Broad Coalition Backs Two-Thirds Vote for Taxes, but Oil Money and Eyman Make an Easy Target

By Erik Smith

Staff writer/ Washington State Wire

OLYMPIA, July 26.—This might seem a little strange to anyone who has been paying attention to Washington politics over the last 20 years or so, but a ballot measure that aims to make it harder to raise taxes turns out to be a wicked new scheme to bail out big oil companies.

            Well? That’s what they’ve been saying on activist websites for the last couple of weeks, anyway. Lately the message has been picked up and repeated by sympathetic media outlets. And it looks as if we’ve discovered the big argument that will be lobbed at Initiative 1053 this year. It's a great big gooey tarball of a charge that aims to link one of the longest-running political crusades in this state to that recent bit of nastiness out in the Gulf of Mexico.

            Initiative 1053 would require a two-thirds vote of the state Legislature before taxes can be raised. In today’s political climate, that’s practically a guarantee it won’t happen. That would take Republican votes, and the GOP is holding firm.

            But activists are saying I-1053 is really a back-door maneuver to prevent a steep tax increase on oil refiners. That's been one of their top priorities in the last two legislative sessions.

            And it’s really a remarkable argument, once you take a close look at it. One reason is that the idea behind I-1053 has been around a bit longer than the oil tax. The first time Washington voters approved the concept was 1993, and they've done it twice since then. The rule keeps coming back because lawmakers keep chucking it out, whenever it becomes both possible and expedient.

The argument also presents a stunning reversal from the position the environmental groups took last year before the state Legislature. In 2009 they declared that the two-thirds vote rule can’t stop the oil tax. Now they say it does.

And finally, it overlooks one of the most interesting things about I-1053. Although the campaign got a big chunk of change from the oil industry, it accounted for only about a fifth of the $1 million that was raised. That’s nothing by comparison with the other five initiatives heading toward the ballot this year. Of all the initiatives, I-1053 has the grassiest roots of the bunch.

So what’s really behind the new message?

Perhaps it's the resentment that still seethes over the defeat of the oil tax. Even if the argument isn't altogether coherent, there is an element of truth behind it, just like there is in any political charge. Certainly the green gang is having fun with it. And the measure’s biggest supporters admit privately that they may have given the opposition an easy target.

            An Unholy Alliance

The argument starts with a couple of facts. Four oil refiners contributed $215,000 to I-1053. Some $65,000 came from everybody’s favorite oil company at the moment, BP.

Now add to it that the measure was filed by Tim Eyman, the state’s leading promoter of conservative-themed initiatives. The name alone is enough to send shivers of revulsion through a certain segment of the voting public. But Eyman and BP together? It doesn't get much worse than that.

Which makes some of the invective pretty funny. Take this headline from The Stranger, an alternative newspaper published in Seattle:

“Who’s behind Tim Eyman’s big new tax initiative? A little company called BP. Yeah, that BP. Perhaps you’re familiar with their work?”

This comes from a column that appeared on the Seattle Post-Intelligencer website:

“It’s a grease job for Big Oil, a minority rule measure that lets BP and Tesoro and ConocoPhillips evade paying for pollution.”

If you Google the terms “Eyman” and “BP,” you can see how it all got started. Just after the fund-raising figures turned up on the state Public Disclosure Commission website July 13, the first blast appeared on the Northwest Progressive Institute blog:

“One of the world’s greediest, [most] careless and most despised mega-corporations has just today been revealed to be one of the top financial backers of Tim Eyman’s latest scheme to wreck representative government in Washington state. Yes, you read that correctly: BP, the company responsible for the biggest environmental disaster in American history, is now underwriting Tim Eyman.”

            Almost immediately the message began to show up on other blogs. This is from one titled “Eat the State:” “The idea of Eyman and BP making common cause is just so unfathomably icky that it needs to be publicized, as far and wide as possible.”

And a somewhat more measured attack came from Sightline, an environmental advocacy website. It called the measure a “Trojan horse for the oil industry,” and concluded, “It's the BP Protection Act: an assault on majority rule that lets the oil industry off the hook for polluting Northwest waters. A tar ball of a public policy, Eyman's I-1053 is ugly and destructive. It stinks.”

Sounds pretty damning, doesn’t it?

Numbers Say Something Else

The actual fund-raising reports tell a rather different story. If the implication is that the oil industry bought and paid for the initiative, the same special-interest financing charge can be made about every other initative on the ballot this year. And it can be made with considerably more justification. Take I-1098, the income tax measure that is supported by many of the same liberal activist groups that are denouncing I-1053. The Service Employees International Union contributed $280,000 toward the income tax campaign, more than the entire oil industry combined, and a single wealthy contributor, Bill Gates, Sr., put up $100,000.

