Initiative 960 strikes nerve over state taxes

ADAM WILSON

Initiative 960 would set up a series of hurdles legislators would have to jump to raise taxes.

It would create an alarm system of sorts, forcing advisory votes by the public on tax bills and requiring an elaborate e-mail-notification program on the progress of tax proposals.

It would write into law protections against what sponsor Tim Eyman thinks is the most threatening power of government: taxation.

"There is no decision that government makes that has more impact on people's lives than the decision to take more of their money," said Eyman, I-960's most visible supporter.

Opponents argue that the state's ability to provide help for the poor and the elderly, to pay for schools and to keep the roads open would be needlessly blocked by the proposal.

"Of course people don't want tax increases. But we really are mandated by the Constitution to run the state, and if this passes it will be much more difficult," House Democratic Leader Lynn Kessler said.

Ties to I-601

This year's initiative is built on what's left of I-601, which set up barriers to tax increases in 1993. It made several changes, including:

• Requiring a two-thirds vote in the Legislature to approve tax increases.

• Limiting state spending growth to a percentage based on population growth and inflation.

• Requiring voter approval of any tax increase that would exceed that spending limit.

During the past 14 years, however, legislators have put more holes in I-601 than you'd find in a golf course.

An example: two years ago, Democrats voted by a simple majority to cancel the requirement that they pass tax increases with a supermajority. Then they passed tax increases with less than two-thirds approval.

The lawmakers did put the supermajority requirement back into effect this year, and changed the way the budget growth limit is figured.

But Eyman says the damage is done. I-960 would re-enact parts of the older anti-tax measure, and if it passes, lawmakers will not be able to get around the two-thirds requirement for at least two years.

That's because the state Constitution says initiatives can't be changed for two years after they pass without a two-thirds vote in the Legislature. "We want to make sure they actually follow that law. We want to make sure they can't circumvent that law whenever they want to," Eyman said.

If voters were upset over the Democrats' maneuvers around I-601, however, they didn't show it in the subsequent election. The party saw its majorities in the House and the Senate grow last year, draining power from the Republicans, who defended the spending limits and the two-thirds requirement.

Kessler said voters realized the Legislature was being careful.

"We targeted these very specific tax increases, two of which are totally voluntary (on cigarettes and liquor). They were targeted, and they were put into a specific fund, as was the estate tax, to try and fund education," she said.

I-960

In addition to re-establishing the two-thirds vote requirement for tax increases, I-960 includes other parts of the older tax limit law and goes beyond it:

• It would require a legislative vote on all fee increases.

• It would require a yes-or-no public vote on all tax increases.

• If a tax bill has an emergency clause — which prevents a referendum on it — the state would have to hold an "advisory vote" on the matter in the fall.

• It would create a new way to track tax bills, in which the state would have to send out multiple public e-mails on the bill's progress and include the names and telephone numbers of legislators involved. Critics say that together, the pieces of the proposal would create a legal mess.

"The initiative will likely require dozens of unnecessary legislative and public votes on routine actions while explicitly limiting the information from which voters can base reasoned decisions," said an analysis by the Washington State Budget and Policy Center.

The requirement for a vote on fee increases, for instance, would involve an unknown number of charges. The Office of Financial Management says there is no complete list of all fees charged by all state agencies.

An accounting of seven large agencies, however, totaled 2,489 — for things including health-professional licensing and environmental assessments. Some interpretations of I-960 say that increases in these fees could end up on the ballot because of the way the initiative defines "raises taxes."

It says that means any action that "increases state tax revenue deposited in any fund, budget, or account, regardless of whether the revenues are deposited into the general fund."

Under a worst-case scenario, that could mean that not only minor fee increases, but also simple accounting transfers from one fund to another might require a two-thirds vote in the Legislature and then public approval.

"It would be nuts," Kessler said. "I don't mind (tax increases) being on the ballot. It worked when we did the 9.5-cent gas tax. Clearly, the voters get it. But for every single fee increase?"

Others dismiss the notion that fee increases would require a public vote. Jason Mercier, an analyst for the Washington Policy Center, said fee increases are not supposed to go on the ballot under the initiative. And he suggested the thousands of fees could be rolled into a few large bills and approved together.

Revealing how many fees and taxes the state charges would be a benefit to the public, Mercier wrote in his analysis. "If Initiative 960 had been the law since 2003, voters would have had the opportunity to vote on approximately 20 advisory votes ranging from gas-tax increases to excise taxes on sea urchins," he said.