Lobbying Olympia for Fair Taxes

Steve Zemke and I went to Olympia on Friday and met, briefly or longer, with about a dozen legislators, including Maralyn Chase, Bob Hasegawa, Gayle Tarleton, Frank Chopp, Reuven Carylye, Cindy Ryu, Joe Fitzgibbon, Judy Clibborn, and Tana Senn.  We spoke about tax fairness and accountability for tax loopholes. We had in-depth discussions with a few of the legislators.

We presented to various legislators, and their aides, the list of signers of the MoveOn petition Let’s fix our unfair tax system in Washington State.   Statewide over 3900 people have now signed that petition. Many of the signers wrote passionate and incisive comments, which you can read here; we gave to the legislators and aides comments from their constituents, broken down by LD.

Steve Zemke spoke with legislators and aides about his idea for a tax expenditure budget, which would require the legislature biannually to approve or reject the many tax preferences on the book.  Every year JLARC (the Joint Legislative Audit &Review Committee) makes a report and recommendations on tax preferences.  But the legislature rarely acts on these recommendations. Current practice is to let the tax preferences continue forever; the legislature isn’t required take a vote on whether to continue any of them.

Senator Chase has submitted a tax expenditure budget bill, SB 5938, which is still alive but is getting little attention in the state Senate, due to the ascendancy of the so-called Majority Coalition, under control of Rodney Tom and the Republicans.

We are hoping that House leaders will promote the idea of a tax study commission and that the Senate will go along with it.

The commission would evaluate our inadequate and unfairly regressive tax system and make recommendations concerning issues such as a carbon tax (regressive), the gas tax (regressive), and a capital gains tax.   Next year there is likely to be a carbon tax on the ballot; the carbon tax will likely be “revenue neutral” because that is likely the only way to garner support from Republicans and conservative Democrats. See Carbon Washington.

Along similar lines, one idea that might be considered is to pass a revenue-neutral tax shift from the sales tax and the B&O tax — both of which are regressive — to a capital gains tax.   Such a tax shift wouldn’t address the need for more revenue (e.g., to fund K-12 education, per the McCleary Supreme Court decision), but it would make our tax system more fair.

The commission might be modeled after the 2002 Gates Commission: Tax Alternatives for Washington State: Report to the Legislature. The Gates Commission was authorized by the legislature in Section 138, ESSB 6153, with these committee members.

We also attended a Finance Committee work group meeting, which discussed accountability for tax preferences.

House Finance Committee

Dana Lynn of JLARC showed a spreadsheet comparing the information various states collect and publish, online or offline, about the performance of tax preferences.

Sixteen states do no evaluation at all of tax incentives.  Washington State is one of nine states that reviews tax incentives, although it rarely acts on the reviews.

Greg LeRoy, Executive Director of Good Jobs First, testified remotely about Making Economic Development Tax Credits Transparent. His group analyzed 240 “megadeals” in which state legislatures gave away $75 million or more in tax preferences.  The number of such giveaways has risen sharply since 2008.  The average cost to the state  per job is  $465,000.  The Boeing tax break is the largest given to date. But there are hundreds of older tax breaks.

LeRoy gave Washington a grade of D for transparency, D- for Job Creation/Quality, and D+ for Enforcement/Clawbacks.

The testimony to the Finance Committee on tax accountability is available on TVW here.

We heard Tim Eyman defend tax advisory votes at a Government Operations & Elections Committee hearing. Critics of the tax advisory votes have characterized them as push polls paid for by the taxpayers to promote his anti-tax positions but that have little real value.  The Clark County auditor testified against tax advisory votes.

Tim Eyman thinking

Reuven Carlyle challenged some of Eyman’s facts about whether legislative actions actually raised taxes. Carlyle said two of the votes did not actually raise taxes. But Eyman ignored the question and responded with boilerplate anti-tax rhetoric. Nobody asked a follow-up question We thought that committee members were suspiciously polite towards Eyman.

