Article by Erik Smith. Published on Friday, August 14, 2010 EST.

Staggering Spending Outstrips Other Initiative Campaigns

By Erik Smith

Staff writer/ Washington State Wire

OLYMPIA, Aug. 13.—Soda-pop distributors have pumped another $3.5 million into their campaign to roll back this year’s grocery taxes – an astounding figure that may make Initiative 1107 the one to watch this year.

            That makes a grand total of $6.7 million that the pop industry has put toward the ballot measure. The measure seemingly came from nowhere at the last possible second last June, winning approval for its ballot title just three weeks before the state deadline for signatures. And with the fastest petition drive in state history, fueled by $2.5 million in spending for paid signature gatherers, the campaign made it to the finish line on the final day with 395,000 signatures. That was 155,000 more than were required.

            The $3.5 million contribution comes from the Washington, D.C.-based American Beverage Association, the same entity that has almost entirely financed the campaign so far.

            The measure targets the series of tax increases that were imposed by the state Legislature this year. Among other things, the Legislature imposed a temporary three-year tax on soda pop, sales taxes on candy, gum and bottled water, and canceled a tax break for canned-food processors. Those taxes would be overturned by the measure.

            The state Office of Financial Management estimates that the measure would reduce state tax revenue by $352 million over five years.

            Big Ad Buy Reported Last Week

            The contribution, made Aug. 3, showed up on the state Public Disclosure Commission website this week. And it helps connect the dots. Last week ad buyers and television sales representatives reported that Initiative 1107 had made an enormous ad buy for the month preceding the election. By buying airtime early, the campaign gets lower rates. Last week, 1107’s campaign staff declined to reveal how much they planned to spend for television advertising.

            Kathryn Stenger, spokeswoman for the campaign, said the money will make it possible to present one of the campaign’s central messages — that the tax rollback is about more than soda pop. “We want people to understand that this is a food and beverage tax. It’s not a soda tax, it’s a grocery tax. It’s an aha moment when people realize this. But it’s a big state, and we need to get our message out.” 
            In encompassing other taxes, the backers give the measure a broader appeal. But it all started with soda pop. The American Beverage Association has made it a priority to quash pop taxes, beating back bills this year in Mississippi, New Mexico and New York state. It also spent $4 million last year in Maine on an initiative campaign to overturn another pop tax, with the campaign theme “Fed Up With Taxes.”

            In Washington state, however, the pop tax was sprung with little warning in the final days of the 2010 legislative session, part of a package of taxes that were aimed at plugging a gaping hole in the state budget. Last-minute lobbying by the state’s pop distributors was unable to block the tax — and the national association had no time to step in. The tax amounts to two cents on a 12-ounce can of pop.

The spending puts the pop distributors far ahead of the other five initiatives on this year’s ballot in Washington state. The nearest is Initiative 1105, the liquor-distributor measure that would junk the state liquor stores and allow hard-liquor sales in supermarkets and convenience stores. Liquor distributors have contributed $2.2 million to that campaign.

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