With the backing of new donors, Tim Eyman is back with an initiative that would slash state sales taxes by more than $1 billion a year unless lawmakers put a tax-restricting constitutional amendment on the ballot.
Last year, Tim Eyman’s failure to qualify an anti-tax measure for the ballot had some wondering whether the controversial initiative sponsor was finished.
Some traditional Eyman benefactors had yanked their support after accusing him of siphoning their donations for an initiative they didn’t support. Without paid signature gatherers, his 2014 measure flopped.
But like it or not, Eyman is back.
Buoyed by new wealthy patrons, Eyman’s Initiative 1366 — which would punch a $1 billion a year hole in the state budget unless lawmakers refer a tax-limiting constitutional amendment to voters — looks well on its way to the November ballot.
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The latest Eyman campaign already has raised more than $1.1 million and spent $750,000 on paid signature gatherers. “We’re not there yet, but there does seem to be a lot of momentum,” said Eyman.
I-1366 would lower the state sales tax from 6.5 to 5.5 percent unless the Legislature places a constitutional amendment on the ballot by next April 15 requiring two-thirds legislative approval — or majority voter approval — for any tax increases.
Voters have endorsed that supermajority requirement several times in initiative votes. But the two-thirds rule was struck down as unconstitutional by the state Supreme Court in 2013.
Critics are likening Eyman’s latest effort to revive the supermajority rule to blackmail. They also argue I-1366 may be struck down by courts even if it passes, citing the state Supreme Court’s McCleary decision finding lawmakers in violation of their duty to amply fund public schools.
Enshrining the two-thirds restriction in the state constitution would freeze Washington’s current tax structure in place and give a minority of anti-tax lawmakers veto power, opponents argue.
“That seems like a pretty serious barrier to achieving full funding of basic education in the state,” said state Sen. Jamie Pedersen, D-Seattle, an attorney and one of the plaintiffs in the lawsuit that voided the two-thirds requirement. “Aside from the legal question, I think it’s just terrible policy.”
Donors’ deep pockets
But Eyman and supporters say you only need to look at what’s going on in Olympia these days to see why the initiative is needed. They point to Gov. Jay Inslee and Democrats in the Legislature proposing $1 billion or more in new taxes, despite the state having $3 billion in additional tax revenue coming in due to the rebounding economy.
The proposals, including a potential capital-gains tax on wealthy investors, appear to have motivated large donations from some new faces, as well as more traditional Eyman backers.
More than half the money raised by the I-1366 effort has come from seven donors. Clyde Holland, a Vancouver-based real-estate developer, is the largest contributor at $300,000.
Holland, who declined interview requests, is a new Eyman patron but has supported Republican candidates and recently hosted GOP presidential candidate Jeb Bush at a Seattle fundraiser.
Although Eyman is unpopular with most Seattle voters, I-1366 also has picked up big donations from two Seattle property mavens, Fremont’s Suzie Burke, who has given $47,000, and North Aurora’s Faye Garneau, who donated $50,000.
Both said they’re fed up with the Legislature’s desire to raise taxes and the hostility by lawmakers to the two-thirds requirement — despite its popularity with voters.
“They need to remember who’s the boss,” said Garneau. “When the people have spoken and said something, that means it’s not to be overrun by individuals in Olympia.”
Burke said it’s up to legislators to figure out how to live within the state’s means without new taxes. “That’s what we send them down there to do,” she said.
I-1366 also has received $100,000 from Bellevue developer Kemper Freeman, a longtime Eyman supporter.
Another $100,000 came from the Puget Sound chapter of the National Association of Electrical Contractors. The executive director of that group, Barry Sherman, said in an emailed statement the contractors have supported the two-thirds policy for over a decade “because it gives individuals and businesses predictability and stability, helping our economy thrive.”
As he’s done before, Eyman has borrowed $250,000 against his house to loan to the campaign.
Andrew Villeneuve, executive director of the Northwest Progressive Institute, said given the fundraising numbers, he and other Eyman foes are preparing for I-1366 to be on the ballot.
“Eyman is very good at convincing people to part with their money for really bad ideas,” he said.
Though he’s attracted new financial support, some business associations that funded past Eyman efforts are staying away for now.
Some of the groups say Eyman inappropriately used money they donated to past efforts to finance an initiative they did not support in 2013. That proposal, Initiative 517, sought to give signature gatherers more leeway in front of stores. It was overwhelmingly rejected by voters in 2013.
The Washington Food Industry Association donated to Eyman initiatives in 2010 and 2012. But Jan Gee, president of the grocery-store group, said, “At this time we have a policy not to give any money that would go to Tim Eyman’s financial handling.”
The state Public Disclosure Commission has been investigating whether Eyman violated campaign laws during the I-517 campaign. Gee said her group and others have been frustrated with the slow pace of that probe.
The Association of Washington Business, which has spent big on prior Eyman anti-tax initiatives, also has stayed away so far. AWB spokesman Jason Hagey said the group has not yet decided whether to support the measure.
To qualify for the November ballot, I-1366 needs to gather 246,372 valid signatures from registered Washington voters by July 2. If it makes the ballot and passes, the initiative is sure to face legal challenges.
Hugh Spitzer, who teaches constitutional law at the University of Washington, said the state constitution makes quite clear that the power to place constitutional amendments on the ballot rests solely with the Legislature. Courts may view I-1366’s effort to strong-arm lawmakers as a violation of that.
“As usual, there may be a constitutional defect in this proposal,” Spitzer said. But, he said, Eyman has proved over the years “he doesn’t care” whether his measures are struck down by courts. “He wants to get the Legislature’s attention.”
Eyman said the public has shown its appetite for the supermajority requirement on taxes and deserves a constitutional amendment vote.
“It seems like the voters have earned the right to finally make the final decision,” he said.