HorsesAss.Org

The Institute on Taxation and Economic Policy, a DC based nonpartisan research group, has recently released an analysis: “The Impact of the Ron Sims Tax Plan on Washington Tax Fairness“.

Known for their tax simulation model, ITEP reports that under the Sims plan, Washington would move from having the most unfair tax system in the nation to having the least unfair tax system… all while saving state taxpayers $1.25 billion annually in total federal, state, and local taxes.

Not bad, huh?

Thanks Tim!

I was scrounging around the dailies looking for something to blog on this morning when Tim Eyman graciously dropped a gift in my inbox. In a fundraising email CC’d to the media, Timmy once again attacks the state Department of Revenue for having the gall to release statistics during an election year.

Tim’s media strategy is very simple. He routinely emails the press — sometimes as often as two or three times a week — pushing his own “statistics” and “analysis.” With no year-round opposition to refute his arguments (at least, not until now), his unsupported claims eventually seep into the public debate on the strength of sheer repetition.

This morning’s email is a great example, as it repeats several familiar Eymanisms. But a little investigation makes it easy to pick apart.

Washington is the 7th highest taxed state in the nation (www.taxfoundation.org) but our state’s Department of Revenue says our tax burden ain’t that bad. Gimme a break.

As I’ve stated many times, DOR estimates based on US Census Bureau data show that Washington’s state and local tax burden — that’s taxes paid as a percentage of income — ranked us 32nd in 2002… well below the national average.

So are we 7th or 32nd? Well Tim cites TaxFoundation.org, so let’s go there and see where the discrepancy comes from. Ooops… according to the very first blurb at the top of WA’s page, we rank 21st nationally in state and local tax burden.

(Scroll down the page further, and you’ll see that our local property taxes rank us 35th per capita, and 41st as a percentage of personal income. I wonder why Tim hasn’t cited those stats in support of his property tax cutting measures?)

So where does Tim’s 7th ranking come from? Well, he’s using TaxFoundation.org’s ranking of total federal, state and local tax burden. So, isn’t that meaningful?

No.

TaxFoundation.org’s own charts show that WA also ranks 7th for federal tax burden. The fact that adding state and local tax burden doesn’t move the total ranking, merely shows that our state and local burden is near the national average (actually, slightly below it, even according to TaxFoundation.org.)

Washington ranks high nationally in federal tax burden because Washington is a wealthy state, with some very high incomes that skew the state average. To add federal tax burden to state and local tax burden makes national rankings of state and local tax burden meaningless.

In fact, the very notion of “ranking” can be misleading.

For example, let’s go back to 2002, the last year for which data is available from both TaxFoundation.org and the DOR. In 2002, the DOR ranks Washington 32nd nationally with 10.09% state and local tax burden. For the same year, TaxFoundation.org ranks Washington 13th nationally, with a 10.4% burden.

13th or 32nd… that’s a huge difference, right?

Not really.

According to the DOR, the difference in tax burden between top ranked New York and 6th ranked Rhode Island is equal to the difference between Rhode Island and 39th ranked Missouri! TaxFoundation.org reports similar comparative results — the difference between NY and RI (now ranked 5th) is equal to the spread between RI and 32nd ranked Montana.

In both studies, 36 states were within 1% of the national average. Thus a couple tenths of a percent shift in tax burden can result in a dramatic shift in national ranking, with relatively little real impact.

And one final comment on the discrepancy between TaxFoundation.org and DOR numbers. As I read it, TaxFoundation.org calculates WA’s tax burden as higher because it adds in over $1 billion in taxes imported into the state. This looks to me like an argument for a state income tax.

On to the rest of the email:

They say that tax bills went up 4.2% which means they’re lower. Huh? Only politicians and bureaucrats using government double-speak can make an increase into a decrease. It just shows that there’s an election in November that will again decide the direction of taxation in our state — and the government is weighing in.

That’s just plain silly.

What the DOR reported was that tax revenues grew 4.2% from 2000 to 2002, but during the same period, average personal income grew 10%. Tax experts will tell you that the best measure of growth in demand for public services is growth in personal income, which encompasses growth in population, inflation and earnings.

Tax revenues — and thus expenditures — are clearly growing slower than demand for government services. In fact, they’re barely keeping up with inflation.

