The Seattle Times doesn’t much like the rabble calling bullshit on one of their editorials:
Legislators, a local think-tank intellectual and an Internet fulminator all declared we were flat wrong about SB 5498, and that it did not silently transform anything.
By “Internet fulminator” the Times is of course referring to me, and while I wouldn’t mind being derided as an “intellectual” once in a while, if this is the type of fulmination it takes to coax the Times into engaging in a higher level of discourse on complicated issues of tax policy, well then, fulminate I must.
The Times stands by its take on SB 5498, and I stand by mine. At issue is a vaguely worded memo by a midlevel Department of Revenue staffer that seems to interpret one provision of the bill contrary to the stated legislative intent. The Attorney General’s office has been asked to review the DOR memo, and that is the opinion that will ultimately count. But my dismay with the Times original editorial extends far beyond dueling interpretations of a couple paragraphs of obscure legalese.
Coming just days before a handful of crucial levy votes, the Times original editorial was irresponsible in both tone and timing, attempting to speak authoritatively on an issue that was far from settled and on which they apparently lacked much authority. The Times’ efforts to impugn the motives of legislators were unfounded and uncalled for, its discussion of levy lid lifts muddled and contradictory, and its alarmist headline, “Warning: New taxes will be permanent,” was flat out wrong, regardless of the AG’s pending interpretation. A temporary lid lift raises both levy capacity and taxes; even if the new law makes capacity increases permanent — and the legislators who wrote the law continue to maintain that it does not — the tax increase itself would still expire at the end of the levy. District officials (councilmembers, commissioners, etc) could vote to increase regular levies to the limit of the new capacity, but they would be held accountable to voters for any perceived abuse of their taxing authority.
While I applaud the Times for following my lead and presenting a more in-depth discussion of lid lift basics in their new editorial, they still fail to make an adequate distinction between increasing statutory levy capacity and actually raising taxes, and they totally avoid a conversation about permanent versus temporary lid lifts. And perhaps most importantly, they refuse to address the issue that creates the need for frequent lid lifts in the first place, the totally inadequate and arbitrary 1-percent limit on revenue growth… well below inflation let alone growth in demand for government services.
… the law needs to be restored to what it was. In passing Initiative 747, the voters of Washington imposed a 1 percent limit per year on how much a taxing district can increase its gross collections from existing properties.
I-747’s 1-percent limit was vindictive and unsustainable, and a responsible editorial page would point this out instead of sticking to the meme that initiatives to the people, no matter how stupid, are somehow inviolate. The state constitution does indeed grant special status to initiatives, protecting them from being overturned by an act of the Legislature for a period of two years. But once that two years is up an initiative is the same as any other law — and the only thing more irresponsible than a dumb-ass (and possibly unconstitutional) initiative designed to cripple the ability of local governments to function, would be a timid Legislature refusing to address the problems it created out of fear of an editorial backlash.
So…..what does it feel like to fulminate?
Are you in danger of being busted for it in an airport?
I think the TIMES is just supperating again.
I’d add that propositions to the people are even more subject to abuse than initiatives to the people.
Propositions from governments are drafted by government lawyers to be completely one-sided. For example, the ST2/RTID proposition this November was drafted so that there would be no taxpayer-protection provisions. No provisions cap how much tax ST could collect overall, no provisions would limit how much tax revenue ST could spend, no provisions limit how much long term debt ST could sell, and no provisions mandate any sunsetting or reduction of the tax rates by any date certain.
Irrespective of how one might feel about the efficacy of pumping untold scores of billions into a few dozen more miles of light rail, the complete absence of ANY reasonable limitations to protect taxpayers from inept or profligate spending is reason enough to vote no on this particular one-sided proposition.
The root of the proble lies in who does the actual drafting. Eyman hired lawyers to draft his initiatives, and governments hire lawyers to draft their propositions. When you have ballot measures relating to taxes BY DEFINITION the public’s interest is not being represented by what is on the ballot. Taxing laws should (increasing them and decreasing them) should be the handiwork of those accountable to the public – NOT lawyers bound to further only their clients’ narrow interests. That applies to both the statists (with their propositions) and the anti-taxers (with their initiatives).
Goldy, actually the constitution allows the Legislature to revise or repeal an initiative at any time. It is just during the first two years after passage, it takes a two-thirds majority to do so. After two years, a simple majority can amend or repeal an initiative. This is another example of the wisdom of the framers of Washington’s constitution. There are states, like Arizona, where initiatives can only be amended or repealed by later initiatives. Yuck.
Like all Republicans, the conservative-biased Fairview media can’t admit they made a mistake.
“The Attorney General’s office has been asked to review the DOR memo, and that is the opinion that will ultimately count.”
