Eyman’s Latest Initiative Threatens Legislature: Put Two-Thirds Constitutional Amendment on Ballot — or Else

Sales Tax Would be Slashed if Lawmakers Say No, But Backing for Campaign Uncertain – Medical Marijuana, Campaign Finance Measures Also Filed as 2014 Initiative Season Opens

Initiative promoter Tim Eyman kicks off the parade of initiatives for 2014.

In the lobby of the secretary of state’s office, initiative promoter Tim Eyman kicks off the parade of initiatives for 2014.

OLYMPIA, Jan. 6.—Initiative promoter Tim Eyman is back again with a two-thirds-for-taxes measure that aims to put the screws to the Legislature in an unusually crafty way – if lawmakers don’t place a constitutional amendment on the ballot, they can kiss billions of dollars goodbye.

The measure would slash the state sales tax if lawmakers don’t cooperate. Eyman is hoping his new measure, Initiative 1325, will give them a reason to revive the wildly popular legislative voting requirement that the state Supreme Court threw out last year. Or rather, billions of them. The high-pressure tactic is likely to face a legal challenge, if it goes before voters and they say yes. But first things first — will anyone line up behind Eyman? The measure also might determine whether there is any will within the state’s business community to fight the two-thirds-for-taxes battle yet again.

So begins another initiative season. Monday was the first day for Washington residents to file initiatives- to-the-people for 2014. Eight measures were filed, among them initiatives to preserve the state’s medical-marijuana industry, now under fire by federal law-enforcement authorities, and deny free-speech rights to corporations – a key point in the U.S. Supreme Court’s recent Citizens United ruling allowing unlimited spending in independent political campaigns.

Would Deliver Ultimatum

Eyman, the most successful initiative promoter in state history, scored his biggest successes with his two-thirds-for-taxes initiatives of 2007, 2010 and 2012. They required a two-thirds vote of the state House and Senate before taxes could be increased, and when the rule was in force it essentially blocked debate on big tax hikes. Voters have said yes to the rule five times over the last 20 years, by ever-increasing margins. But it all went out the window last year when the state Supreme Court decided that the rule could not be imposed by initiative. The court said the only way to do it was with a constitutional amendment. And that’s not likely to happen, given the fact that the Legislature would have to take a two-thirds vote to place it on the ballot, and the rule is widely opposed by legislative Democrats.

Eyman has been looking for a way to revive the rule ever since the Supreme Court nixed it, and he says he has finally hit on the magic solution. His initiative says that if the Legislature won’t refer the amendment to the ballot by April 15, 2015, the state sales tax would be reduced by a penny, from 6.5 percent to 5.5 percent. That would represent an enormous hit on the state budget — $1 billion a year. Or rather $2 billion, when one considers that the Legislature adopts budgets on a two-year cycle. “It is elegant, legal, and easy to explain,” Eyman said. “Either they let us vote, which costs them nothing, or we get the largest tax cut in state history.”

James Madison Called

Eyman’s latest two-thirds-for-taxes idea has opponents sighing here-we-go-again. State Rep. Reuven Carlyle, D-Seattle, chairman of the House Finance Committee, says the two-thirds rule allows a minority of the Legislature to thwart the will of the majority. And he quotes Alexander Hamilton from the Federalist Papers about the ill that brings: “tedious delays, continual negotiation and intrigue, contemptible compromises of the public good.”

Says Carlyle, “It is as if James Madison, Alexander Hamilton and John Jay categorically anticipated the self-serving narrow proprietary financial interests of professional hucksters, as we see today. They expressed emphatic, unequivocal, impassioned opposition to supermajority tyranny. Or I should say tyranny of the minority. And to Mr. Eyman specifically, I would respectfully submit that James Madison called and wants his constitution back.”

Whatever the Legislature thinks about it, though, the public seems to enthusiastically favor the rule. The last version, I-1185, passed with 64 percent of the vote. Eyman figures a constitutional amendment would be a slam-dunk if the voters ever had a say. Last year he tried filing a convoluted measure that would have required annual advisory votes on whether the public wanted to vote on a constitutional amendment. But that one quickly fizzled for lack of financial support, in part because it didn’t actually do anything.

This one certainly does, but there is a legal issue that might be raised – the measure does more than one thing. It cuts the state sales tax, but it relents if the Legislature places a constitutional amendment on the ballot. So the measure could be vulnerable to a challenge under the state constitution’s single-subject requirement for initiatives and other legislation. Eyman says lawyers have advised him it would meet the test because the issues are thematically linked.