I-892’s revenue-neutral $400 million property tax reduction, I-884’s $1 billion sales tax increase, and Ron Sims’ massive tax increase by adding a state income tax — the outcomes of these voter decisions will determine the trajectory of taxes for years to come.

First, I-892 is not revenue neutral. The Office of Financial Management recently released a fiscal impact study on I-892, estimating that the state general fund will lose $30 million a year in lottery revenues alone in 2008, and that local governments will lose an additional $8.4 million in taxes on other forms of gambling. And these figures don’t even begin to take into account loses to other taxable business activities.

Second, Tim has long touted his $400 million tax reduction figure without providing any documentation to back it up. The OFM estimates 2008 tax savings at $252 million, based on $112 in revenues per slot machine per day. Under I-892 we could saturate the market with over 36,000 slot machines statewide. By comparison, other saturated markets, like Las Vegas, see daily net revenues of only $88 per day on average.

And finally, Tim is just plain lying when he says that Ron Sims’ proposed tax reform plan would be a “massive tax increase by adding a state income tax.” It doesn’t “add” a state income tax, it replaces the state sales tax and B&O tax. And it results in a net reduction in total state, local and federal tax burden… the tax burden measure Tim is always so quick to tout.

I’ve already gone on too long, so I won’t bother refuting the rest of Tim’s rhetoric. Needless to say, nothing Tim says can be taken at face value.

Yesterday I briefly blogged on the spate of news stories surrounding a DOR study that shows state and local tax burden at the lowest point since 1981.

This is deceptive.

Eliminate the anomalous 1981 dip, and tax burden is actually near a forty-year low.

This can clearly be seen in a preliminary study I posted to TaxSanity.org last month, “The truth about property taxes in Washington State“. The study uses state and federal historical data to show that state and local tax burden has not only remained quite stable over the past 20 years, but is well below national averages and historic highs.

As you’d expect, initiative profiteer Tim Eyman scoffs at the DOR study. According to the AP story he “denounced it as an election-year tactic to reduce support for his measures.”

Yeah Tim… God forbid voters decide an election based on the facts.

So, is Washington a high tax state as Timmy persistently claims? Well, it all depends on who you are, and how much you earn. While Washington ranks 32nd nationally for average state and local tax burden, our tax system is the undisputed champion of regressivity.

If you earn $20,000 a year you live in the highest taxed state in the union, but if you earn $200,000 a year you live in one of the lowest.

And that is exactly the kind of structural unfairness that Tim’s across-the-board tax cuts have exacerbated… and that Ron Sims proposes to fix with his bold new tax plan.

I’ll blog on this in more detail later in the day, but I just wanted to quickly point readers towards the flood of articles on a DOR report that state and local tax burden is at its lowest point since 1981.

It all started with an article yesterday in the Spokane Spokesman-Review by their excellent Capitol reporter, Rich Roesler. That was followed up by an AP story, printed in the Seattle Times and elsewhere, and spurring an even more thorough article in the Seattle P-I.

Finally, Joe Turner in the Tacoma News Tribune adds to the story by reporting on an OFM report that analyzes the impact of I-892: “Eyman oversells tax relief, state says“.

More later.

After giving the first whack to RNC hatchetgal Collin Levey, the Seattle Times today officially joined the scrum over disappointing test scores at charter schools. [The debunking politics of charter schools]

The results of the National Assessment of Educational Progress report add nothing to the debate on charter schools.

Yeah… especially if you don’t report it.

In case you get all your “news” from the Seattle Times, (and thus have no idea what we’re talking about,) the NY Times broke a story earlier this weekly (quickly picked up by the Seattle P-I and Tacoma News Tribune) that Education Department statistics show fourth graders at charter schools lag half a year behind similar students at traditional public schools.

Of course, keeping your readers ignorant makes it so much easier to refute the study in an editorial. For example, the Seattle Times attempts to discount the results as being an unfair comparison:

Charter schools are concentrated in urban, often poor, areas. Many students were unsuccessful in the public schools. After years of being academically behind, they are now playing catch-up. Yet, the study compares their achievement with their public-school counterparts. It is an unfair, premature comparison.