Actually, Goldy … no. While AGO opinions carry persuasive weight, unlike appellate court decisions, they are neither precedential nor binding.
“… the law needs to be restored to what it was. In passing Initiative 747, the voters of Washington imposed a 1 percent limit per year on how much a taxing district can increase its gross collections from existing properties.”
Say, Goldy, weren’t you the guy who, not so long ago, was calling for more inflation to make things easier for folks who owe mortgages? Isn’t there an inconsistency between wanting, on the one hand, devaluation of mortgage debt, and on the other hand, higher property taxes?
Most growth in government services results in population growth, and the 1 percent lid on raising taxes on existing properties doesn’t keep government from collecting taxes from new properties built to house new population. So, it’s not accurate to suggest that government must deal with inflation AND population growth within the 1-percent lid.
Voters enacted I-747 to protect themselves from tax increases that might imperil their ability to keep their homes. Unlike sales taxes, or the rental car and restaurant taxes that pay for sports palaces, or tobacco taxes, you can’t get out of paying property taxes by ratcheting back your discretionary income if those taxes outrun your means. You’re simply screwed — and for some taxpayers, especially senior citizens on fixed incomes, this can mean being forced to choose between shelter and medical care, or shelter and food. I-747 is popular with voters because it involves an issue that kicks people in the guts.
Don’t get me wrong, I’m not saying the 1 percent lid is the nes plus ultra solution to our state’s problems in distributing necessary tax burdens. But property taxes are qualitatively different from other taxes; they’re not tied to income or discretionary spending, and they’re a tax on a basic necessity. Given the free-spending ways of some politicians (e.g., Ron Sims and Pat Davis), an unlimited ability of local taxing districts to tax people’s homes understandably provokes fear in the populace.
Instead of playing around the margins, expending our energy debating whether we should make a regressive tax slightly more or slightly less onerous, we ought to be focusing on ways to scrap our whole Rube Goldberg tax contraption for a fairer, more adequate, and rational tax system. I-747 and the arcane debates swirling around it are merely a sideshow.
correction
Most growth in government services results from population growth
correction
by ratcheting back your discretionary spending
Checking my personal records, I see that since 1990 the market value of my burrow has increased about 220% but property taxes have increased about 280%.
Wait a minute, that math doesn’t look right. Let me try this again. The market value of my burrow has increased aboutg 120% and property taxes have increased about 180%.
My burrow has slightly more than doubled in value over the last 17 years, while property taxes are more than 2 1/2 times what they were back then.
JCH is a Nazi.
@6 – for the poor in our community, sales taxes are not discretionary like tobacco taxes or restraunt taxes. Sales taxes imposed on light bulbs, kids shoes, toothpaste and soap literally mean less food on the table.
Take a look at how regressive sales taxes are – they hit those who can least afford them by far the hardest. And we pay nearly the highest sales tax rate in the country already.
The last thing we need is the massive increase in sales taxes that RTID/ST2 would mean.
@13 Yeah, why should we have to pay for maintenance and improvements to our infrastructure. Isn’t it enough that between 60%-80% of our taxes goes to incarcerating people when a decade ago it was 40%-60% and a decade before that it was 30%-40%. Everyone knows that Seattle’s infrastructure is perfect and self-sustaining. We don’t need to spend any money on it whatsoever.
Everyone knows that and that Roger Rabbit is actually the Easter Bunny, and Global Warming is not happening, and President George Bush cares about the Constitution.
@ 14 – Nobody is disagreeing with you – more money to maintain and build out infrastructure, including bus service is needed.
The question is whose pocket the money should come from.
You seem to be pushing for even more sales taxes. I’m not. I’d raise the needed revenue more progressively, via variable-priced tolls at key locations, increased gas taxes, taxes on employers, a mileage-based tax on vehicle owners, taxes on dividend income, taxes on inherited wealth, and corporate and individual income taxes. The fact that NONE of those revenue sources were requested by ST or RTID, and the fact that the legislature did not authorize those sources of revenue for ST or RTID, shows that our government “servants” truly don’t care about doing the right thing. And yes I know the constitution would need to be amended for there to be income taxes – that isn’t the point of this post.
Your approach – acting oblivious to who is taxed – is part of how we got into this mess.
Now, do you really think the taxing proposal that RTID and ST want is the best for the region?
@15:
…or maybe that shows that an income tax is the third rail in Washington politics. It wasn’t all that long ago (
@13 I will vote no on RTID/ST2. One big reason is because it provides only partial funding for 520 bridge replacement, which means transportation dreamers will come back to tap into our pockets again later. Another big reason is because the 520 project is gold plated, and many of this community’s taxpayers can’t afford gold platers. Why does this bridge, which is built of concrete pontoons (a cheap material), has no steel towers or suspension cables, and is only 1 1/2 times as long as the new Narrows bridge, cost 5 times as much as the new Narrows bridge? How can you spend $550,000 per lineal foot on a concrete pontoon bridge? Someone is getting rich from this.