But probably more important – Eyman’s proposal will test business community support for the supermajority-vote requirement. Even if voters like the idea, their opinions are the least of the problem.

Takes Big Money

It takes big bucks to collect signatures for an initiative. Signature-gathering requirements have gone through the roof in recent years as the state’s population has grown – it now takes 246,372 signatures from registered voters to qualify for a place on the ballot. And these days about the only way a measure can hit the mark is with a paid signature-gathering campaign — $1 million is typical, and some late-starting signature drives cost even more than that.  

So where’s the money going to come from? Eyman says he doesn’t know. “This is day one. We go into every initiative with a clean slate. We are now going to go out and tell everybody this is our initiative for the year, and at that point we will start asking for support, both financially as well as collecting signatures.”

If things run to form, what Eyman is really after is backing from the state’s business community. It financed his campaigns in 2010 and 2012, through fundraising drives coordinated by the Association of Washington Business.  Thus the new proposal is a test of whether the time for the two-thirds rule has come and gone.

Has Blocked Increases

Whenever the two-thirds rule has been in place, it has been difficult for the Legislature to raise taxes. That’s because tax-averse Republicans almost always say no, and they have more than a third of the votes in the Legislature. During the late recession, when the rule was in effect, only two tax measures passed. One ended a tax exemption for out-of-state banks, and another extended a tax for cleanup of leaking underground fuel-storage tanks. Whether the rule blocked whopping tax increases is a matter of argument, because they simply didn’t come up.

The exception that proved the rule came in 2010 – and for this to make sense, a little detail is necessary. For the first two years after an initiative passes, the constitution requires a two-thirds vote of the Legislature in order to modify, suspend or repeal it. After that point, it takes a simple majority vote, just like with any other law. In 2010, the two-year clock ran out on I-960, and Democratic majorities in the House and Senate were easily able to muster the votes to suspend it. Then they promptly passed a package of tax increases designed to generate $6.7 billion over a decade. The business community responded by dumping money into Eyman’s next signature-gathering campaign.

But this time there is no immediate threat. Big tax increases aren’t on the table this year – maybe next, as Gov. Jay Inslee hinted last month when he unveiled his proposed supplemental budget, but not immediately. And ever since the Supreme Court tossed the rule last year, a subtle argument has raged in business and legislative circles: Might the business community be better off putting its money behind candidates who won’t raise taxes? Some retail interests also say they were rubbed the wrong way in 2012 when signature-gathering crews for Eyman’s I-1185, paid for by business bucks, also gathered signatures for another Eyman-sponsored campaign. I-517 would have expanded the rights of signature-gatherers to gather signatures at the front entrances of stores.

All of which raises the question — will Eyman find the cash? You have to take these things one at a time, he says. “It is always a challenge, and so you have to start with an idea and go out and start asking for support for it.”

Sanction for Medical Marijuana Industry

Two measures filed by Kirk Ludden of Bellevue would establish protections under state law for the medical-marijuana business, which has come under fire from the U.S. Attorney’s Office for the rather loose rules under which it operates. The industry has operated with little oversight from state authorities since Initiative 692 was passed in 1998. Now that Washington is preparing to launch a heavily taxed commercial marijuana industry, feds have been urging a crackdown to ensure lower-cost medical marijuana offers no competition.

The two measures, as yet unnumbered, contain minor differences, but the key point is that they restate the law, and thus would preserve the industry in its current form. They also ensure that the Legislature cannot impose the same high taxes on medical marijuana. Both would provide state sanction for the business, by creating a “Medical Cannabis Regulation Board,” and would allow relatively modest taxes or application fees to be collected to support its operations. One version would allow large medical marijuana-growing operations – up to two million square feet. That version also would require proof of impairment before patients can be charged with driving under the influence – a sore point for many patients, because 2011’s marijuana-legalization initiative allows charges to be filed based on blood draws. Both measures say medical marijuana users are entitled to the same legal protections as users of prescription drugs. They also would stipulate that Washington-chartered banks could take deposits from the medical-marijuana industry, though federal rules still would likely be a problem.

Two other marijuana-related initiatives were filed by Ludden, but were unavailable for reading Monday evening on the Secretary of State’s website.

An initiative filed by Kimberley Jordan of Bellevue, also unnumbered at this point, would declare that corporations are not “persons” under Washington law. The intent section of the initiative makes clear that the aim is to restrict corporate spending on Washington political campaigns – the point at issue in the U.S. Supreme Court’s Citizens United ruling. Eyman also filed two other initiatives that would revive his successful $30 car tab measures of 1999 and 2002 and require public votes when local governments decide to install red-light cameras.