But the study was careful to compare rotten apples to rotten apples. As the NY Times noted, “in almost every racial, economic and geographic category, fourth graders attending charter schools are outperformed by their peers in traditional public schools.”

On average, charter school students are performing worse than students at the schools they transfered out of. But to defend their long standing support of charter schools, the Seattle times flips the analysis on its head:

Pronouncements regarding their academic performance are more telling about the schools the children came from than about the charter schools they’re in.

Oh please…!

Still, much of the Seattle Times editorial is measured, even reasonable. Of course there may be extenuating circumstances that influenced the test results, and of course it is too early in the charter school experiment to judge it one way or the other.

But proponents of charter schools have loudly touted them as a superior, free market alternative — offering nothing but anecdotes to back up their claims — so I must disagree with the Seattle Times editorial board. National test results showing charter school students lagging behind does add something very important to the national and local debate: a dose of reality.

Washington voters have wisely chosen a cautious approach to charter schools, and I expect they’ll do so again this November by rejecting R-55.

Surprise, surprise.

After months of watching Ron Sims get rave reviews for his bold tax reform plan (and I strongly suspect, watching her lead over Sims steadily shrink in her own internal polls), Christine Gregoire is finally starting to warm up to the idea.

The Seattle P-I reported today that Gregoire softened her stance on tax reform during an endorsement interview, apparently backtracking on her earlier statement that an income tax would be “dead on arrival”.

Gregoire said yesterday that officials should start a “discussion” about creating an income tax, “reform” business taxes and persuade voters that the recent 5-cent gas tax increase is not enough to “get the job done.”

The income tax has long been considered “the third rail” of Washington politics (a curious metaphor for our rail-challenged state.) But rather than electrocuting Sims, the issue has clearly recharged his campaign.

And now Gregoire seems to be looking towards tax reform for a jolt in the polls too.

Two days late, the Seattle Times finally mentions the blockbuster national study that charter school students lag a half year behind those in traditional public schools.

Surprisingly, it’s in a column by Collin Levy. Not surprisingly, the column is an ideological screed that contorts itself into an attack on John Kerry, while failing once again to include the tiniest shred of local context. [Big picture doesn’t justify charter-school foes’ glee]

(Question: does Collin even read the Seattle Times? Is she aware that voters are being asked to approve or reject R-55 this November, authorizing charter schools? At this point I can only assume that the Times’ goal is to syndicate Collin nationally, explaining her meticulous efforts to avoid any taint of local consciousness. Anyway…)

While her column benefits from a coherency that has been lacking in recent weeks (perhaps Collin’s taken my constructive criticism to heart,) it includes the usual invective and exaggeration, cartoonishly demonizing those at odds with right wing doctrine:

Not since the golden age of “Looney Tunes” has bad news been met with such hand-rubbing glee.

That’s right Collin, we’re all just tickled pink that hundreds of thousands of children are getting a sub-standard education. Who cares about children, as long as it works to our political advantage, right?

Such opponents may often gasp that the charter-school program is a devious plot by the GOP to rid the world of public education, but their calculation is simple politics. The unions’ positions on merit pay (no) and seniority (yes) badly warps the educational landscape. And, as is true with most such entrenched operations, they are motivated by the interests of their members, not the interests of their students.

I always find it amazing when critics attack the motivations of teachers, many of whom have passed up the opportunity of better paying careers so they could educate our children. Vassar offers a BA in Education, so Collin, like many of her classmates, could have chosen that profession. She did not.

But blaming teachers unions for failing schools is a convenient way of diverting attention away from the fact that charter schools are indeed “a devious plot by the GOP to rid the world of public education”… at least to some of the more cynical and/or ideological members of the GOP.

Unlike Collin, I’m not going to demonize the other side by suggesting that they want to harm our children. It’s just that they are so ideologically driven — so convinced that they see the invisible hand of God in free markets — that they believe the outcome will be for the best… whatever the result.

That is the dark, Social Darwinian side to applying free market ideology to public education. Some schools will survive, some will close. Some children will thrive, others will not. But if you believe that free markets are always the most efficient means of allocating resources, then a free market driven educational system will be the best educational system possible… even if it fails to adequately educate the majority of children.

