Article by Erik Smith. Published on Tuesday, September 28, 2010 EST.
Heavy Fund-Raising Action for Income Tax, Liquor Campaigns
UPDATED 9:40 a.m. Sept. 28 with figures for I-1082 fundraising and recent insurance-industry contributions.
By Erik Smith
Staff writer/ Washington State Wire
OLYMPIA, Sept. 28.—Fund-raising for the six initiatives on Washington’s ballot this year keeps setting records – more than $40 million so far, and it’s getting higher with every day that passes.
That’s $8 million since Labor Day. The state record for initiative spending was shattered weeks ago – $22 million in 2005. And there’s no telling what it will reach by the time the advertising begins in earnest next month. Some $25 million has yet to be spent, and that means an October during which it will be difficult to turn on the television without hearing about the Big Six.
Everything until now has been a prelude for the coming month, when most voters will be making decisions. Because Washington is a by-mail state, the campaigns need to sustain an advertising blitz throughout October, and especially in the latter half of the month, when ballots begin arriving in voters’ mailboxes.
Latest fund-raising figures filed with the state Public Disclosure Commission show the heaviest fund-raising activity this last month has centered on proposals to impose a state income tax and to allow hard-liquor sales in supermarkets and convenience stores.
Meanwhile, the soda-pop industry appears to be standing pat on its remarkable fund-raising effort for Initiative 1107, which would roll back soda-pop and other taxes imposed by the Legislature this year. The American Beverage Association poured in a staggering $14.4 million through the month of August, the highest ever in this state for a single initiative campaign, but not a dime since then.
And there are signs that the campaign for I-1082, a worker’s comp measure, is snapping into life. Insurance-company contributions have begun to show up in campaign coffers, many of them in the last week.
SEIU Plows Money Into Income Tax Campaign
Last week the Service Employees Employees International Union plowed another $500,000 into the campaign for Initiative 1098, this year’s income tax measure. That makes it by far the largest contributor to the measure – $1.7 million of the $4.1 million raised for the measure so far.
The measure would impose an income tax on those making more than $200,000 a year, while making a modest cut in property taxes and raising the threshold for business and occupations taxes. Advertising so far has focused on the tax cuts, without mentioning that an income tax is involved. But the income tax is the central prize – it would raise another $3 billion a year for state programs in an era when tight budgets put every program on the chopping block.
Other public-employee labor unions also are major contributors, among them the Washington Education Association, the United Food and Commercial Workers and the Washington Federation of State Employees. Bill Gates, Sr. and a roster of wealthy individual contributors round out the roster – Gates himself has pumped in $500,000.
Meanwhile, the opposition campaign has been raising money just as fast – and the fund-raising contest is now about even. The Defeat 1098 campaign has raised $4 million, and has spent only a couple hundred thousand. Because it didn’t face a million-dollar expense in getting the measure to the ballot it now has a war chest for the month of October that is substantially larger than the yes campaign. Contributions come primarily from those active in the high-tech business, where stock options threaten to kick top executives over the income-tax threshold. But the number of contributors is far larger, indicating that the campaign has a much broader base.
The largest contributions to that measure are in the $100,000 range. Among the prominent names on the list are Steve Ballmer of Microsoft and Jeff Bezos of Amazon, both of whom have contributed $100,000. But there are a number of non-tech enterprises on the list, including Bartell Drugs and the Sabey Corp.
Liquor Campaigns Attract Big Money – I-1105 is Stalled
There are actually two liquor initiatives on the ballot this year, Initiative 1100 and I-1105, both of which would eliminate the state liquor stores and allow hard-liquor sales in supermarkets and convenience stores. The key difference is that I-1100 is more of a free-market proposal, eliminating most of the marketing restrictions that have been in place since the end of prohibition.
Meanwhile, liquor distributors, who have a protected position under the current law, have put their money behind I-1105. That measure would continue the current arrangement under which all sales must go through distributors.
