voter pamphlet — will contain details on five bipartisan tax measures. Two of them fixed existing taxes found technically flawed by the Supreme Court. Another would raise $195,000 a year, and another still would raise $41,000 a year.

Is the advisory vote process effective? In 2012 when these meaningless measures first cluttered the ballot, voters “repealed” all of them, yet none was subsequently repealed by legislators. Not a single legislative race was influenced by the process.

Eyman is arguing that all this is vital because the five measures will cost taxpayers $877 million.

“Gulp. That’s right: $877 million,” he wrote to supporters.

What he doesn’t make clear is that I-960 requires all taxes be measured by the amount they collect over 10 years so as to make the dollar amounts as gulp-worthy as possible.

Funny, though, that just two weeks ago when Eyman evaluated the Legislature on taxes, the notoriously hard grader gave it an A-minus.

Tax breaks for the prosperous: Sometimes the Legislature opens tax loopholes for struggling industries (like meat processors during Mad Cow scares and the newspaper industry during the recent unpleasantness). Sometimes lawmakers open them to attract new industries (like energy-sucking server farms and infant-formula processing).

Now, perhaps following the playbook perfected by The Boeing Co., otherwise successful companies receive tax breaks simply because they can. Northwest Public Radio’s Austin Jenkins reported this week about a last-minute loophole created by the Legislature primarily to benefit Russell Investments.

The company, which pitted Tacoma against Seattle in a tax-break war that Seattle won in 2010, threatened “severe and negative unintended consequences down the road” if it didn’t get a tax break from the state. That included moving the company again, this time out of state, according to threats confirmed by House Finance Chairman Reuven Carlyle.

The lawmakers fell for it and awarded favorable tax treatment for “digital data used by international investment firms” at a cost of $1 million a year. Russell is expected to capture the bulk of it to help out a very successful global company with 1,800 employees and $170 billion in assets under its management.

Agendas clear as mud: Open meetings are a good thing. But if the public doesn’t know what is on the agenda, it’s hard to make much use of open meetings.

So what would anyone not already on the inside make of an agenda item for Tuesday’s Tacoma City Council committee of the whole: “Sustainable Transportation Funding.”

Vague. And vaguely interesting. Or not.

At the meeting, City Manager T.C. Broadnax suggested the council put a tax-increase measure on the November ballot that would ask voters to approve a new tax on utilities – both public and private – to raise some $10 million a year. If passed on to ratepayers, as it surely will be, it will cost households about $5 a month.

Maybe a majority of residents are willing to pay since it will begin to fill potholes and make other fixes to city roads. But maybe they also want to be involved in the shaping of the measure but don’t know that “sustainable transportation funding” means a tax hike.

Peter Callaghan: 253-597-8657
peter.callaghan@thenewstribune.com
blog.thenewstribune.com/politics
@CallaghanPeter

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