To people like Eyman, ending tax breaks for rich corporations is equivalent to raising taxes.

Steve Zemke is former Chair of the King County Democrats and is current director of Tax Sanity.

Zemke and I made a similar trip to Olympia on Nov 7, when we met with a smaller number of legislators and for 40 minutes with three of Gov. Inslee’s budget aides.

To participate in a discussion forum on the topic of fixing our unfair tax system, please visit the following google forum:

Report on the 2013 Legislative Review of the Metroplitan Democratic Club of Seattle

Wednesday four solidly progressive Democratic lawmakers were guests at the Metropolitan Democratic Club of Seattle: Senator Jeanne Kohl-Welles (36th LD), Senator Bob Hasegawa (11th LD), Representative Cindy Ryu (32nd LD), and Representative Gael Tarleton (36th LD).

Senator Jeanne Kohle-Welles
Sen. Jeanne Kohl-Welles
Senator Bob Hasegawa
Sen. Bob Hasegawa
Rep. Cindy Ryu
Rep. Cindy Ryu
Senator Gael Tarleton
Rep. Gael Tarleton

Ryu and Kohl-Welles are the two most progressive legislators in the House and Senate, according to the House scorecard and Senate scorecard.

Senator Kohl-Welles characterized the session as being full of “palace intrigues”, “high drama”, “charade”, “arrogance”, “duplicity” and “rhetoric, not action.” She said the Republicans had a Pyrrhic victory. In the Senate they set the agenda. They had the major chairmanships. All because 10 or 12 core conservatives held out.  They blocked the House’s Dream Act (education for children of immigrants), a Gun Safety act, a Toxic Toys bill, the Reproductive Parity Act, and the transportation bill that would have funded Metro buses and would have allowed localities to raise taxes to fund transportation.  “We had the votes in the Senate but couldn’t get them up to a vote.”

But the Dems blocked the Republicans’ pernicious bills.

Dems had to put up with so much crap. On the first day, the Majority Coalition in the Senate (the Republicans and turncoats Rodney Tom and Tim Sheldon) made a major change to Senate rules, for the first time in decades.

The Dems, including Sen. Ed Murray, tried to force a vote on the Dream Act and Reproductive Parity Act, using a mechanism called the Ninth Order, but “The motion failed 25-23 with Tom—alongside [so-called] pro-choice Republican Sen. Steve Litzow (R-41, Mercer Island) and Democratic Sen. Jim Hargrove (D-20, Hoquiam)—voting in place of his seriously ill friend, Sen. Mike Carrell (R-28, Lakewood)—casting ‘No’ votes on Murray’s motion to move to the Ninth Order.” (See Sen. Tom Votes Against Ninth Order Motion, RPA and DREAM Act in Peril.)

Dems got six, minor committee chairs. Several Road Kill conservative Dems took some of the chairs. Some progressive lawmakers refused.

Lieutenant Governor Brad Owens, who in the past has come under criticism for his timidity in opposing Tim Eyman initiatives, was this time a hero to Democrats. Several of the panelists lauded Owens, who was furious at the Majority Coalition’s tactics.

Senators Hasegawa and Marilyn Chase were allowed to bring some great bills to the Senate committee, under the mistaken impression that Rodney Tom and the Republicans would allow an honest discussion. Instead, Rodney Tom used the bills as opportunity to ridicule Democrats, making press releases critical of the billions of dollars that Democrats want to spend.  Tom tried to blame Kohl-Welles for the failure of the Dream Act (because she didn’t accept the Higher Ed chairmanship). She demanded that Tom’s words be removed from the website. They were removed.

A disturbing event this year was that hard-core conservative Don Benton won his seat by just 74 votes. He probably would have lost the race if the Senate Democrats Campaign Committee chair, Mike King, hadn’t (allegedly) embezzled $300,000.  Hard to swallow. [I am unable to find articles about this alleged embezzlement. I think Cindy Ryu for providing these links to coverage on the allegations:  See Breaking: State SDCC Director Under Investigation for Stealing Party Money and here.]

