Tax Policy on the Ballot: Elway Poll Shows Declining Support for I-1366

A new Elway Poll shows support for Initiative 1366 has eroded over the last several months. As Jim Brunner reports in the Seattle Times,

The Elway Poll released Monday finds the I-1366 contest dead even, with 42 percent of those polled in favor and 42 percent opposed to Eyman’s latest proposal.

That’s down from the 13-point lead I-1366 had in a July Elway Poll, when 49 percent were in favor and 36 percent opposed.

Brunner summarizes:

The initiative would cut the state sales tax by a penny unless lawmakers send a constitutional amendment to the 2016 ballot requiring a public vote or two-thirds supermajority in the Legislature to raise taxes.

He also had an excellent article reviewing 1366 in the Sunday Seattle Times.

The Washington Research Council released an analysis of the measure last month. 

If I-1366 passes, legislators will have to either refer to voters a constitutional amendment enshrining the supermajority requirement in the constitution (and effectively protecting it from legislative meddling forever), or accept a reduction in the sales tax rate (which could be undone after two years with only a majority vote). The less permanent of the two options may be more attractive to legislators. But it is hard to see how the state could afford the loss of the sales tax revenue. Retail sales and use tax collections accounted for 46.6 percent of total state tax collections in 2014. Because the state is so dependent on the sales tax, the 1 percent reduction contemplated by I- 1366 would significantly impact the state budget.

The WRC concludes:

If the sales tax is reduced, the Legislature will have to find billions of new dollars just to continue the current level of services. While supporters of I-1366 presumably think that will encourage legislators to choose the constitutional amendment option, others may consider the crisis atmosphere created an opportunity to increase other taxes or levy entirely new ones.

Sunday the Everett Herald stated its editorial opposition to the I-1366. 

To our south, it looks like Oregon may have another big tax hike proposal on the November 2016 ballot. The Oregonian editorial board is not pleased by the prospect. Their editorial makes for good reading. Here’s how it starts:

How do you convince voters to support higher taxes? First, you make a compelling case for additional revenue. Next, if possible, you propose a tax that someone else will pay. To that end, it helps to create an “other,” as they say, an unsympathetic and perhaps even malevolent entity that not only can afford higher taxes, but also deserves them. More money and justice, all in one vote!

As they conclude, it doesn’t work that way. These decisions have real economic consequences. The “punish the other” strategy can be counted on to backfire.