Washington Unemployment Insurance, Referendum 53 (2002)

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The Washington Unemployment Insurance Referendum, also known as Referendum 53, was on the November 5, 2002 ballot as a veto referendum in the State of Washington, where it succeeded in overturning parts of a law recently enacted by the Washington State Legislature. The law that was partially overturned was about unemployment insurance for employers. It established new employer rate classes, increased some taxable wage bases, and imposed surcharges under certain circumstances.

Election results

Washington Referendum 53 (2002)
ResultVotesPercentage
Defeatedd No966,90159.22%
Yes 665,760 40.78%

Election results via the Washington Secretary of State.[1]

Text of the measure

The language appeared on the ballot as:[2]

The Legislature passed Engrossed House Bill 2901 (EHB 2901) concerning unemployment insurance [and voters have filed a sufficient referendum petition on parts of this bill]. This bill would revise laws regarding unemployment insurance for employers, including establishing new employer rate classes, increasing some taxable wage bases, and imposing surcharges if certain contingencies occur.

Should this Bill be approved or rejected?[3]

Vote in legislature

Engrossed House Bill 2901 -- the law that Referendum 53 challenged -- was passed by the Washington State Legislature by these votes:

Chamber Ayes Noes
House 64 33
Senate 35 14

Path to the ballot

Elliot J. Swaney filed a notice of intent to seek signatures to overturn the new unemployment insurance law on April 8, 2002. His group ultimately submitted 151, 239 signatures.

Support

Arguments in favor

These arguments in support appeared in the official State of Washington Voter Guide:[4]

R-53 WILL HELP OUR ECONOMY

Approving R-53 will make Washington State more attractive to new employers who provide full-time permanent jobs. Unemployment taxes in Washington are high; R-53 begins to reform them. The Washington Competitiveness Council asked the legislature to make these badly needed changes in our Unemployment Insurance laws. The changes are supported by both labor and business.

R-53 IS FAIR TO ALL EMPLOYERS Approving R-53 ensures that employers will pay adequate fees to cover the unemployment insurance benefits of their own laid off workers. A loophole in current law forces 80% of businesses (both large and small) to subsidize the costs of another 10% of business. That isn’t fair. (The remaining 10% are not affected by R-53.)

R-53 HELPS SMALL BUSINESSES AND YOUR POCKETBOOK

Approving R-53 ensures that unemployment taxes for restaurants, neighborhood grocery stores, local retailers and farmers will not increase significantly in the next several years. Tax increases that these businesses would have to pass on to consumers.

R-53 IS BIPARTISAN

This legislation was passed with a large bipartisan majority of Republicans and Democrats in both the House and the Senate after nine years of study and review. Opponents want to mislead you. They want to force other businesses to continue to subsidize them. Good drivers shouldn’t have to subsidize the auto insurance of bad drivers. The same thing is true for businesses paying unemployment insurance taxes. As the Wenatchee Daily World wrote, “This is a case of a loser in a legislative battle gaming the initiative system for private gain.” Protect Washington’s business climate and your own pocketbook at the same time.

Vote to Approve Referendum 53

Rebuttal of Statement Against

For years portions of the construction industry have not paid the full cost of unemployment insurance for workers they laid off. Other businesses, including tens of thousands of small businesses, have had to subsidize these construction firms to keep the unemployment insurance trust fund solvent.

Approving R-53 keeps the UI trust fund solvent for employees who are laid off.

Approving R-53 will help solve our economic crisis by making Washington State more attractive to employers.[3]

Supporters

The following individuals signed the argument in support of Referendum 53 in the State of Washington's official voter guide:

  • Gene Vosberg, President and CEO, Washington Restaurant Association
  • Jan Teague, Executive Director, Washington Retail Association
  • Rick Bender, President, Washington State Labor Council, AFL-CIO
  • Pat Batts, Administrative Vice President, Washington Farm Bureau
  • Doug Henken, President, Washington Food Industry
  • Ed Owens, Executive Director, Coalition of Coastal Fisheries

Opposition

Arguments against

These arguments in opposition appeared in the official State of Washington Voter Guide:[5]

REJECTING REFERENDUM 53 IS YOUR CHANCE TO HELP WASHINGTON’S SMALL BUSINESSES

Washington is in the midst of a crisis. Excessive government taxes and regulations are driving small businesses out of our state. Voting no on R-53 is your opportunity to help small businesses and their employees.

REFERENDUM 53 INCREASES TAXES ON SMALL BUSINESSES SO BIG BUSINESSES CAN GET A TAX CUT

Voting no on R-53 will overturn a $20 million to $30 million tax increase on small businesses approved by Governor Locke. The Governor wants to impose higher unemployment insurance tax rates on homebuilders and small businesses while lowering unemployment insurance tax rates for big companies like Boeing by $15 million.

REFERENDUM 53 DOES NOTHING TO ADDRESS WASHINGTON’S OVERLY COSTLY UNEMPLOYMENT INSURANCE SYSTEM

Washington State’s unemployment insurance system is the costliest in the nation. It is 2 1/2 times more costly than the national average, forces employers to pay the second highest benefits, and ranks first in the length of time unemployment benefits can be collected. The State’s unemployment system even allows an employee to quit his or her job, or even go to jail, and still collect unemployment benefits.

WHY YOU SHOULD VOTE NO ON REFERENDUM 53

A no vote on R-53 means the $20-$30 million unemployment insurance tax increase will be repealed. If R-53 is defeated and the tax increase on construction and small business employers is repealed, you will be sending a message to Governor Locke and Legislators that the unemployment system needs reform — not increased taxes. Groups opposed: Utility Contractors Association of Washington, Asphalt Paving Association of Washington, Automotive Wholesalers Association, National Electrical Contractors Association, Sheet Metal and Air Conditioning Contractors Association, Associated Builders and Contractors, Inland Northwest Associated General Contractors, Mechanical Contractors Association of Washington.

Rebuttal of Statement For

Don’t be misled. R-53 is not fair. R-53 does not reform the unemployment insurance system. It makes an unfair, expensive system worse. Plus, the tax increases in R-53 make it harder to hire new employees, something that is done by small businesses — not Boeing, a Chicago-based company. So don’t give the rich guy in Chicago a tax break. Help your neighborhood, main street business instead. Please Vote no on R-53.[3]

Opponents

The following individuals signed the argument in opposition of Referendum 53 in the State of Washington's official voter guide:

  • Dottie Piazza, Building Industry Association of Washington
  • Carolyn Logue, National Federation of Independent Business
  • Gary Smith, Independent Business Association
  • Debbie Gjerde, Washington Construction Industry Council
  • Tom Mielke, State Representative
  • Don Benton, State Senator

See also

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