'Queen Christine' and the Tax Revolt

Gov. Christine Gregoire is facing her next leadership test: the state's ongoing tax revolt. Tax cutters call the Democratic governor "Queen Christine," and their latest weapon against her rule is Initiative 912, an effort to roll back the gas tax enacted by the Legislature this year with prodding by Gregoire.

The opponents of I-912 need direction. As the pro-912 campaign begins to gear up, there are serious doubts about the prudence of mounting an opposition effort at all. Even among those who want to fight, there is disagreement about how to proceed. Gregoire will be key to the debate, because she is the only one who has sufficient clout with the diverse coalition of business, labor, and environmental groups that supports and helped pass the $8.5 billion transportation package. All that desperately needed construction will be mostly funded by an incremental gas tax increase of 9.5 cents over the next four years. I-912 would gut the list of improvements.

The tax revolt flummoxed our previous chief exec, Gary Locke. He and legislative leaders watched helplessly as a watch salesperson from Mukilteo, Tim Eyman, ran up incredible victories with harebrained, unconstitutional ballot measures year after year that hamstrung government's ability to make necessary public investments. In 1999, Initiative 695 slashed the motor vehicle excise tax (most of us call it "car tabs"). A judge tossed the initiative, but the Legislature cut the tax anyway. In 2000, by passing Initiative 722, voters embraced another unconstitutional measure—this one limiting the growth of property tax. Eyman hired a better lawyer the next year and wrote a constitutional measure, Initiative 747, which passed easily and now holds property tax increases to 1 percent annually—hampering local government's ability to deliver needed services. In 2002, voters destroyed local government's ability to maintain roads by passing Initiative 776, which cut counties' vehicle licensing fees. Things quieted down for a couple of years because Eyman had problems identifying easy tax targets and following campaign finance rules. Pundits began speculating that perhaps the state's anti-tax fever had broken.

They were wrong.

This year, despite her election woes, Gregoire showed genuine leadership by pushing hard and successfully to get the $8.5 billion transportation package through the Legislature. About $5.5 billion is raised by a 9.5-cent incremental increase in the gas tax, bringing the state revenue per gallon of fuel to 37.5 cents in 2008. The state constitution requires that gas taxes fund only highways and the Washington State Ferries, which are considered highways of the sea—not mass transit. Other revenue sources in the package include fees on driver licenses, motor homes, vehicle license plates, and the weight of certain vehicles.

The new transportation taxes will pay for 274 projects around the state. The most important investments are in 30 structures that are at risk of collapse, including $2 billion for the Alaskan Way Viaduct along Seattle's waterfront and $500 million for the state Route 520 Evergreen Point Floating Bridge connecting Seattle and Bellevue. Next in importance are 106 safety projects to improve highways with high accident rates. The package also includes passenger rail transportation, environmental projects, freight mobility, and congestion relief. These are necessary investments in state infrastructure. That is why Republicans, Democrats, corporate execs, labor leaders, and environmentalists support them.

A couple of guys on KVI-AM (570), Seattle's main right-wing talk-radio station, don't like the gas tax increase. Hosts John Carlson and Kirby Wilbur decided to try to repeal it using the initiative process. They had 30 days, relatively little money, a Web site, a bunch of volunteers, and a smart GOP political consultant, Brett Bader. But nobody thought they could gather enough signatures in time. Even Eyman didn't. Bader says the campaign collected more than 500,000 signatures in just over a month.

The tax revolt is alive and well. Gov. Gregoire's legislative director, Marty Brown, sums up the public mood: "We want to have improvements, but we don't want to pay for them."

Contrary to popular wisdom, the tax revolt is not confined to the rural areas of Eastern Washington. Tax-cut fever rages throughout Western Washington, too. Eyman's successful initiatives have all won in Pierce, Snohomish, and Clark counties.

If Gregoire cannot figure out how to address the tax revolt, the state cannot move forward with necessary transportation investment. Not only will the economy suffer, people might get killed when the viaduct collapses. Politically, if Gregoire can't figure out how to take on the tax cutters, she cannot govern as a Democrat. She will end up either helpless or Republican lite, as Locke did in 2003 with a no-new-taxes budget.

So what should the governor do? Her first task should be to persuade the businesses that oppose I-912 to fund a campaign against it. Right now there is no official opposition. Instead, a group of opponents that includes Boeing, Microsoft, Pemco, Vulcan, Washington Mutual, Puget Sound Energy, the Association of General Contractors of Washington, the Washington State Labor Council, the Washington Conservation Voters, and others has commissioned a statewide poll to find out what the voters think about I-912 and transportation.

Last week, another business alliance, including members of the Greater Seattle Chamber of Commerce and the Downtown Seattle Association, released a poll that focused on Seattle voters and the monorail debacle, but it had important implications for I-912. To defeat the measure, campaigners figure they need a "no" vote of around 70 percent in Seattle. There was fear among I-912 opponents that Seattle voters were so disgusted with the meltdown of the monorail that they would express their anger by voting in favor of repealing the gas tax. But the survey showed that while Seattle voters want to kill the monorail, they still support the statewide gas tax increase, 68 percent to 13 percent, with 19 percent undecided. Nationally renowned pollster Peter Hart, whose firm performed the survey, says this is very strong support. "The voters are willing to look ahead in such a progressive way on transportation," he says.