Senator Benton receives significant funding from a Mercer Island family that owns usurious payday lending outlets.   In recent years the number of pay day lending outlets, and their revenue, have dropped, due to past legislative reforms.  But the payday lending forces are fighting back.

For more on Benton, see Allied with ALEC: Washington State’s “Dirty Half-Dozen”.

Rodney Tom won’t be easy to dislodge.

Concerning the upcoming negotiations to pass a belated transportation package, the panelists said that Republicans will demand trades (compromises).  Cindy Ryu said, “Hopefully we won’t have to sacrifice bike lanes.”

Senator Benton didn’t want funding for the Columbia River crossing and was willing to sacrifice $450,000,000 in federal money for the project.

One problem with Republicans is that Republican legislators who go against the will of the caucus are often threatened with a primary challenge. There are in fact some moderate Republicans (e.g., Pierce Co. legislators who want funding for Route 167 and who wanted to vote for the transportation package), but the Republican caucus pressures them not to vote with the Democrats.

Several of the legislators reported on some minor legislative victories that involved little revenue, like lowering speed limits, protecting the security of master apartment keys, and allowing wine and beer sampling at farmers markets.

Rep. Hasegawa said that as soon as the Republicans got control of the Senate they put forth a bunch of ALEC bills, which had no chance of passage in the House.  One of the bills, the Training Wage bill, would have allowed employers to offer jobs at below minimum wage. They pitched it as if it would help youths land a first job, but the text of the bill didn’t say it was limited by age.

Another Republican bill went after Family Medical Leave.

Hasegawa served as ranking Democrat on the Government Operations committee.  The chair was Senator Pam Roach.  He said that he deserves hazard duty pay. It was entertaining. People came to hear the show.  He was also on the Ways & Means. There the Republicans were totally out of control.  You could literally hear yelling and screaming behind the Republican Caucus’s door. (Senator Kolle-Welles concurred.) Each vote mattered and so there was hard bargaining within the Republican caucus.   The first legislative session was dysfunctional due to the Republican infighting. The Senate met in session only once. There was no floor action.

Hasegawa said that the Dems had done a workshop training on power.  He thinks the Dems’ mistake was to try to work with the Republicans in a bipartisan way [because the Republicans had no intention of compromising? Because the caucuses were too far apart?].  We handed power to the Republicans over the need to raise revenue.  Democratic Sen. Hargrove gave his vote to the Republicans on an important procedural matter.

Dems raised some new revenue, “but not really.” We closed some loopholes that had been opened by (technical) Supreme Court rulings, to the order of $600,000,000. But this was not really new revenue. And in order to close those loopholes, we had to open new ones.  Dems had to agree to suspend cost-of-living increases for teachers again.   There were budget gimmicks, like the Public Works Assistance budget counting on case loads being unrealistically low.

(On this issue of revenue, I had earlier had a discussion on Ross Hunter’s facebook page, in which I questioned his claim that the legislature had really raised a billion dollars in new revenue. See also Fact checking the Washington Policy Center’s claims about education funding.)

Republicans are very good at messaging: scaring and misleading the voters about taxes and about alleged government waste.  The Republicans’ message is short and easy: Cut Taxes. Democrats have more difficult messaging hurdles. Still, a majority of Washingtonians support our policies.

Rep. Ryu said we need to message the hip and young crowd. Too many people believe in fairy dust. At a meeting with students, everyone said they want more educational programs to benefit students.  But when asked, “Who wants an income tax?” few people raised their hands.

On next year’s elections, Andy Hill in the 45th LD is vulnerable. Pam Roach is up for election next year.  Tracy Eide will have a tough race. This year Control of the Senate depends on the race beween Nathan Schlicher and Jan Angel.

