From the Director: Initiative 864 Signature Gathering Falls Short
By Stan Finkelstein, AWC Executive Director
No further property tax reduction mandated for 2005.

As has been previously reported, Initiative 864 will not be on the ballot in November! Tim Eyman, sponsor of the initiative, reported that I-864 only collected 157,000 of the required 197,000 valid signatures necessary to put an initiative before the voters. As most local officials are aware, the intent of the initiative was to arbitrarily reduce local government’s nonvoter approved property tax capacity by 25 percent, effective for 2005. The reduction would have been in addition to that of Initiative 747, approved in 2002, which reduced the growth rate of property taxes to 1 percent.

It should be noted that Eyman’s failure was not just a stroke of good luck. It was a result of the fact that the Washington Library Association, the unions representing city and county employees, law enforcement officers, and firefighters, and others marshaled an effective "decline to sign" campaign. That campaign deterred voters from signing the initiative. They frustrated the paid signature gatherers and effectively succeeded in assuring that I-864 would not reach the ballot. We owe a debt of gratitude to those parties who frustrated Eyman’s efforts, but must recognize that he is persistent and has already indicated a likelihood to re-file a version of I-864 next year.

Streamlined Sales Tax Update

The ability to impose state and local sales taxes on remote commerce continues to be a priority for the Association. It has been recognized that if there is to be any chance of success, Washington will have to have enacted state legislation consistent with a national model that reduces the "unreasonable burdens" imposed on out of state retailers.

Key to achieving that objective is resolution of the "sourcing" conflict. Sourcing refers to whether the jurisdiction of origin or that of destination receives the sales tax on purchases shipped from one jurisdiction to another. That determination applies to both existing in-state sales as well as those arising from remote commerce. Under current law, the sales tax is credited to the destination of origin, unless installation is required. Under the proposed national model, the sourcing rules change to give the destination jurisdiction the sales tax.

It is anticipated that during the next several months, the 12-member AWC Streamlined Sales Tax Task Force will endeavor to arrive at a workable solution that is both consistent with the national model and provides relief to those cities and towns most adversely impacted by "sourcing."

General Observations

Legislative activity in Olympia has essentially gone into "stall mode." Traditionally, legislators tend to focus their energies on their re-election in the months preceding the primary and general election and don’t spend much time addressing legislative issues. However, some interim work is being undertaken in the transportation and judicial areas, as well as a number of others. In other sections of the Bulletin, AWC lobbyists report on several specific areas that are being examined during the interim.