@13 In other words, that big sales tax increase in RTID/ST2 is the beginning, not the end, of big tax increases for transportation projects.
The transportation lobby ultimately wants to spend $100 billion on Puget Sound area projects. If they get their way, that’s more than $100,000 per household. Voting for this stuff is the same thing as adding 100 grand to your mortgage balance.
Meanwhile, other folks are telling us we’ll “have to” spend $50 billion or more on Puget Sound recovery. They use that rhetoric because they want us to think we have no choice. Add another 50 grand to your household debt balance. Or, alternatively, think in terms of monthly sewer bills that look like a property tax statement.
Yes, some people in this area are rich, and can afford those taxes. But not everyone can. And the dreamers don’t seem to give a damn about those who can’t.
What we need to do is get bureaucrats and politicans to think about money the way us mere mortals have to think about money: We figure out what we can afford, then we prioritize, and pay for the most essential things and do without some less essential things.
For example, replacing the 520 bridge is essential, but adding 2 more lanes to 520 is an unaffordable luxury. Saving Puget Sound for the whales is a nice idea for sentimentalists, but the intelligent way is to improve, for example, the way we handle storm runoff when you have to replace aging sewer systems anyway.
And, oh yeah, I forgot to mention that Seattle’s century-old water and sewer systems are falling apart and will have to be replaced within the foreseeable future, and that’s more billions or tens of billions of infrastructure spending. Think huge utility bills.
If we don’t put bureaucrats and politicians on a diet, their appetite for spending could ultimately cost Puget Sound households as much as the Iraq war. The dream factories might even figure out how to spend a TRILLION DOLLARS of our money if we give them a free hand. What is needed here is a strong dose of adult supervision which so far has been lacking.
@15 The problem with ideas like taxing employers, inheritances, etc., is that unless these taxes are uniform across the country, they encourage businesses and individuals to flee to tax-friendlier locales. That’s what Tom Stewart is doing; after spending decades reaping the financial benefits of residing in a no-income-tax state, he’s yanking up his tent pegs and moving to Arizona so he doesn’t have to pay inheritance taxes either. Stewart is our state’s ultimate freeloader. (It’s not that he’s a tightwad; he’s given lots of money to Republican candidates and causes — he simply has different priorities. Implementing the principles of the John Birch Society is, for him, more important than sewers, schools, or drinking water. But I digress.)
The problem with taxing employers is they either (a) take it out of employee compensation or (b) relocate. The problem with raising estate taxes is that money (and legal domicle), as Stewart is demonstrating, is portable.
I like some of the rest of your ideas, such as selective tolls and mileage taxes. For example, I own an old pickup that I use once or twice a year to haul yard waste. What RTID will do is make me pay a couple hundred dollars a year to license a vehicle I drive less than 10 miles a year in order to help Bellevue commuters get to their Seattle jobs. Nope, I won’t voluntarily do that to myself, and if RTID passes I’m going to get rid of that vehicle and sneak the yard waste into the household trash in little pieces. Not the best use of limited landfill space, but I can’t afford to pay $200 per pickup load to dispose of twigs and fir cones.
To sum up, I’m very frustrated with people who want to spend my food money on things I don’t need and won’t use. The number of commuting miles I drive each year is zero. The amount of inflation adjustment I get in my pension check each year is zero. Every time the big spenders raise my taxes, they’re ripping another clump of fur out of my hide. I can’t make that up anywhere; I have no boss to go to for raises, no ability to work harder to make more money to pay higher taxes. So why would I vote to tax myself for commuter trains or gold-plated bridges? I wish I could be more community-spirited, but I’m already community-spirited to the tune of a substantial percentage of my modest income, and there’s only so much community spirit I can afford.
Which points out another big reason why I’m voting against RTID/ST2: Not only is does it mislead people about what the real tax increase is, in that it starts projects that additional tax increases will be needed to finish, and not only are the projects too expensive and some of the priorities are wrong, but its distribution of the tax burden to pay for all this stuff stinks! Too much on senior citizens living on fixed incomes, not enough on user fees and charges, and way not enough allocated to those with ample ability to pay.
@17 “…or maybe that shows that an income tax is the third rail in Washington politics. It wasn’t all that long ago”
Yeah, an income tax was a viable legislative option about 60 or 70 years ago. After being defeated 3 times at the polls in the 50s and 60s, politicians understandably decided that supporting a state income tax had limited potential for advancing their careers.