SB 5029 – Creating the Washington investment trust update


We need a state bank. Not much good will come out of the legislature this year, but we must continue to push the state bank idea forward. We can make our money go further, reduce state debt, and keep investing in our own state economy. It doesn’t hurt that this bill would take our dollars out of the “too big to fail” banks.

Forward, and thanks to Senator Hasegawa for sponsoring the bill,

Begin forwarded message:
From: “Hasegawa, Sen. Bob” <Bob.Hasegawa@leg.wa.gov>
Subject: SB 5029 – Creating the Washington investment trust update
Date: February 25, 2013 5:19:47 PM PST


I’d like to update you on my legislation to create the Washington Investment Trust. As you know, Senate Bill 5029 would create a state bank that could leverage state accounts to generate funds to build additional construction projects, such as infrastructure for schools and economic development, and put more Washingtonians to work.

Unfortunately, despite strong testimony by stakeholders in favor of the measure, my bill died in committee last Friday, the last day for policy bills to be moved forward in the legislative process. While I’m disappointed, I’m not discouraged. The end of a legislative session doesn’t mean the end of a bill, and support for this proposal continues to grow. It’s not uncommon for a bill to take several sessions to win passage, and I’m committed to pursuing this concept no matter how long or how much effort it takes to a successful conclusion. It’s obvious we have much more organizing work to do.

In the meantime, I want to thank you for your interest in this legislation and to encourage you to continue to lend your support to the effort to create a state bank. Together, we will get there.

Bob Hasegawa
Senator Bob Hasegawa
11th Legislative District

To sign up for my E-newsletter click here.

State Bank hearing Feb 14 in Olympia

Chio Saeteurn, Legislative Assistant to State Sen. Bob Hasegawa reports:

On behalf of Senator Hasegawa, I am pleased to inform you that SB 5029, Creating the Washington investment trust, has been scheduled for a public hearing on Thursday, February 14th at 1:30 pm in the Senate Committee of Financial Institutions and Housing & Insurance, Senate Hearing Room 2 in the Cherberg building.

At this time, we do not yet have a companion bill in the House of Representatives.

Please attend.

Action: Support the Senate's Washington Investment Trust bill

Senator Hasegawa has introduced a bill in the Senate.  #5029   The bill has 10 co-sponsors: Chase, Shin, Conway, Rolfes, Darneille, Hargrove, Keiser, Kohl-Welles, Kline and Frockt.   It has been referred to the Financial Institutions & Insurance Committee.  There was no hearing date as of today 2/4/13.  You can find a copy of the bill here: http://apps.leg.wa.gov/billinfo/summary.aspx?bill=5029&year=2013

Put “SB 5029 Washington Investment Trust Hearing Wanted” in the subject line of the email.  Please email these Senators and say that you want a hearing on Senate Bill 5029 establishing the Washington Investment Trust.  In the body of the email ask when there is going to be a hearing on SB 5029 establishing the WIT.    There is a large constituency that wants this bill to pass.

Steve Hobbs   D     44th District  (Lake Stevens)  Steve.Hobbs@leg.wa.gov

Don Benton    R   17th District (Vancouver)   Don.Benton@leg.wa.gov

Joe Fain    R     47th District (Auburn, Renton)    joe.fain@leg.wa.gov

Brian Hatfield    D  19th District (Raymond)            Brian.Hatfield@leg.wa.gov

Mark Mullet      D   5th District (Issaquah)  mark.mullet@leg.wa.gov

Sharon Nelson  D  34th District (West Seattle, Vashon)   sharon.nelson@leg.wa.gov

Pam Roach    R   31st District (Auburn)   roach.pam@leg.wa.gov

Notes on the Washington Investment Trust Forum

Co-authored with John Repp, both members of Washington Public Bank Project

For those of you unable to attend the forum last Thursday, Sept 27, 2012 sponsored by PSARA -“Would a State Investment Trust (AKA a public bank) Benefit the People of Washington”? We submit here our notes and comments. The forum was very well attended. Interest in the idea of a public bank remains high.

