Eyman's noxious nine

The radical tax cutter behind Initiative 695 spouts so much nonsense, we can barely keep up.

The initiative process makes for strange spokespeople.

Last year, with anti-affirmative action Initiative 200, Washington voters were treated to the bizarre phenomenon of columnist John Carlson, the ultimate frat-boy politician, touring the state talking earnestly about bringing the races together.

This time around state voters are being treated to the wise words of tax-cutter Tim Eyman. Like Carlson, the Mukilteo resident has the frat-boy connection (he finances his political career by selling fraternity and sorority wrist watches through the mail) and the I-200 tie-in (he was one of its original sponsors). And, again like Carlson, the guy just won't shut up.

In one respect, Eyman actually has a pretty easy job. He has to convince car owners that they should cut the cost of their license tabs to $30. And he appealed to the anti-tax crowd by including a provision that any tax increase by any governmental entity must go to the voters.

So far so good. But, as I-695 will cut total state revenues by about 7.5 percent annually—and specifically defund programs aiding criminal justice, public transit, and small cities—his job is to convince voters that his radical tax cut is no big deal. This part hasn't worked out so well, given Eyman's dearth of knowledge about how government works. Here's our take on nine of Eyman's greatest campaign trail (mis)statements.

1. On the issue of whether the initiative will scuttle the $2 billion in road and bridge projects under last year's Referendum 49: "If transportation is considered a priority," says Eyman, "it will continue to be one, whether 695 passes or not." (Seattle Times, 9/26/99)

Priorities are nice, but funding counts too. The R-49 formula would have pumped more than $500 million annually into a bond-funded road and bridge improvement program. Under I-695, more than two-thirds of that money disappears.

2. "In the long run, Eyman said, the $550 million annually pumped into the economy would generate enough money in sales tax to fill the void." (Seattle Times, 7/20/99)

Now wait one second—even assuming car owners spent every penny of that $550 million (and didn't save, invest, buy groceries, or spend a bit of their bonus out of state), the state's 6.5 percent sales tax would raise $35.7 million. Next add the taxes the state collects from businesses making these sales—another $8.2 million. That still leaves us about $500 million short.

Even the general stimulation to the economy of extra spending won't do it. As the majority of government spending is on employees, you have to subtract out the lost wages of laid-off civil servants. The Washington Research Council makes this comment: "The impact on manufacturing, job growth, or capital investment [of I-695] would be negligible or negative—particularly when considered in relation to the public investment that would be sacrificed. Numerous studies have agreed on the high rate of return realized from investment in transportation infrastructure. . . . That's precisely the investment threatened by I-695."

3. "It's a matter of returning the billion-dollar surplus back to the people." (Seattle Weekly, 7/29/99)

According to state projections, lost revenue under I-695 would reach $1.1 billion after 18 months, so the surplus would be "returned" within less than two years.

4. "The state government has a $1 billion tax surplus, local governments have a $3 billion tax surplus, and still our opponents say the government can't afford I-695." (Seattle Post-Intelligencer, 9/13/99)

Credit P-I reporter Robert Gavin for this catch. When he chased down the I-695 campaign's claim of a the $3 million "local government tax surplus," he discovered the figure actually referred to the state's Local Government Investment Pool, a fund containing money being held by local jurisdictions for short periods of time, which is then banked to earn interest. "This guy doesn't have a clue," grumbled state treasurer Michael Murphy.

5. "All taxes that used to be increased at smoke-filled rooms at meetings only politicians attended will be forced to have much more public scrutiny." (Seattle Times, 8/16/99)

Exactly when did Eyman graduate from the Pat Buchanan School of Political Rhetoric?

6. "The GOP's State Committee voted overwhelmingly to endorse Initiative 695 after a long line of speakers heaped praises on the ballot measure. They gave a standing ovation to radio talk jock John Carlson, who lionized the proposal as 'a working-class tax cut' and 'a moral issue.'" (Spokane Spokesman-Review, 9/19/99)

OK, so Carlson and Eyman technically aren't the same person. Currently your tabs cost more if you drive a newer, more expensive car; under 695 all tabs will cost $30. This switch from a graduated tax to a flat tax will benefit the richest citizens most. Also, cuts to programs like transit and public health weigh most heavily on low-income citizens. And speaking of moral issues, why is the Republican Party, which pushed R-49 last year, now abandoning the road-fixing program which received the support of 57 percent of state voters?

7. Eyman claims that programs being defunded through his initiative have little to fear because lawmakers "do anything they want to shift the money around." (Seattle Post-Intelligencer, 9/22/99)

The faith of this antigovernment crusader in the wisdom of the Legislature is touching, but perhaps misplaced. Many of the programs that will lose funding under I-695, such as the state sales tax equalization account, pump money to small cities and counties that don't have significant retail development. These folks don't have much pull in Olympia.

8. In response to fears that I-695 could hurt state and local bond ratings, Eyman says all such bonds should be issued only after a public vote: "What could be more certain than the voters, the bond payers themselves, agreeing in advance to pay it back?" (Seattle Times, 9/26/99)

Not so fast. Obviously Eyman doesn't realize it, but municipalities issue small amounts of bonds all the time for small utility projects, which then are paid back through the fees charged to ratepayers. These are general obligation bonds, guaranteed by a municipality's ability to charge taxes. If I-695's requirement for a public vote to raise any tax strikes lenders as increasing the risk involved, governments would have to pay higher interest rates, giving ratepayers less for their money.

9. "Anything but an overwhelming 'Yes' for I-695 will be seen by politicians as an endorsement of higher taxes." (Tacoma News-Tribune, 9/3/99)

Whatever you say, Tim.

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