However, I think it’s time to revisit the income tax question. Washington should reconfigure its tax structure to look like everyone else’s. We’ve had 100 years to figure out what works, what doesn’t, what’s fair, what isn’t, and roughly 45 states have adopted a standard model that includes a mix of income, sales, and property taxes. What Washington has is an ad hoc, piecemeal, jury-rigged tax system that was not rationally designed but rather was patched together through a helter-skelter series of legislative and initiative enactments spread over several decades that have resulted in those without political power (low income households) paying four times as much of their income in state and local taxes as those with political power (high income households). That’s wrong. It also is failing to meet the needs of our communities. We are left with a choice between unaffordable tax burdens on those who are taxed, or inadequate funding for schools and infrastructure. There is no reason we have to live with that Hobson’s choice. We should scrap our antiquated Rube Goldberg tax system and copy what has worked for 45 other states. This isn’t a leap into the unknown, it isn’t rocket science, all it requires is a collective will to exercise common sense.
I wouldn’t mind a few large employers leaving Washington. Thinning the herd of employers once in a while is not a bad thing.
@16:
Grr, stupid html formatting rules.
What I was saying was:
…or maybe that shows that an income tax is the third rail in Washington politics. It wasn’t all that long ago (less than 5 years?) that the subject came up again (it does so periodically) and was roundly shouted down by the populace. It even had Bill Gates Sr. throwing his considerable weight behind it and went absolutely nowhere.
As somebody once said, politics is the art of the possible and changing the tax structure in this state just isn’t.
Don’t get me wrong, I fully agree that an income tax is badly needed in this state and the current tax structure is incredibly stupid. It just ain’t gonna happen any time soon.
-OM
@20:
The thing is, Roger, that many of the services you depend on (and the employees who deliver them) DO use those resources. So whether or not you use them directly you sure-as-heck use them indirectly.
Believe me, I’m sympathetic to your gripes about projects that are wasteful (tunnel as viaduct replacement, anyone?) but “wasteful” is a somewhat subjective issue. There needs to be more East-West traffic capacity in the region (520 bridge). The projected population increase and global warming demand serious improvements to public transit.
You are in the unfortunate position of living somewhere that is growing like crazy and unfortunately, that costs — particularly for current residents.
-OM
David, I wondered why it took you so long to respond to that reference.
Also, did you read Nick Gillespie’s review of “The Argument” by Matt Bai in the Sunday Book Review of this past Sunday’s New York Times?
Roger, if you’re making the typical Eymanite talking point argument about new construction costs keeping property tax revenues afloat, you’re just wrong. Let me give you an example.
Way back in the 80’s, the area that is now the City of Sammamish was served by one fire station. It grew explosively. As a result, the fire district that covered that formerly unincorporated area opened up two new fire stations, one at the north end of the Sammamish Plateau, one near Klahanie. They funded the staff for those new fire stations with money that came in from new construction. This story has repeated itself all over the state, as local governments increase public safety staff and build new facilities with property tax revenues that come in from new construction.
Here’s the fallacy with the new construction revenue argument: if that area was forced to use new construction revenues to keep their existing public safety staffing in place, they would have one fire station covering the area, not the three that they now have. It would probably take about 30 minutes for a fire engine or aid car to arrive to certain calls, assuming they were available. There’s a very good reason that new construction is exempt from the property tax aggregate limits: because it creates huge new demands on government service that have to be addressed by building new facilities and adding new people.
Don’t pretend that everything will be okay because governments take in new revenues with new construction. That’s not a realistic argument.
@25 “You are in the unfortunate position of living somewhere that is growing like crazy and unfortunately, that costs — particularly for current residents.”
Listen, pal, us animals have been pushed out of our habitats on this continent for four centuries, and we ain’t taking it no more! We’re all urban wildlife now, and we’re going nowhere. And neither are you humans. YOU CANNOT BUILD YOUR WAY OUT OF TRAFFIC CONGESTION.
Trust me on this, when gas costs $10 a gallon, you aren’t going to need those extra 520 lanes.
someone above wrote: “The problem with taxing employers is they either (a) take it out of employee compensation or (b) relocate. The problem with raising estate taxes is that money (and legal domicle), as Stewart is demonstrating, is portable.”
Well, good riddance to Stewart – nobody cares if he lives full time somewhere else.
Having businesses pay more tax, as opposed to just more sales taxes, would be a great improvement. So what if there is a little less profit for shareholders? The delta would not be significant enough to cause companies to relocate to some gawdforesaken burg in fly-over country. It would not come out of employees pay – it would just mean less profit for the owners. They’ve gotten enough breaks from Bush – time for them to give back and pay some taxes for the transportation system that will benefit THEM.