Article by Erik Smith. Published on Friday, July 02, 2010 EST.

I-1107 is Another Safe Bet For Ballot — Deep Pockets Allow it to Set Records

Tim Martin, president of the Washington Beverage Association. 

By Erik Smith

Staff writer/ Washington State Wire

OLYMPIA, July 2.—The state’s soda-pop distributors turned in 395,000 signatures at the state elections office and may have set a record for the fastest qualifiying time for a ballot initiative in Washington state.

            In just three weeks, the campaign for Initiative 1107 managed to collect all the signatures required to place the measure on the fall ballot, exceeding the number by such an enormous margin that its place on the ballot seems assured. Just goes to show what a modern professional paid signature-gathering campaign can do – especially if it has big bucks behind it.

            I-1107 is the baby of the Washington Beverage Association, which was outraged this year when the Legislature adopted a last-second pop-tax increase without a public hearing. The measure would roll back the pop tax as well as taxes on candy, gum and bottled water, and it would restore a business and occupations tax break for processors of canned meats and vegetables that was narrowed by the Legislature this year.

            All told it would cancel a little more than $100 million in tax increases each year over the next three years. It’s a big hole for the state budget, but that’s the wrong way to look at it, said Tim Martin, an Elma Pepsi distributor and president of the Washington Beverage Association. The real problem is that the Legislature decided to claw its way out of the recession by imposing new taxes on businesses and consumers, he said. The tax increase takes $300 million out of circulation at a time the economy needs it, he said.

            “It’s a bad time to be burdening businesses when they’re already struggling,” he said.

            Two Cents a Can   

The tax, levied by volume, amounts to two cents a can on soft drinks. That’s 48 cents for a 24-can case, but the pop industry says the impact will be greater because of the way supermarkets do their pricing. No one raises prices in 48-cent increments; instead prices go up a buck at a time. And when consumers are hit with higher prices, they’re more likely to go with cut-rate store brands — goodbye Pepsi, hello Safeway Select. Or maybe they’ll just drink water.

            And there’s a problem with that, too. Bottled water costs more, too. The Legislature for the first time this year decided to impose the state sales tax on bottled water. That means a price increase of up to 9.5 percent, depending on the community.

            The sales tax also was extended to candy and gum – or at least those products that don’t contain flour. The state continues to provide a sales tax exemption for products that are considered food.

            The tax increase took effect last month and Martin said soda-pop distributors haven’t seen an impact yet, because of pricing specials timed for the 4^th of July holiday. But it’s coming, he said. “We’re already seeing an impact in bottled water and candy.”

            Swift and Expensive

            The initiative was both fast and expensive. A Thurston County Superior Court judge gave a green light to the measure on June 10, and the petitions were on the streets within two days. State elections officials don’t keep formal track of such things, but they say the fastest qualifying time they can remember was I-1029 in 2008, a union-backed home care measure that collected its signatures in six weeks’ time.

            As for money, the American Beverage Association put up $2.7 million for the measure, in cash and indirect assistance. That’s pretty much every penny the campaign has raised so far. Public Disclosure Commission reports show there was only one other source of money — a $25 check from pop-industry lobbyist Dave Michener.

            Reports from the street have it that the campaign had to pay an enormous bounty for signatures to gather so many in so short a time. Some rumors put the figure as high as $7. Martin said he didn’t know how much the campaign was paying toward the end. Because final expenditure reports from the signature drive have not yet been turned in, it is not clear how much is left in the bank now that the petition phase is complete.

            Opposition From Governor

            You can be sure there’s going to be opposition from the state’s progressive and labor wing. They mounted a “decline-to-sign-effort,” and its spokesman was Sandeep Kaushik, a prominent voice in Olympia’s poverty lobby. Kaushik also is spokesman for this year’s income-tax initiative and has been marshalling opposition to this year’s two liquor-store privatization initiatives.
             Gov. Christine Gregoire also has been outspoken in her opposition.

             “Do I think it’s ridiculous?” she said last week. “I do. I drink Diet Coke. I’m willing to pay two cents a can. I’m willing to pay two cents a can for hospice care. I’m willing to pay two cents a can for adequate kids’ health care.  …so I’m fighting that battle, but look at the fight.

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