Of course some of the support for charter schools is more cynical. It all comes down to money.

The standard fig leaf of Democrats attempting to navigate between parental expectations and union demands is in play here, too. Democrats say they support accountability but criticize the Bush administration for failing adequately to “fund” the law. In other words, the educrats always turn it into a demand for more money.

That’s absolutely right, for the core difference between Democrats and Republicans on education, is that Democrats believe we are underinvesting in our children’s future. Democrats want to spend more money on education. Republicans do not.

Collin and her RNC overseers try to dismiss test scores and rely instead on isolated anecdotes to defend the performance of charter schools, but the more interesting question is “why?” Why has the Bush administration made charter schools a central provision of the No Child Left Behind Act?

Because it is education reform on the cheap.

I’ll say it again: you get what you pay for. On their own — without a commitment to adequate funding — charter schools are educational alchemy. A vote for R-55 is fools gold.

Have I ever mentioned that Tim Eyman is a lying, thieving, blowhard?

In an fundraising email cc’d to the media today, Tim calls attention to the “additional $1.8 million” in contributions reported by the No on I-892 campaign this week. He goes on to write:

This is IN ADDITION TO the massive amount already raised by the tribes
(Thursday, 8/12/2004, REBECCA COOK, Associated Press Writer. The most recent campaign finance reports show that I-892 opponents have raised more than $3 million as of July 31. Supporters of the initiative have raised only $619,000, though that report was filed at the end of June.).

If you were naive (or stupid) you would believe that the No campaign has raised over $4.8 million. The truth is, they’ve raised exactly $3,020,043.18.

Why the discrepancy? What Timmy cleverly (and intentionally) did was use the No campaign’s latest C3 report, but ignore it’s amended C4 report.

For those who don’t understand PDC nomenclature… the AP story Tim cites is simply wrong… and he knows it. And if he manages to trick a reporter into printing his implied $4.8 million figure, he’ll cite that in another lying email.

Tim Eyman is pathologically dishonest, a moral defect he shameless exploits to his own rhetorical advantage.

In an editorial last week, The Seattle Times talked up the need for media diversity. Well this week they demonstrated it by ignoring the breaking story about our nation’s failing charter schools.

Yesterday the NY Times reported that “in almost every racial, economic and geographic category, fourth graders attending charter schools are outperformed by their peers in traditional public schools.” [Nation’s Charter Schools Lagging Behind, U.S. Test Scores Reveal]

This is a huge story… front page, above the fold in the NY Times. Over 600,000 children already attend charter schools, and the number is expected to grow dramatically under President Bush’s ironically named “No Child Left Behind” Act. No wonder this story was featured prominently in newspapers and media broadcasts nationwide.

But The Seattle Times? Nada. Not a mention. Not a word. Zilch.

The Seattle P-I and Tacoma News Tribune managed to squeeze the story into their pages yesterday. But The Times couldn’t be bothered… despite the fact that Referendum 55 — authorizing charter schools — will be on the Washington state ballot this November.

Or perhaps the Times didn’t cover the story because R-55 is on the ballot, and it would undermine their previously stated support for charter schools? In a June 11 editorial the Times called opposition to charter schools “an enormous waste of time,” lamenting that R-55 delays implementation past the start of the new school year.

Reasonable voters will see the state’s modest new charter-school law for what it is: one creative way to give some of our neediest students a top-notch education.

Knowing that fourth graders in charter schools lag half a year behind those in traditional public schools, “reasonable voters” might choose to err on the side of caution. And it is the responsibility of our region’s largest and most influential newspaper to give voters this information.

I’m not suggesting that the Times’ editors conspired to keep this story out of print, so as to protect their own political agenda. But every news outlet has its own editorial bias, and it surely influences decisions on which stories to run.

All the more reason why Seattle should remain a two-newspaper town.

From the LA Times:

California’s largest charter school operator has shut down at least 60 campuses amid new state restrictions and an investigation into financial and academic practices — leaving nearly 10,000 students to find new schools just a few weeks before the new semester begins.

I guess that’s the free market at work.

Washington voters have repeatedly rejected ballot measures approving charter schools, and we’ll have another opportunity this November by voting “No” on Referendum 55.

