The initiative put the legislature in a position where it have to make a decision: one of two people let the taxation decrease take effect or stop it by introduce an amendment come the ballot.
You are watching: Initiative measure no. 1366
The Legislature deserve to stop the sales tax decrease indigenous taking impact on April 15, 2016, by referring an amendment to the ballot that asks voters whether it have to take a two-thirds poll in the legislative or voter approval to raise taxes.<4>
If the sales taxes decrease does take effect, the state will certainly lose about $1 billion in taxes revenue. If the Legislature advert an amendment come the ballot and voters give it, elevating taxes will certainly be a more difficult process.
The factor Initiative 1366 aimed to do this is due to the fact that the Washington State constitution only required the legislature come pass any kind of piece the legislation, tax-related or other, by a simple majority vote, and Washington citizens perform not have the strength to initiate constitution amendments.<5>
Text of measure
The main ballot title was:<6>
| “||Initiative measure up No. 1366 involves state taxes and also fees.|
This measure would certainly decrease the sales tax price unless the legislature describes voters a constitution amendment requiring two-thirds legislature approval or voter approval to raise taxes, and also legislative approval because that fee increases.
Should this measure be enacted into law? correct < > No < ><7>
The ballot an introduction was:<6>
| “||This measure would decrease the state sleeve sales tax rate on April 15, 2016, from 6.5 percent come 5.5 percent. The sales tax price would no be lessened if, by April 15, 2016, two-thirds of both legislative homes refer come the ballot a vote on a constitution amendment that calls for two-thirds legislative approval or voter approval to raise taxes, and bulk legislative approval to set the lot of a fee increase.<7>|| ”|
A fiscal affect statement for Initiative 1366 was issued by the Washington Office of jae won Management. The fiscal impact statement read:<8>
Fiscal affect Statement because that Initiative 1366
If the legislative does no refer a constitutional amendment to voters for consideration at the November 2016 basic election, over the following six budget years, sales taxation revenue because that the state General fund would decrease $8 billion. Sales taxes revenue for the state performance Audit Account would certainly decrease $12.8 million. State business and also occupation (B&O) taxes revenue would boost $39.9 million. Regional tax revenue would increase $226.1 million. State expenditures would be $598,000. If an modification is referred to voters, budget year 2017 state election expenditures would rise $101,000. There would certainly be one unknown boost in local federal government election expenditures.
General AssumptionsThe effective date of the to plan is December 3, 2015.Estimates use the state’s budget year of July 1 with June 30. Fiscal year 2016 is July 1, 2015, to June 30, 2016.As the expression is offered in section 3(2) of the initiative, “prior to April 15, 2016, describes the ballot” means that the Legislature overcome the constitution amendment explained in ar 3(2) of the initiative prior to April 15, 2016, and submits it come the voters for their consideration on the November 2016 basic election ballot.
AnalysisThe initiative gift the Legislature through a selection that leads to two possible and support exclusive scenarios. The Office that Financial management (OFM) cannot predict how the Legislature will certainly act. Because that the purposes of this fiscal influence statement, OFM explains the fiscal impact of every scenario.
Scenario 1 – The legislative does not refer a constitutional amendment to voters before April 15, 2016. On April 15, 2016, the state retail sales tax rate would decrease native 6.5 percent to 5.5 percent.
State and also Local government Revenue AssumptionsChanges in the state retail sales tax rate could impact the amount of products consumers purchase, which would affect state and local tax revenue. The room of Revenue (DOR) all set the revenue estimates assuming a price elasticity that 0.99. Price elasticity is a technique used to calculation the adjust in intake of a good when price increases or decreases.
State RevenueReducing the state retail sales taxes from 6.5 percent to 5.5 percent would decrease earnings deposited in 2 funds: the state general Fund and the state power Audit Account.
Table 1 provides estimates of the retail sales tax reductions over the next six fiscal year to the state general Fund. State profits deposited in the state General fund may be used for any government purpose such together education; social, health and environmental services; and also other basic government activities.