The three person panel was introduced by Robbie Stern, chair of PSARA.

Rep. Bob Hasegawa spoke first and he told us that the new bill for the upcoming legislature will focus on funding infrastructure in our state. The name of the public bank will be the Washington Investment Trust (WIT), same as last year. He said we need to use Washington tax money locally and for the benefit of the citizens of our state. He sees the WIT as a long term project for the future of our children and grandchildren. It will not get us out of the current recession. It is a step to get out from under the Wall Street Banks.

Jim McIntire, the state Treasurer, spoke next and began with the phrase, “the Treasurer’s Office is the ‘state bank’”. We think this shows 1) either he is being deceptive with the word “bank” or 2) he really does not understand the privileges a real bank has. He went on to talk about the good job that the Office of the Treasurer(OST) has done in investing and managing the state’s money. Later on when he makes the claim that we do not have enough cash flow to start a bank, this claim contradicts his statement that his office has invested and has earned billions for the state. If we don’t have enough cash flow to start a bank, where does his office get all the cash to invest and earn returns for the state? We are talking about the same money. ( For those of you who think we can solve the problem of Jim McIntire by elected a new Treasurer in 4 years, be aware that as soon as the Treasurer of Oregon got even close to working with the movement there to establish a public bank, he faced massive criticism from his fellow treasurers at the first national meeting of State Treasurers he attended.)

McIntire said that his main concern is “safety, liquidity and return.” We agree. On “safety”, the third speaker, Darel Grothaus told us that in 30 years there has not been default on public infrastructure bonds in this state. Therefore, if the WIT loans money to fund infrastructure, the funds will be safe and those loans will be carefully scrutinized for safety. The plan is for the WIT to follow good banking practices, be audited each year and follow guidelines set forth by the Department of Financial Institutions.

On “liquidity” McIntire does not seem to understand that managing liquidity is what banks do. A retired Bank of North Dakota official told us this spring that Treasurer McIntire simply does not understand how banks maintain liquidity as they deal with deposits flowing in and out of depositors accounts. That official told us off the record that he felt the opposition by State Treasurers to the public bank concept is primarily a “turf” thing.

McIntire told us that his office primarily invests in Federal Government Securities that can be sold at any time if the State needs the money. There is also a guaranteed return. Here we see the real difference between a public bank and an Office of the Treasury. The WIT will fund infrastructure projects, schools, sewers, water systems, roads and bridges here is Washington State. The current Office of the Treasury invests in paper i.e. Federal Government Securities and short-term CD’s.

When Darel spoke next, he repeated the idea that Washington State taxes need to be invested here at home in public infrastructure. Currently, the government jurisdiction, say school board, water district, city, county or an agency of the state must go to the private bond market to borrow money for the project. The Wall Street Banks underwrite the bonds i.e. loan the money. There are significant upfront fees as well as the interest on the loan that the jurisdiction must pay. The Washington Investment Trust (WIT) would be a short term revolving lender for these projects. He believes that the Office of the State Treasurer’s core portfolio can be used for infrastructure construction loans without endangering cash flow and the liquidity needed to pay current obligations. There are ways to calculate how much of this core portfolio could be used and still maintain liquidity. Darel emphasized that state and local government borrowing costs can be significantly reduced and the state can get a better return on investment compared to bond financing. If the state charged only 1% less interest, the savings to local government would be huge and the WIT would earn the interest instead of the Wall Street Banks. The creation of jobs in this state must be part of the calculation of “return”. For example a billion dollar loan for a sewer project could produce 13,000 jobs. And when that loan is repaid with interest the WIT could again leverage that money to create more loans and more jobs. So, on “safety, liquidity and return” the WIT is a better way for our state.

In the Q and A session, Jeff Johnson of the WA State Labor Council spoke about the support from labor unions for a WIT. He asked the Treasurer to use his expertise to help in finding a way to allow the State to keep its money local through a WIT and to use that money to make loans and create jobs.