On three of this year's initiatives – I-1100, I-1105, and I-1107 – one or two contributors put up more than 90 percent of the cash. And on one of them, I-1107, the American Beverage Association, put up $2.7 million.

In fact, the reports show that I-1053 has the broadest support of any of the initiatives, with 1,400 contributors. That’s due largely to Eyman’s big grass-roots organization. Meanwhile, BP was the biggest business contributor, but there were many others that came close.

            This Year’s Message Versus Last Year’s Message

In their zeal to prove their case against “Big Oil,” the activists appear to be forgetting an argument they raised before the Legislature last year. Either that or they're admitting they were wrong.

It has to do with the oil-tax battle that has been going on in the state Legislature for the last couple of years. Environmental groups want to make the oil industry pay for Puget Sound cleanup. That's because it’s a costly project, and the oil industry has one of the deepest pockets around, because it can pass the costs on to the consumer at the pump.

The proposal died last year, but it’s sure to come back. The activists say the oil industry is backing I-1053 because it wants to block the tax hike. And this is the key point – they say I-1053 would do the trick.

According to the Sightline website, for instance, “If 1053 passes, the oil industry will guarantee itself a legislative victory. They’ll avoid paying their fair share for clean water in Washington, which might end up being tens of millions of dollars a year.”

The Northwest Progressive Institute states, “If Initiative 1053 passes and takes effect, then all the oil lobbyists have to do is to convince a third of each house (in other words, the Republican caucus) not to sign on any bill to raise the hazardous materials fee. And they can kill it.”

That’s an astonishing turnaround for the environmental lobby. Back in 2009, when the battle got started, another two-thirds-vote initiative governed the Legislature. That was I-960, which was suspended by the Legislature this year. The green groups told the Legislature the rule didn’t make any difference. They said the oil industry would be paying a “user fee,” not a tax, and so the Legislature could do anything it wanted. They didn't convince the Legislature to do anything, but that was the argument.

And if last year’s message was right, then this year’s message can’t be.

            Not Just Oil

It's wrong to say oil is behind it, said Gary Chandler, government affairs director for the Association of Washington Business. That's because the rest of Washington business deserves credit for it, too. Of course the oil industry wants to stop tax increases next year, he said. So does everybody else.

This year, for the first time, AWB offered an early endorsement of an Eyman anti-tax measure and formed an independent committee to support it, Citizens for Responsible Spending. Eyman couldn’t have made it to the ballot without the help. The AWB committee raised $300,000 from various business interests and paid the signature gathering company directly, rather than funneling it through Eyman’s campaign.

And that support will continue right up through November. What it means is that for the first time, an Eyman tax measure will have a professional organization behind it, albeit one he doesn’t control. That means we'll see TV ads, radio ads, direct mail – all the things that Eyman has eschewed in his decade-long career. Eyman typically hasn’t spent a dime promoting his causes once he gets the signatures. Until recently, the strategy worked. But last year the opposition spent $3.5 million and blew his I-1033 out of the water.

Chandler said business decided to back I-1053 after this year’s session was over, and Eyman’s campaign was already well-established in the field. The stakes are too big for business to ignore, he said. Next year the Legislature will face a $3 billion shortfall, and if this year was any indication, lawmakers will turn almost immediately to tax increases, rather than spending cuts. They faced an enormous shortfall this year, too. They raised taxes, he said, but they couldn’t bring themselves to junk the state liquor stores or the state printer.

“All of us in our businesses have had to take a look at our spending,” he said. “We don’t have as much money coming in. And how do we keep our people employed? We’re looking at our core values. I don’t know that government has done that yet.”

            A Fair Charge?

Is it fair to blast the oil industry for “backing” I-1053 when its contributions amount to just 21 percent of the total raised? Or when the company the Northwest Progressive Institute calls the “current champion in the ever-competitive ‘Most Despised Corporation on Earth’ contest” actually has contributed just 6.5 percent?

Of course it is, says Brendon Cechovic, program director for the Washington Conservation Voters. “It’s still a lot of money,” he said.

The thing about the oil contributions is that the motivation is so transparent, he said. “I’m sure they will try to do it quietly, but I’m sure there will be some backlash. But what you rather have? An increase in taxes or bad press for a couple of months? From their perspective it’s a smart move.”

Some wags in the business community suggest that it might have been smart to cut a deal in advance. If the insurance companies had given their money to I-1053, then the oil companies could have supported this year’s worker-compensation initiative. And then nobody could have complained.

But given the amount of bile being hurled these days at oil companies and Tim Eyman, it’s a safe bet that nobody’s feelings will be hurt by anything anyone has to say. Eyman says he just wishes folks would question the opposition the way they do him.

“I just think that in the bad-guy competition, I’m the bad guy compared to what? The people who are saying this have a vested interest in the current system. Nobody’s a saint, everybody’s a freaking sinner. It’s not like they have halos on their heads and we’ve got devil horns.”