Table 3 provides estimates of the boosts in state B&O taxes deposited in the state General fund over the next six budget years. The state B&O taxes is a pistol receipts tax. The is measured on the value of products, gun proceeds the sales or gross income of the business. Due to price elasticity, state B&O tax revenue can increase with the adjust in the state retail sales taxes rate.
State Expenditure AssumptionsThe effective day of the sleeve sales taxes decrease is April 15, 2016
State ExpendituresTo implement a lessened retail sales tax price that takes impact on April 15, 2016, DOR expenditure would boost an approximated $598,000 end the first six fiscal years. Table 5 provides price estimates by fiscal year, rounded come the nearest thousand.
The timing of the rate change and the number of businesses influenced by the rate readjust contribute come DOR’s costs. A adjust in the state retail sales tax price would affect around 200,000 companies that file monthly, quarterly or yearly tax returns. This businesses collect sleeve sales taxes from customers and also then happen the sales taxes revenue to the state once filing a return.
A rate adjust that occurs on April 15, 2016, would be reflected on tax returns due may 25, 2016. These taxes returns have to reflect a sales tax rate of 6.5 percent because that transactions that occur April 1 come April 14, 2016. Transactions that occur April 15, 2016, or later on should reflect a sales tax rate of 5.5 percent. Based on experience, return filed automatically after a rate readjust have much more errors than various other returns. That is assumed the a high number of tax return submitted in may 2016 will certainly contain errors. DOR staff must manually process and solve each return that is in error, is out-of-balance or amends a previous return.
In addition to raised labor costs for processing a greater number of untrue returns, DOR would certainly experience various other expenditures, together follows.
Fiscal year 2016: Programming and also testing computer system changes. Printing and also mailing a special an alert to affected taxpayers. Updating other notices, publications and webpages.
Fiscal years 2016 with 2021: Preparing added refunds and assessments. Responding to much more questions from influenced taxpayers submitted through normal processes and also a certain DOR system.
State and also Local government Expenditure AssumptionsThe state would not pay the cost of consisting of a constitution amendment ~ above the ballot. County federal governments would pay the price of including a constitutional amendment ~ above the ballot. The amendment and other required information would certainly be contained in the state Voters’ Pamphlet and Online Voters’ Guide.
State ExpendituresThe Office of the Secretary the State’s expenditures because that the 2016 basic election Voters’ Pamphlet might increase through as lot as $101,000.
Voters’ Pamphlet expenses are based on the number of pamphlets printed, the variety of pages in each regional edition of the pamphlet, layout and composition work, distribution, postage, translating the pamphlet into minority languages as forced by federal law and producing the pamphlet in accessible formats because that voters through disabilities. The content forced by chapter 29A.32 RCW likewise contributes to the expense. Because that constitutional amendments, the Secretary is required to encompass the text of the amendment, pro and also con arguments, the legal to know of the amendment, the main ballot title, one explanatory statement ready by the lawyer General and the total number of votes actors for and against the modification in the Legislature.
Based on historic Voters’ Pamphlet expenses, the estimated cost of the 2016 Voters’ Pamphlet is $12,625 per page. Due to constraints in the printing procedure and the minimum materials required by state and federal law, the Secretary normally assumes each amendment or measure will use eight pages in the pamphlet. If the amendment described in this initiative provides eight pages, that would include $101,000 come the total cost that the pamphlet.
Local government ExpendituresCounty governments will experience greater expenditures because that the 2016 basic election. The expense to county federal governments cannot be approximated prior to the election.
