A reality check for the Democrats: Eyman's two-thirds tax rule is popular. With Democrats.

Last week, PubliCola sat down with state Sens. Lisa Brown (D-3, Spokane) and Ed Murray (D-43, Seattle), the senate majority leader and ways and means chair, respectively, and basically the leaders of the liberal Democrats in the senate. (Those who are fans of Sen. Sharon Nelson and her co-conspirator from the left, Sen. Maralyn Chase, please note that they don't call the shots.)

We covered a lot of ground with Sens. Brown and Murray—see their comments on gay marriage, Rob McKenna, Jay Inslee, and the tunnel here and here.[pullquote]We in Seattle have to figure out how we reconnect ourselves to people who are living in suburban tract houses who vote for Democrats, but vote against taxes.—Sen. Ed Murray[/pullquote]

But the two Democratic senate leaders mostly talked about the central issue that's looming for the Democratic party: How do they write Democratic Party budgets (to fund human services and education) in a recession with a tax system that relies on the sales tax—which is both dwindling and regressive?

The discussion took off from there. Sen. Murray got philosophical about navigating the political eccentricities of the West: "We live in the West, where there's a bias against electing Republicans, and a bias against voting for taxes." And he also identified what he believes will force structural change in the tax system.

PubliCola: Are you ever going to be able to raise revenue so you don't have to do all-cuts budgeting?

Murray: Since the economy crashed, we have lost $15 billion in anticipated revenue. That simply could not be replaced by taxes alone. It is a massive amount. [Editor's note: We're already looking at $387 million less in revenues for the next budget cycle.] Secondly, we did raise taxes [on candy, soda, and  bottled water], and the voters dramatically rejected that [by passing I-1107]. We are also seeing a state that seems very blue ... but remains anti-tax. That's a real hard one to get over. Districts that didn't vote for Tim Eyman's initiative last time [I-960], voted for Tim Eyman's initiative this time [I-1053]. Democratic districts. We live in the West, and there is a bias against taxes [and a] bias against electing Republicans.[pullquote]It was kind of sad, really, that the debate of the session around education was how to lay off teachers, not why aren't we preventing the layoffs of teachers.—Sen. Lisa Brown[/pullquote]

We had five legislative districts that supported [Initiative 1098, 2010's high-earners income tax initiative to fund education]. Those were in the city of Seattle. All those other Democratic districts, mostly working-class districts, not very affluent---they voted against us. We in Seattle, in the progressive movement, have to figure out how we reconnect ourselves to those working middle-class, lower-middle-class people who are living in suburban tract houses, who vote for Democrats, but vote against taxes.



Sen. Lisa Brown

Brown: "Taxes to support government" gets a "No." Specific revenue sources that people know what they mean to them, to support specific things that they believe in, often gets a "Yes." A tenth-of-a-cent sales tax in Spokane County—not the city, the county—passed for mental health. Our conservation property tax passed and was renewed in Spokane County. The specific revenue source, the specific thing you're going to spend the money on, you've got to make a really good case. The public needs to believe that there's not other money being wasted somewhere. It's part of our culture, and it's part of talk radio culture, to hold up something that somebody spent money on and it seems like a waste. That's a constant challenge.[pullquote]I think it's K-12 and higher ed that will eventually force the business community to discuss new revenue and a different tax structure.—Sen. Ed Murray[/pullquote]

PubliCola: The house took a vote to set up the legal staircase to challenge Tim Eyman's two-thirds rule [I-1053].  Are you guys on board with that?

Brown: I'm not involved in it. The senate's not involved in it, but my understanding is that there will be some kind of lawsuit.

PubliCola: Do you have a strategy to challenge the two-thirds rule?

Murray: We talked about a measure allowing us to close tax loopholes with a simple majority, referring out that part of Tim Eyman's initiative. We were hearing from various stakeholders—progressive labor unions, human service groups, education groups—that it wasn't polling well. They weren't sure this was something they wanted us to do because they weren't sure they could pass it. There were key stakeholders, after last year's loss, who were not interested in spending money on a campaign.

Brown: The structural imbalance where you can pass a tax exemption or expand a tax exemption with [a simple majority], but if you want to reverse that you need [two-thirds], seems patently unfair to me. But there's a very strong anti-tax sentiment out there.

PubliCola: What is the strategy for tax reform? You were very hot on the idea of an income tax two years ago.

Brown: Tax reform is something the state will have to take on at some point because our tax structure is so out of sync. Even the business community ... gets that and eventually should become part of the coalition to make some of those more substantive reforms, but the initiative [a high-earners income tax to fund education, I-1098] failed. It failed dramatically, and that sets that discussion back a while. I think it does.

It was kind of sad, really, that the debate of the session around education was how to lay off teachers, not why aren't we preventing the layoffs of teachers. So that was the sad reality—how to do it instead of why are we allowing this to go forward. Laying off teachers is what we ended up doing.

Murray: I think it's K-12 and higher ed that will eventually force the business community to discuss new revenue and a different tax structure. We can't do the things they want us to do in education given the revenue structure we have. I think education is the issue that will force them to realize that our consumer-based retail sales tax way of funding things is not going to work any more. The economy has restructured itself in a way that that will not be a viable revenue source.