An audience participant who is also a financial advisor said that she had looked into having some of her clients buy Washington State bonds when they were offered by the state. What she found was that the bonds were underwritten by the big Wall Street Banks and after their fees and the way the bonds were structured, only sold in large denominations, her clients, when and if they were able to buy them, would get very little return and that the Wall Street banks got the major benefits. She could not recommend to her clients that they buy WA state bonds. Her question to the Treasurer was, “Why can’t we think outside the box, do something different, how can we make a WIT possible and viable?”

Larry Brown from the Machinists Union wondered if the WIT could help bring another airplane company to Washington as a competitor to Boeing. Senator Marilyn Chase told the group that the University of Washington has an internal bank. The legislature gave the U of W bonding authority a few years ago. In effect, public banking already exists in this state and we have not heard McIntire speak out against this.

It was mentioned by several people that we need to get out from under the Wall Street Banks. Bank of America has foreclosed illegally on Washington State citizens, backs war, backs coal, and cares nothing for the people but only about profit. Why do we keep using it to collect our tax money? (B of A is contracted by the state to collect all the taxes and fees for the state). The mood of the crowd was in favor of the WIT and they wanted the help of the Treasurer to make it possible. However, legislation will be introduced once again this legislative session and we will work state wide to make a WIT happen. Stay tuned, there will be some actions to take as the session draws near.


Bob Hasegawa Fundraiser: Thursday, Aug 2 in Seattle

Bob Hasegawa for State Senate 2012- 11th Dist. (D) 
Bob Logo
Dear Friends,
We invite you to help us get Bob Hasegawa elected to the State Senate by sharing a piece of Seattle’s Japanese-American history.
Join us for a meet-&-greet fundraiser:
605 S Main Street
Seattle, WA 98104
Thursday, August 2,
from 6:30 – 8:30 pm


Hosted by:
Craig Salins, Executive Director of Washington Public Campaigns
Co-Hosted by:
Paul Bigman of IATSE, Local 15
Cindy Cole of the Just Sustainable Economy
John Repp of the Public Banking Institute
Together with:
Jan Johnson Historian/Owner of the Panama Hotel Tea & Coffee
Following the reception at the coffee house, there will be a tour of the historic Panama Hotel (made popular by the internationally bestselling book, Hotel at the Corner of Bitter & Sweet, by Jamie Ford) & it’s traditional Japanese bathhouse.
RSVP to Craig at craigsalins@gmail.com
Forwarded email from Cindy Cole:
Consider what Bob Hasegawa fights for —
  • A state (publicly-owned) investment bank (such as the Bank of North Dakota), so that our tax dollars are invested for local projects and jobs – not siphoned off for Wall Street’s profit.
  • Public financing of campaigns – so that elected officials are beholden to voters, not to special interests.
  • Tax policies based on fair share – not loopholes protected by high-powered lobbyists.
  • Budget priorities that reflect community needs.
  We need to boost Bob Hasegawa into the Washington State Senate with wide popular support – to enhance his voice of leadership.
  Please join me in supporting Bob’s campaign!   Thursday, August 2nd, at the historic Panama Hotel, 6:30 PM to 8:30 PM.  Address and details below.
  If you are unable to attend that evening, please consider a contribution to Bob’s campaign – to show your support.
  Campaign website: http://bobhasegawa.com/     Facebook site: https://www.facebook.com/BobHasegawa

Bob Hasegawa Campaign kickoff — Sunday, April 22

Haegawa campaign kickoff

Bob Hasegawa campaign kickoff for State Senate race
Sunday, April 22 at 1:30PM
12424 42nd Ave S (in the Banquet Room)
Seattle, WA

Bob Hasegawa is one of the most progressive people in the state legislature.  We need more like him, and have an opportunity to thank him for his staunch support for healthcare, education, clean environment, progressive taxation, public banking, and informed democracy.   Let’s give him a little power boost into the senate!