Washington Education Trust Fund Sales Tax Increase, Initiative 884 (2004)
I-884 was an attempt to increase the state's sales tax by 1% in order to create an education trust fund to pay for "smaller classes, extended learning programs, certain salary increases, preschool access, and expanded college enrollments and scholarships."
About $3.2 million was spent by I-884's supporters to urge a "yes" vote, to no avail, while those urging a "no" vote spent only $1,870.
|Initiative 884, the "Education Trust Fund Act"|
Estimated fiscal impact
The estimated fiscal impact of I-884 as estimated by the Washington Office of Financial Management was:
- Initiative 884 would generate approximately $1 billion in new education funding annually by increasing the state sales/use tax rate from 6.5% to 7.5%. In the first five years of implementation, $4.7 billion would be distributed as follows:
- 2.3 billion for K-12 investments in class size reduction, extended learning opportunities, certain salary increases, and professional development.
- $1.9 billion to increase state-funded higher education enrollments by at least 25,000 students, expand financial aid, and boost state-funded research.
- $464 million to expand preschool opportunities for low-income three- and four-year old children.
- $23 million for citizen oversight and statewide projects."
Supporters of I-884 as listed in the official Voter's Guide included:
- William H. Gates, Sr.
- Meg Bushnell, President, Washington State PTA
- Gary A. Livingston, described as a K-12 and higher education leader
- Nick Hanauer, Chairman, aQuantive, Inc.
- Paola Maranan of the Children’s Alliance
- Lisa MacFarlane, of the League of Education Voters.
Arguments in favor
Arguments made in the official Voter's Guide by I-884's supporters included:
- "Olympia politicians have under-funded our schools and compromised the promises we have made to children and families", which include the ideas that every child should start school prepared, that class sizes should be small, teachers "better paid and supported", and that "every student who needs it has financial aid."
- The Education Trust proposed in I-884 would make the promise of quality public education a reality for the first time, by increasing teacher pay, funding 16,000 lower income children for pre-school every year, creating 32,000 new state-funded enrollments at 2 and 4-year colleges and universities, and increasing student aid and so-called "Promise Scholarships".
- The Education Trust would be "protected for political meddling." It would do this by putting money in a segregated fund that the Washington State Legislature would not be able to tap for any purpose other than those created by I-884.
The name of the committee that supported I-884 was "Citizens for the Education Trust Fund." They raised $3,237,683 for their campaign to urge voters to vote "yes".
The top 8 donors were:
- Nicholas Hanauer: $829,405
- Microsoft: $200,000
- James Pigott: $150,000
- Bill Gates, Sr.: $150,000
- Charles Simonyi: $100,000
- Ruthann Lorentzen: $100,000
- Eric Dillon: $100,000
- Washington State Democratic Party: $91,944
Opponents of I-884 as listed in the official Voter's Guide were:
- Clyde Ballard, former Speaker of the Washington House of Representatives
- Jamie Daniels, Director of Washington CSE/FreedomWorks
- Roxanne Husmann, described as a "farmer, small business owner, community volunteer"
- Tom Huff, former House Appropriations Chairman and retailer
- Minnie Knych, a former school superintendent and teacher.
Arguments made in the official Voter's Guide by I-884's opponents included:
- If I-884 is enacted, the "skyrocketing sales tax" would "devastate Washington's sluggish economy and hurt struggling working families."
- Washington State's sales tax was already, they wrote, "one of the highest sales taxes in the nation" and increasing it by 15% would "hurt the poor, cost tens of thousands of jobs and steer customers to tax-free Oregon and the internet."
- Opponents also referred to "crushing property taxes, job-killing business taxes, sky-high utility taxes, and hundreds of taxes and fees on virtually every government service", saying that it is not possible to tax a state into prosperity.
- "Washington is the 7th highest taxed state in the nation" and it can't afford to be #1 in this contest with no winners.
- Education is very important but the politicians supporting I-884 are trying to manipulate voters by holding them hostage by "putting essential services on the ballot while they fund their pet projects with our existing taxes."
- More than half of public education money in the state "is eaten by administration and bureaucracy and many dollars are unaccounted for or wasted on failed programs."
- Opponents also said that the proposed I-884 tax would be "the largest tax increase in state history".
Path to the ballot
- 2004 Online Voters' Guide: Measures
- 2004 Washington Ballot Measure Details
- Election results for the 2004 ballot measure election