The striking fact about the campaigns is that there appears to have been a shift in strategy. I-1105 was launched as an alternative to the retailer measure, and it got $2.2 million from a pair of big liquor distributors, the Odom Corp. and Young’s Market Co. But since the measure made the ballot and the final campaign debts were cleared in July, they haven’t put a nickel into the campaign.
Instead, the distributors seem to have found a more promising option – they’re putting their money behind the no campaign. A coordinated campaign against the two measures, launched by the public-employee unions that stand to lose jobs in the liquor stores, has been awash in contributions from the beer industry. The beer distributors stand to lose shelf space under either measure; the repeal of marketing restrictions under 1100 threatens their business as well. Connections run deep in the industry — through a variety of partnerships and other arrangements, the liquor distributors have interests in the beer and wine distribution biz.
In the last five weeks about $5 million has poured into the no campaign from distribution interests and the beer industry, for a total $6.2 million. At one point it appeared distributors might even be playing both sides, in a direct way — a Young’s subsidiary involved in wine distribution appeared to be putting money into the no campaign while its parent company was supporting I-1105. That campaign finance record has since been amended.
Meanwhile, I-1100 remains an active campaign, with about $750,000 raised during the month of October. Costco, which provided the seed money for the measure, continued to put money into the campaign during September, and new contributions showed up from Safeway and Wal-Mart. About $2.6 million has been raised for the campaign overall.Worker’s Comp Campaign Awakens
Meanwhile, the fight over a worker’s comp measure appears to be heating up – not to the extent of the other campaigns, but the fund-raising reports are beginning to show signs of activity. Insurance-industry contributions have begun to flow to I-1082, especially in the last week.
The measure would allow private insurance companies to compete for the first time with the state Department of Labor and Industries. Washington is one of only four states that does not allow private companies to offer worker’s compensation insurance. The measure made it to the ballot with support from the Building Industry Association of Washington, one of the leading critics of the state-managed program. But since it made it to the ballot, there hasn’t been much activity in fund-raising – until this month.
Liberty Mutual Group, which provided $300,000 for the initial signature gathering campaign, kicked in with another $200,000 on Sept. 10. Hartford Financial added $150,000 last week, Farmer’s Services put up $125,000. Other recent insurance-sector contributions come from the Alaska National Insurance Co., the Property Casualty Insurers of America, the Seabright Insurance Co, and USI Northwest. Also contributing was the Washington Self-Insurers Association, an employers’ organization.
Given the insurance industry’s willingness to spend heavily on previous initiatives in Washington state, the contributions may be a sign of things to come. Total fund-raising for the initiative at this point remains a relatively low $1.8 million, while nearly $1 million has already been spent, most of it to get the initiative on the ballot.
The yes campaign still has an uphill battle when it comes to fund-raising, however. Two fund-raising efforts have been launched against the measure. The largely union-backed No on 1082 campaign has raised $1.4 million, while the largely trial-lawyer-backed Stop Insurance Industry Takeovers has raised $1.1 million. Those campaigns didn’t face the expense of getting the measure on the ballot, and the reports show they are gearing up for a big-money ad campaign next month.
I-1053 is Sleeper
The real sleeper in the campaign is Initiative 1053, a measure that would require a two-thirds vote of the state Legislature before taxes can be increased. The polls show that the measure is the only one of the six with overwhelming voter support. The same principle has been approved by Washington voters three times over the last two decades, and when lawmakers suspended the rule this year – and passed a tax increase – the furor in the Legislature was enormous.
There are two fund-raising campaigns for the measure – one from initiative promoter Tim Eyman, and another coordinated by the Association of Washington Business. Together they have raised about $1 million. But perhaps a more telling statistic is this – it appears that only about $50,000 has been raised for the measure since the initiative made the ballot in July.
Meanwhile, there hasn’t been much activity on the no side, either. An opposition campaign formed only in the last month, and so far it has raised only $47,000.The curious thing about the fund-raising activity is that it is far lower than on a near-identical measure in 2007. That year, Initiative 960 triggered more than $1.2 million in opposition spending. But most of the money came from public-employee unions and allied interest groups. This year they are putting their money elsewhere.
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