The 39 counties in Washington incur prices for conducting elections, including printing ballots and also ballot materials, distributing empty ballots, and also canvassing and also tabulating voted ballots. A jurisdiction v candidates or measures on the ballot reimburses counties for its prorated share of choice costs. However, as listed for in RCW 29A.04.420, the state reimburses counties only for its re-superstructure of election prices when federal and also state gyeongju or state measures and constitutional amendments show up on the ballot in one odd-numbered year.<7>
Initiative 1053See also: Washington Supermajority Vote compelled in State Legislature come Raise Taxes, plan 1053 (2010)
In 2010, Washington voter approved plan 1053. This Tim Eyman-backed initiative required a two-thirds vote in the legislative or voter approval to increase taxes. Top top February 28, 2013, the Washington can be fried Court rule Initiative 1053 unconstitutional top top the basis the the Washington State Constitution calls for a majority vote top top legislation, not a two-thirds vote.<9> The state constitution would must be amended in stimulate to need tax boost legislation be approved by a two-thirds majority. However, Washingtonians perform not have the power to initiate constitutional amendments. Plan 1053 changed a statute, no the constitution. Therefore, the legislative branch would need to amend the constitution and refer the worry to the ballot, which was viewed as not most likely to happen.<10>
Initiative 1366 aimed to circumvent citizens" absence of power to initiate constitutional amendments. Eyman"s 2015 initiative placed the state legislative in a bind, forcing them come either put his two-thirds requirement amendment ~ above the ballot or allow the sales tax to decrease native 6.5 come 5.5 percent.
As of July 1, 2015, Washington state has a sales tax rate of 6.5 percent. To plan 1366 will certainly decrease the taxation to 5.5 percent, uneven the legislature refers a two-thirds requirement to increase taxes amendment. Eight states have sales tax rates higher than Washington"s. Two various other states have actually a 6.5 percent sales tax. The median state sales tax price is 5.05 percent. Washington"s sales taxes is 1.45 portion points greater than the average.
The complying with sales tax rates are accurate as of July 1, 2015, follow to the Sales tax Institute.<11>
State 2015 sales taxation State 2015 sales tax State 2015 sales tax
| Alabama || 4.00% || Louisiana || 4.00% || Ohio || 5.75%|
| Alaska || 0.00% || Maine || 5.50% || Oklahoma || 4.50%|
| Arizona || 5.60% || Maryland || 6.00% || Oregon || 0.00%|
| Arkansas || 6.50% || Massachusetts || 6.25% || Pennsylvania || 6.00%|
| California || 7.50% || Michigan || 6.00% || Rhode Island || 7.00%|
| Colorado || 2.90% || Minnesota || 6.875% || southern Carolina || 6.00%|
| Connecticut || 6.35% || Mississippi || 7.00% || south Dakota || 4.00%|
| Delaware || 0.00% || Missouri || 4.225% || Tennessee || 7.00%|
| Florida || 6.00% || Montana || 0.00% || Texas || 6.25%|
| Georgia || 4.00% || Nebraska || 5.50% || Utah || 4.70%|
| Hawaii || 4.00% || Nevada || 6.85% || vermouth || 6.00%|
| Idaho || 6.00% || brand-new Hampshire || 0.00% || Virginia || 4.30%|
| Illinois || 6.25% || new Jersey || 7.00% || Washington || 6.50%|
| Indiana || 7.00% || brand-new Mexico || 5.125% || West Virginia || 6.00%|
| Iowa || 6.00% || new York || 4.00% || Wisconsin || 5.00%|
| Kansas || 6.50% || phibìc Carolina || 4.75% || Wyoming || 4.00%|
| Kentucky || 6.00% || north Dakota || 5.00% || Washington, D.C. || 5.75%|
Revenue from the state sales tax accounted for 47.2 percent of all revenue, or around $15.6 billion, in the state general fund during the 2013-15 budget period. It likewise accounted because that 43.94 percent of every revenue received from state taxes and also 19.05 percent of every revenue in total.<12>
The sales tax is Washington"s largest resource of revenue.<13>
The campaign in assistance of the initiative to be led by voters Want more Choices.<14> The petition journey for the initiative was funded by Tim Eyman and M.J. Fagan.<6> Eyman took the end a $150,000 mortgage top top his home to help jumpstart the campaign.<15>
SupportersOfficialsOrganizationsJefferson ar Republican Party
Arguments in favor
State Senators Michael Baumgartner (R-6) and Doug Ericksen (R-42) composed an e-mail encouraging republic to support Initiative 1366. The senators argued:<16>
| “||As members of the state senate we think that a 2/3 requirement for tax boosts or come create new taxes will accomplish many positive things because that the world of Washington.|
First, let united state be clear, the capacity of the government to take the hard earned dollars native the human being of Washington need to be treated in different way from other species of legislation. The strength of the state to take these dollars has a large impact on our families and also our communities. The more the government takes, the less families have to spend on what they take into consideration to be priorities. The only means to regulate the size and also growth of government is to do it more daunting to advanced taxes. Every year in Olympia taxes room raised and also government is not reformed.
