Annotated Text of I-1325

Initiative Measure No. 1325  was filed January 6, 2014 by Tim Eyman and his associates. Its text, with annotations provided by Permanent Defense, is as follows.

AN ACT Relating to protecting taxpayers by limiting state taxes; amending RCW 82.08.020; creating new sections; and providing a contingent expiration date.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF WASHINGTON:

INTENT

NEW SECTION. Sec. 1. Over the past twenty years, the taxpayers have been required to pay increasing taxes to the state, hampering economic growth and limiting opportunities for the citizens of Washington. The people declare and establish that the state needs to exercise fiscal restraint by either reducing tax burdens or limiting tax increases to only those considered necessary by more than a bare majority of legislators. Since 1993, the voters have repeatedly passed initiatives requiring two-thirds legislative approval or voter approval to raise taxes. However, the people have not been allowed to vote on a constitutional amendment requiring this protection even though the people have approved it on numerous occasions.

This measure provides a reduction in the burden of state taxes by reducing the sales tax, enabling the citizens to pay for increases in other state taxes, unless the legislature refers to the ballot for a vote a constitutional amendment requiring two-thirds legislative approval or voter approval to raise taxes so as to limit tax increases to only those with broader legislative support than a bare majority.

DEBUNKING SECTION 1: Contrary to what Tim Eyman says here, citizens’ state and local tax obligations have been going down, not up, over the past twenty years. That is why our schools and other public services have become underfunded: we’re just not investing in them to the degree we should be. Eyman is fond of creating graphs where bars representing the absolute number of dollars coming into the state treasury are placed side by side, year after year. The bars look like stairs, with each bar higher than the next. But this isn’t a fair way to compare tax obligations from one year to another; it doesn’t account for inflation, population growth, or new development. Washington’s economy has grown significantly over the past twenty years, and public services have naturally grown along with it. When public services don’t keep up, quality of life suffers, and we end up with problems like overcrowding in schools or worsening traffic. We have to account for the fact that Washington in 2014 is a much different state than Washington in 1994 when we do comparisons. This is why economists use measurements like revenue and expenditures per $1,000 of personal income.

REDUCE THE SALES TAX UNLESS…

Sec. 2. RCW 82.08.020 (Tax imposed–Retail sales–Retail car rental) and 2011 c 171 s 120 are each amended to read as follows:

  1. There is levied and collected a tax equal to ((six)) five and five-tenths percent of the selling price on each retail sale in this state of:
    1. Tangible personal property, unless the sale is specifically excluded from the RCW 82.04.050 definition of retail sale;
    2. Digital goods, digital codes, and digital automated services, if the sale is included within the RCW 82.04.050 definition of retail sale;
    3. Services, other than digital automated services, included within the RCW 82.04.050 definition of retail sale;
    4. Extended warranties to consumers; and
    5. Anything else, the sale of which is included within the RCW 82.04.050 definition of retail sale.
  2. There is levied and collected an additional tax on each retail car rental, regardless of whether the vehicle is licensed in this state, equal to five and nine-tenths percent of the selling price. The revenue collected under this subsection must be deposited in the multimodal transportation account created in RCW 47.66.070.
  3. Beginning July 1, 2003, there is levied and collected an additional tax of three-tenths of one percent of the selling price on each retail sale of a motor vehicle in this state, other than retail car rentals taxed under subsection (2) of this section. The revenue collected under this subsection must be deposited in the multimodal transportation account created in RCW 47.66.070.
  4. For purposes of subsection (3) of this section, “motor vehicle” has the meaning provided in RCW 46.04.320, but does not include farm tractors or farm vehicles as defined in RCW 46.04.180 and 46.04.181, off-road vehicles as defined in RCW 46.04.365, nonhighway vehicles as defined in RCW 46.09.310, and snowmobiles as defined in RCW 46.04.546.
  5. Beginning on December 8, 2005, 0.16 percent of the taxes collected under subsection (1) of this section must be dedicated to funding comprehensive performance audits required under RCW 43.09.470. The revenue identified in this subsection must be deposited in the performance audits of government account created in RCW 43.09.475.
  6. The taxes imposed under this chapter apply to successive retail sales of the same property.
  7. The rates provided in this section apply to taxes imposed under chapter 82.12 RCW as provided in RCW 82.12.020.

DEBUNKING SECTION 2: The text of the initiative doesn’t admit or acknowledge that reducing the state sales tax would wipe out about $1 billion per year in funding for our public schools. The paramount duty of state government is to provide for the education of Washington’s youth. The state sales tax and state property tax are primary used to fund K-12 education. The state’s general fund pays for other vital public services too, but K-12 education is the big one. The state’s universities and colleges are increasingly on their own and do not receive much assistance from the state treasury. Again, that’s because we are underfunding education. Given that the initiative would take away money from our schools, we believe it to be unconstitutional, as it would prevent the state from fulfilling its paramount duty under Article IX of our Constitution, which the state Supreme Court has ruled the state is already violating in the McCleary case.

…UNLESS THE LEGISLATURE REFERS TO THE BALLOT FOR A VOTE A CONSTITUTIONAL AMENDMENT REQUIRING TWO-THIRDS LEGISLATIVE APPROVAL OR VOTER APPROVAL TO RAISE TAXES

NEW SECTION. Sec. 3.

  1. Section 2 of this act takes effect April 15, 2015, unless the contingency in subsection (2) of this section occurs.
  2. If the legislature, prior to April 15, 2015, refers to the ballot for a vote a constitutional amendment requiring two-thirds legislative approval or voter approval to raise taxes as defined by voter-approved Initiatives 960, 1053, and 1185, section 2 of this act expires on April 14, 2015.

DEBUNKING SECTION 3: This section of the initiative guts education funding unless the Legislature does what Eyman wants and passes a constitutional amendment sabotaging our tradition of majority rule by mid-April of 2015. The amendment desired by Eyman would permanently transfer control over the outcome of decisions on raising or recovering revenue into the hands of a few instead of the many. See what we mean by looking at this pictogram.

CONSTRUCTION CLAUSE

NEW SECTION. Sec. 4. The provisions of this act are to be liberally construed to effectuate the intent, policies, and purposes of this act.

SEVERABILITY CLAUSE

NEW SECTION. Sec. 5. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

TITLE OF THE ACT

NEW SECTION. Sec. 6.  This act is known and may be cited as the “Taxpayer Protection Act.”

DEBUNKING SECTION 6: Eyman’s original title in previous drafts was “2/3rds Constitutional Amendment”, but he changed it, presumably after having been advised by the Code Reviser than an initiative cannot be presented as a constitutional amendment (they are different things). However, Eyman continues to falsely advertise I-1325 as a constitutional amendment.

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