Steve Zemke on Tim Eyman, the initiative process, and the need for tax reform
Steve Zemke has a long history of political activism in Washington State. He was a leading critic of the Washington Public Power Supply System (WPPSS), the arrogant energy consortium that thought it could build nearly half a dozen new nuclear power plants on the cheap. In 1981, he successfully sponsored Initiative 394 to require voter approval before bonds could be issued by pubic utilities to build major new energy facilities. Steve has also been involved in numerous initiative campaigns including growth management, recycling, cleaning up toxic waste, the presidential primary and raising the state minimum wage. He is one of the Northwest Progressive Institute’s founding board members, and currently serves as the director of TaxSanity.org. This interview was conducted and published in July 2003.
Q: Why will Tim Eyman’s newest initiative [which became Initiative 864 in 2004] be so devastating to public services?
A: Tim Eyman’s initiative to cut local property taxes by 25% will cut $550 million from local government. That is a huge impact. Local government includes counties, cities and towns, fire districts, libraries, park and recreation districts, water and sewer districts, irrigation and mosquito districts and emergency medical service to name some of these districts. Overall, there are some 1,700 local taxing districts across the state, representing the choice of Washington voters to have local control over local issues. When money is raised for a library district, voters know that it’s not going to be shifted to some other use. That is called accountability.
If these huge tax cuts take place, there will be increased pressure on the Legislature to help make up the cuts. Eyman claims voters can always vote to put the money back, but this is not the case. It results in several problems.
Repeated elections raise havoc with predictable budgets and job security. Laid off personnel move on to other jobs while elected leaders try to get levy approval. Training new people costs money. And then telling them is no job security because every 1 to 3 years there will have to be a public vote to continue their job is not going to get us the best qualified employees. Also, having so many elections cost money, both to local government and also to proponents trying to convince people that a levy raise is needed. It is certainly not an efficient way to run local government.
What people need to realize is that Eyman’s approach to government services is the libertarian one. Basically it’s that less government is better and no government is best. Using the subterfuge of saving people money by cutting taxes, his real goal is to reduce government.
Eyman cannot point to specific waste in government or services to cut. Instead he hides behind a tax cutting mantra that appeals to people’s selfish interests and fools them into thinking they will be better off. Unfortunately, by the time people realize the true impact of tax cuts means losing services like fixing roads and keeping their libraries open or having parks and recreation areas kept up, it is too late.
Q: Why aren’t Tim Eyman’s proposals good solutions to our regressive tax system?
A: Tim Eyman’s agenda appears to be to cut taxes at any cost. That is the problem. There is a complete disconnect with what the consequences will be of cutting taxes. For example, his current proposal is to cut local property tax by 25%. That’s just a number he picked out of the blue. It has no relation to the impacts of such a large cut and it has no relation to what services a local taxing district may provide.
Who has made a case that we need to reduce government services next year by as much as 25% for many tax districts? When a local government has to slash their budget, they have to choose between several bad options, like cutting the pay of frontline workers, scaling back library hour,s or limiting when parks are open. Most cities and counties do have a mixed revenue base – for instance, sales tax revenues and parking meter fines. But other taxing districts, like fire districts, rely entirely on property taxes, so they have no money to shift. About ninety percent of fire district’s budget goes for paying wages for firemen. So expect that a 25% local property tax cut means the loss of one out of four firemen.
But where is the study or the documentation to say that this is in the taxpayers best interest? There is no evidence to support such a cut. It is totally arbitrary and capricious. In fact, decreased fire service capacity will result in a decrease in the insurance rating for homes in that district and homeowners insurance bills will go up. That’s on top of regular insurance increases that seem to occur yearly.
Tim’s initiative would actually lead to much larger cuts in locales in eastern Washington since local road money is frequently matched by state and federal money. Most of these tax cuts will impact middle and lower income people more that wealthy people because the services provided by local government are ones lower and middle income people depend on. A prime example is the local public library or local parks and recreation areas. Most homeowners would only see a tax return of several hundred dollars, while large corporation and land developers will see breaks of a million dollars or more in their taxes.
Q: What’s your response to Tim Eyman’s statement that “critics have no alternative proposal”?
A: The truth is Tim Eyman has no alternative because he cannot think beyond his “cut taxes no matter what the consequences” approach.
Thirty seven other states have some sort of homestead exemption, which makes a lot more sense if our goal is property tax fairness for those who need it most – middle and low income households. But the actual consequence of Eyman’s proposal says he is more concerned about tax beaks for big corporations than the average homeowner. Eyman’s 25% across the board property tax proposal gives million dollar tax beaks to large corporations like Boeing and real estate speculators and large private utilities. Homeowners, meanwhile, see a tax cut equal to less than fifty cents a day or about the prices of one candy bar per day. And to top it off they lose local jobs and services to the tune of $550 million per year.