A 2/3 need will pressure your legislators to carry out the following: Prioritize state spending. Seek more efficient usage of existing taxes dollars. Occupational together top top solutions. Seek private sector reforms. Seek expansion policies the will boost dollars comes in by cultivation the economy.
All of us understand the require for the federal government to collection taxes as part of polite society. This initiative go not get rid of taxes, yet simply makes it harder to raise taxes.<7>
We Believe-We Vote, a coalition of Christian citizens and community leaders who aim to offer informed voter information to the faith-based community, said:<18>
1. Voters have actually approved initiatives requiring a 2/3 vote to raise count 5 time before, over the critical 20 years. Background shows united state that without this usual sense taxes payer protection, the legislature walk the simple thing and raises taxes. This year’s Legislature, without the two-thirds need in effect, enhanced taxes a lining $17.5 billion.
2. If I-1366 i do not care a constitution amendment, Olympia will certainly be encouraged to revolutionary government, prioritize spending and re-evaluate currently programs prior to raising count – simply as it have to be.
3. If Olympia decides to decrease the sales tax rate instead, the consumer will benefit. Additionally, the cities and also state will certainly reap huge increases in local B&O tax and also local sales tax revenue, according to the Office that Financial management prediction based on increases in consumer spending because of a reduced sales tax.<7>
Doug Ericksen wrote in one opinion shaft to The Bellingham Herald:<19>
| “||You work difficult for your money and I think it have to be harder because that the federal government to take it. As lot as candidates promise no to raise her taxes, taxes are increased virtually every year. The 2/3-for-taxes constitutional amendment will defend the taxpayers by helping those politicians keep their guarantees by making tax boosts the critical resort and not the an initial choice.|
Let’s challenge it: reforming federal government is hard but politicians acquisition your money and giving that to others is easy. The 2/3s modification will pressure legislators to occupational together, prioritize spending and also make government an ext efficient — every the points they speak they desire to do.
The adversaries of I-1366 claim that making that tougher come raise taxes only benefits billionaires and large companies. Together taxpaying members the the middle class, you and also I space smart enough to understand that’s not true: making it tougher to raise counting benefits every one of us. Tax-hiking politicians insurance claim they only want come raise taxes on the rich, yet when the votes space taken, an effective lobbyists protect their clients and you and also I room the ones who obtain stuck payment the bill.<7>
Supporters of plan 1366 had actually raised over $1.6 million as of October 27, 2015.<20>
Committee Amount raised Amount spent
| 2/3-For-Taxes constitution Amendment initiative - VWMC || $1,640,619.48 || $1,525,390.82|
Donors who added $15,000 or more to the project include:
| Clyde Holland || $450,000|
| Kenneth L. Fisher || $125,000|
| Kemper Holdings gmbh || $100,000|
| nationwide Electrical home builders Association, Puget Sound thing || $100,000|
| Garneau properties || $50,000|
| Lawrence P. Hughes || $50,000|
| Fremont Dock agency || $45,000|
| Robert P. Rotella || $25,000|
The campaign versus the initiative was led by The NO on I-1366 Coalition.
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<21> The project organization had five officers: Northwest gradual Institute founder Andrew Villeneuve, previous Secretary that State Sam Reed (R), previous Sen. Randy Gordon (D-41), previous Rep. Phyllis Gutiérrez Kenney (D-46b) and also NW Media Allies owner Sue Evans.<22> enemies have likened the initiative come "blackmail" and also a "hostage-taking scheme."<23><24>