Rather than supporting adequate funding (and the taxes to support it) charter school proponents argue that subjecting public schools to free market competition is the only way to improve education. But according to an article in the NY Times, this national experiment with our children’s future hasn’t been going so well: “Nation’s Charter Schools Lagging Behind, U.S. Test Scores Reveal“.

The findings, buried in data quietly released by the US Department of Education, showed that fourth graders in charter schools lagged about half a year behind similar students in other public schools in both reading and math.

Put another way, only 25 percent of the fourth graders attending charters were proficient in reading and math, against 30 percent who were proficient in reading, and 32 percent in math, at traditional public schools.

Personally, I’ve got nothing against charter schools in theory, but in practice they’re really just a union-busting effort to defund traditional public schools.

And at the risk of being branded a Marxist, I’d just like to suggest the unpopular notion that perhaps the “free market” is not always the best and most efficient means of allocating resources. After all, if competition is such a magic elixir, why is it that successful companies like Microsoft are always striving to squash it?

The truth is, a lot of the appeal of charter schools is that it promises taxpayers something for nothing… it says we can improve public education without spending more money, if only we let the free market work its magic.

But it ignores one of the basic rules of free markets: you don’t get something for nothing. That’s something the 600,000 students in charter schools are learning the hard way.

(For more information on R-55, go to ProtectOurPublicSchools.org)

The other day I laid into professional prevaricator Tim Eyman for claiming a Snohomish County judge had ordered the original I-18 language back on the ballot, when in reality, all the judge did was set an August 24 hearing date. Surely Tim’s lawyers had explained the judge’s ruling, but that didn’t stop him from hyping this “huge legal victory” to potential contributors.

Well if you have any doubts that Tim Eyman is an incorrigible liar, his latest email should put them to rest.

In a press-release-cum-fundraising-email sent this morning to supporters and the media, Tim perpetuates his lie, and backs it up by deceitfully appending an erroneous version of a Seattle P-I article that has since been corrected.

Here is the opening paragraph of the article as it appears in Tim’s email:

A Snohomish County judge yesterday ordered that the original language of a ballot initiative that would reduce the size of the King County Council from 13 to nine members stand, reversing the effect of a recent vote by the council to delay the measure if passed.

And here is the opening paragraph of the actual P-I article as it currently appears online:

A Snohomish County Superior Court judge yesterday ordered set an Aug. 24 hearing date for a judge to consider whether the original language of an initiative to reduce the size of the King County Council from 13 to nine should be on the November ballot.

I’ve never understood why news publications continue to look the other way at Tim’s habit of violating their copyright by reprinting articles without permission, for commercial purposes. (And you can’t get much more commercial than a fundraising email for Tim’s personal compensation PAC.) But if protecting their intellectual property isn’t compelling enough, perhaps protecting their integrity is… for this isn’t the first time Tim has knowingly reprinted the wrong draft of an article or column.

On Feb. 6 Tim sent an email to supporters allegedly reprinting a column he had published in the Tacoma News Tribune. Problem was, it wasn’t actually the column the TNT printed on Jan. 18, but rather an earlier, much different draft that the TNT’s editors had forced him to extensively rewrite.

So let this be a lesson to my friends in the media: Tim doesn’t just lie to you, he uses you to repeat his lies to your colleagues and the public. He has complete and utter disregard for the press in general, and you personally. Thus nothing, absolutely nothing he says or writes should be taken at face value.

Even his alleged news clippings.

I cringed when I saw the headline of today’s editorial in the Seattle Times, “Sims’ tax plan: bold but impractical.”

The Times has been consistently ardent in their opposition to a state income tax, to the point of belittling William Gates Sr. in a Bruce Ramsey column last December (“The joys of not having a state income tax.”) Gates found it appalling that Washington had the most regressive tax structure in the nation, a sentiment Ramsey pooh-poohed, suggesting our regressive tax system is necessary “to offset the unfairly progressive federal income tax.”

So in the context of the editorial board’s topsy-turvy world, where balancing budgets on the backs of middle- and low-income households is not only defensible, but a moral and economic imperative, the headline on this new editorial had me expecting the worst.

In truth, the editorial was rather even-handed, applauding the Sims’ plan as bold, serious and pro-growth, while pointing out the obvious political hurdles of passing the necessary constitutional amendments.