Lawmakers in the Legislature introduced a bill to create a homestead exemption for Washington state homeowner’s principal residence. Because it is revenue neutral it gives homeowners a tax break but it doesn’t cut local jobs and services.
The proposal would exempt from taxes 20% of the homes median value in the county the home is in. Statewide it is roughly equivalent to eliminating taxes on the first $30,000 of one’s principal residence.
Q: Do you think that Eyman’s 25% property tax initiative is, as he says, the homecoming game of his political career?
A: I suppose to Tim Eyman this is all like one big football game. It’s too bad he didn’t spend more time in college studying. Maybe then he would understand economics better. Why does he expect us to believe that cutting some $550 million in local government funding will somehow provide a $550 million economic stimulus to our state economy and that new jobs will be created and higher wages will result? The problem is that the $550 million he claims will be an economic stimulus is the same $550 million currently being spent by local government to pay our police and firemen, librarians and other local government workers. It is not new money. So we lay off local police and firemen and we get higher paying new jobs and stimulate the state economy with the money you “saved”? Sounds like more Eymanomics, not real economics.
Q: Why is budgeting and cutting taxes by initiative not a sensible solution for Washington State?
A: Initiatives are not good tools for writing budgets or cutting taxes. When we pass a tax cut measure the problem is you are not making any decision on which services to cut or even why. When any of us writes a budget we have expenses and income and like in most households, governments work to balance both sides. A tax cut initiative only looks at one side of the equation.
When local government prepares their budgets they have hearings and receive public input. When has Eyman ever gone to the public in an open public hearing to get input on his proposals? He hasn’t. They have all been written in secret with no public input. That is one reason why they have been so poorly written and have frequently been overturned in court. Also he refuses to ever say what he thinks is wasteful in government or what services should be cut.
That’s because if he were to do that, his support would drastically drop as people realized the impact of what they were doing. Many people dislike taxes, but those same people may also be opposed to seeing their fire and police protection cut, allowing prisoners let loose early from jail or their local park or recreation area or swimming pool closed because there is no money in the budget for it anymore.
Q: What, in your view, is an appropriate use of the initiative process?
A: The initiative process is a tool of last resort for citizens to use when the Legislature repeatedly refuses to address issues. The Legislature has a deliberative process that involves public hearings and considers amendments. A series of votes is required to pass legislation, allowing for additional review at each stage. With a bill starting in the House there is a vote to vote a bill out of committee and 3 votes, first, second, and third readings, in the Ways and Means Committee and a vote on the House floor. Amendments can be offered in committee and from the House floor. Once it passes the House, it goes over to the Senate where the process repeats.
If the Senate version is different from the House then it goes to conference committee and once out of conference, needs a vote again of both the full House and the Senate. Even if it gets through all of these steps it can be vetoed by the Governor. A two-thirds vote of both houses can override a governor’s veto. Basically a bill gets a lot of scrutiny and needs a lot of support to become law. The process works because of all the scrutiny the legislative process requires to pass a bill.
Unfortunately, most initiatives get little or no review before they are exposed to the voters. That is why the Legislature should enact legislation requiring public hearings on initiatives, once they have been approved for placement on the ballot, in each of our congressional districts. Such hearings could increase public awareness and for citizen scrutiny. Otherwise, all most voters will hear is the voice of moneyed interests trying to buy the citizen’s vote. An alternative is something called the Citizens or Voters Initiative Review which would involve two dozen randomly selected voters or citizens spending five days hearing the pro and con sides, getting additional factual information, discussing and then voting with their recommendation of whether the voters should approve a measure or not.
Many good laws have been passed in this state by initiative by citizen activists. Unfortunately, now with the use of paid signature gatherers, anyone with enough money can buy their way onto the ballot.
In the end, it is ultimately the voters who decide. Voters need to educate themselves about the initiatives they vote on. They need to read the text of initiatives before they sign them. They need to urge legislators to hold public hearings on initiatives.
And they need to urge the press to investigate claims and statements and ads run by both sides of initiative campaigns.
If the media basically just prints or repeats what a campaign emails them, like some have done with Eyman’s releases, without even checking or questioning what is being given to them, then they are basically no more than mouthpieces for that campaign and are not providing a service to the public. They have been co-opted. For a better future, citizens need to demand more from the media than that.