November 23rd, 2011
Debunking Tim Eyman’s budget fabrications
Rethinking and ReframingStatements & Advisories
Eager to put the failure of I-1125 behind him, Tim Eyman has, in recent days, resorted to attacking one of his favorite targets (Governor Chris Gregoire) in his multi-weekly fundraising appeals to his band of followers.
Eyman’s latest email, dated today, is a doozy; to describe it as chock-full of fabrications would be a major understatement. It is impressively crammed with blatantly false statements and mischaracterizations.
On occasion, we take the time to deconstruct Tim Eyman’s nonsense blow-by-blow, to illustrate what we mean when we say that he is a snake oil salesman.
We’ve done that again today.
For your reading enjoyment, here is the most dishonest, deceptive paragraph from Eyman’s email, followed by our line-by-line refutation of it.
Gregoire’s first term involved explosive spending growth that was completely unsustainable: 34% spending increases. Her mountain of spending made the valley of deficits that much deeper. So by their crazy math, they claim they’ve cut spending $10 billion. And they believe the only ‘fair’ way to balance the budget is with 1/2 tax increases, 1/2 spending cuts. So that means $5 billion in tax hikes, not $500 million. If not for I-1053, they could take as much as they want and with an “emergency clause” slapped on, there’d be nothing the voters could do about it.
Let’s take this paragraph apart.
Claim #1: “Gregoire’s first term involved explosive spending growth that was completely unsustainable: 34% spending increases. Her mountain of spending made the valley of deficits that much deeper.”
False. Governor Chris Gregoire’s first term began on January 12th, 2005 and ended January 14th, 2009. During those four years, state and local expenditures per $1,000 of personal income actually fell. (This is the measurement economists use to compare our government’s finances from year to year).
According to the Office of Financial Management, state and local expenditures per $1,000 of personal income were $205.75 in 2004 – the year before Gregoire took office. In 2005, they declined slightly to $199.41, and they dropped again in 2006 to $196.41. Expenditures stayed constant in 2007 and then went up a smidgen in 2008. Here’s a table, which can also be seen on OFM’s website.
That page also has a chart showing that expenditures have been somewhat constant over the last two decades. There have been highs and lows, but no wild swings.
OFM’s data, by the way, is derived from the U.S. Census Bureau and the U.S. Bureau of Economic Analysis.
Claim #3: “[T]hey believe the only ‘fair’ way to balance the budget is with 1/2 tax increases, 1/2 spending cuts.”
False. We assume that “they” means Governor Gregoire and Democratic lawmakers (it’s not clear who else Eyman would be referring to). To our knowledge, neither Democratic legislative leaders nor any subset of the House and Senate Democratic caucuses have formally released a plan for addressing the latest budget shortfall, let alone a plan with a formula of “1/2 tax increases, 1/2 spending cuts.”
Governor Chris Gregoire, on the other hand, has released a plan for addressing the budget shortfall. If adopted as proposed, it would make $2 billion in cuts, raise $835 million in revenue, and leave $600 million in reserves. The $2 billion in proposed cuts is more than twice the amount of proposed new revenue.
The governor has repeatedly made it clear she does not want to make any more cuts to vital services, period. “I don’t want anyone to think that I like these options,” Gregoire said on October 27th, when she rolled out the first draft of her plan for dealing with the budget shortfall (which did not include any revenue increases).
Contrary to what Eyman implied in his email today, Gregoire has not used the word “fair” to describe her more recent, amended proposal, which calls for some revenue to cancel out devastating cuts. That’s probably because she recognizes that there is nothing that’s fair about the situation we’re in as a state, and nothing fair about a response that is mostly oriented around counterproductive austerity measures (which is a kinder way of saying evisceration of vital public services that people rely on).
What the governor did say is this: “After three years of cutting, now is the time to invest in a better future for all Washingtonians… I believe Washingtonians will stand with me. I believe they are tired of tearing down the services our parents and grandparents built — services that reflect the special values of Washington State.”
Claim #4: So that means $5 billion in tax hikes, not $500 million.
False. The governor has proposed increasing the state sales tax from 6.5% to 7%. The increase would be temporary, expiring on July 1st, 2015. The increase would go into effect on July 1st, 2012, and is projected to bring in $494 million through June 30th, 2013. If it brought in a similar amount in the two subsequent years it remained in effect, then the total raised would amount to approximately $1.5 billion.
The governor is also asking the Legislature to approve $341 million in additional revenue alternatives, some of which are temporary. If all of them were approved, that would bring the total raised through June 30th, 2013, to $835 million.
The Office of Financial Management has not estimated how much revenue the governor’s plan would bring in through July 1st, 2015. But even if we assumed that the governor’s plan would increase state revenue by $835 million per year beginning July 1st, 2012, and ending July 1st, 2015, that’s still only $2.5 billion… not $5 billion.
Claim #5: If not for I-1053, they could take as much as they want and with an “emergency clause” slapped on, there’d be nothing the voters could do about it.
False. Voters have the power to fire the entire House of Representatives and half the Senate every two years. If we the people of Washington don’t like the decisions our lawmakers make, we can vote our lawmakers out of office. That’s what representative democracy is all about. (Every Washington voter, Tim Eyman included, is represented by two state representatives and one state senator).
Furthermore, as the American Beverage Association proved last year with Initiative 1107, it is possible to force a public vote on a revenue increase even if the emergency clause is invoked. That’s because, although a bill with the emergency clause attached cannot be subject to referendum, it can still be repealed by initiative.
During the 2010 legislative session, lawmakers voted to slightly raise taxes on soda. The ABA (which is mostly funded and controlled by The Coca-Cola Company, PepsiCo, and Dr Pepper Snapple Group) responded by dumping $16 million into I-1107, a statewide initiative which was approved at the November 2010 general election. I-1107 rescinded the tax increase on soda, the tax increase on candy, and put back into place an unfair tax exemption the Legislature had repealed.