But I’m guessing those hurdles shrank considerably once the details of the Sims’ plan were released last week. By eliminating the burdensome B&O tax, and replacing it with nothing, Sims may have turned the plan’s most dangerous potential opponent — the business lobby — into his biggest ally. The business community gets everything it could ask for: increased investment in essential infrastructure, and zero taxes. When push comes to shove, powerful business interests will be pushing and shoving to get the Legislature over that two-thirds hump.

While I personally had some initial reservations over this aspect of the plan, I have grown to appreciate it’s subtle brilliance. Eliminating corporate taxes is not only a clever political move in regards to the plan’s passage, it also eliminates one of the most corrupting forces in Olympia… the annual feeding frenzy of corporate lobbyists influencing legislators to pass billions of dollars of special interest sales and B&O tax exemptions. Without corporate taxes there can be no corporate tax exemptions. While the Sims’ plan is sure to be a job creator over all, it is certain to put more than a few lobbyists out of work.

As to concerns that business is getting off scott free, well, there’s a school of thought that says businesses don’t really pay taxes at all; they just pass it on to consumers. That’s a tremendous oversimplification, but when you consider the fact that business owners will now be taxed at as much as 10 percent when they take profits out, it’s a tradeoff I think many progressives will be willing to accept.

The end result is that Washington will move from having the most regressive tax structure in the nation, to one of the most progressive. 80 percent of households will see their total tax burden decline, with only the top 4 or 5 percent seeing significant increases. At the same time, the ability to deduct the income tax from our federal returns will produce hundreds of millions of dollars in new revenues that can be used to either further cut taxes or fund needed investment in education, transportation and other essential services.

Sims estimates the plan will save Washington citizens $731 million in federal taxes, but the number is likely very conservative. The Gates Commission projections were considerably higher, and it is not unreasonable to suggest that a final analysis could more than double the savings.

That’s a lot of money to leave on the table for ideological reasons, which helps to explain why even such a knee-jerk income tax opponent as the Times is willing to take Sims so seriously:

This page has both big reservations about a state income tax and realism that putting one into place is almost politically impossible. But Sims deserves credit for forcing people to stop and think about the best way to pay for state government.

That may seem like a tiny concession, but it’s huge considering the hard line the Times has previously held on this issue. Sims has clearly made the editorial board (if not the headline writer) reconsider its position.

And that is what political leadership is all about.

A lot of you probably saw or heard the headlines the other day that a Snohomish County Superior Court judge had ordered I-18 onto the ballot without the technical changes added by the King County Council. As you can imagine, Tim Eyman made a big deal of this, emailing his supporters and the media a press release titled: “Huge legal victory! Judge orders original I-18 on ballot.”

What a fucking liar.

As the Puget Sound Business Journal dispassionately explains, the judge merely set an August 24 hearing for the two sides to argue whether the initiative should go on the ballot as originally written. Shame on those members of the media who repeated Tim’s spin on this story without getting the facts straight.

Now I’m not an attorney (much to my mother’s chagrin,) but does it strike anyone else as odd that a Snohomish County resident has appealed to a Snohomish County judge, to rule on a King County initiative? I’m sure I’ve seen the terms “standing” and “venue” bandied about in legal documents from time to time.

So if you, gentle reader, have made your mother proud by acquiring a legal degree, could you please add a comment explaining how one county gets to interfere in the affairs of another?

On Wednesday I reported that Tim Eyman had failed to report a $20,000 donation to his personal compensation PAC “Help Us Help Ourselves.” [Show me the money: $20,000 missing from Eyman PAC!]

Well what do you know… the very next day he files an amended report revealing a $20,000 pledge on July 31. (Somebody’s been reading my blog.)

Problem is, Timmy first wrote about this alleged $20,000 donation in a July 23 fundraising email to supporters, that clearly stated “Yesterday, one of our supporters donated $20,000.”

So… is this July 31 “pledge” one and the same as the claimed July 22 “donation”? Unless the PDC performs a proper investigation, we’ll never know for sure, because Tim has made a habit (and a healthy living) obfuscating his public disclosure reports.

The one thing I know for sure is that I smell another amended report coming up.