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Roundup on governor’s race – cash flows, misleading ads

Post by Brad Shannon / The Olympian on Sep. 17, 2012 at 1:28 pm with No Comments »
September 17, 2012 1:28 pm

The weekend brought former President Bill Clinton to Seattle and $750,000 to Democrat Jay Inslee’s gubernatorial campaign. But it also brought a lot of news reports – including one on the way big donors are getting around contribution limits and other stories that checked out the questionable claims of the campaign ads.

In The Associated Press story about Clinton’s visit, it appears Inslee gained at least a temporary fundraising edge over Republican Rob McKenna – given that both candidates were at about $8.6 million collected so far for their Nov. 6 showdown.

But as Andrew Garber reported in the Seattle Times, about $1.5 million of Inslee’s haul is from the state Democratic Party, and his story explains how big Democratic donors are getting a little extra Inslee’s way by making donations to the party.

On the ad-check front, McKenna comes out better than his rival on this round.

In a Smell Test from my reporting partner Jordan Schrader of The News Tribune that ran today, flaws and some truth are found in a Republican Governor’s Association ad that slams Inslee for hurting small businesses. One claim about Inslee’s vote for the stimulus package is deemed “only half-true because it overstates the case against the stimulus” in 2009 that was worth $787 billion and, according to most economists, saved many jobs.

But another claim, which also fails to tell the full story, is judged largely true – in that it says Inslee voted for President Obama’s health reform law that could saddle some small businesses with penalties on their income taxes if they fail to offer workers health-insurance. On the other hand, some of those businesses could gain from tax credits under the law.

As Schrader wrote:

Businesses with at least 50 employees will have to pay a $2,000-per-employee penalty starting in 2014 if they don’t provide what is deemed adequate coverage, according to the National Conference of State Legislatures. The penalty applies if any of a business’s employees obtain a government subsidy through one of the new insurance exchanges created under the law. And employers don’t have to pay it on their first 30 employees.
The nonpartisan Congressional Budget Office projected the penalties would raise $10 billion to $11 billion a year once they fully kick in. Whether that’s a “massive” tax increase might be subjective, but it’s a lot of money.
And some of it will come from businesses that could be considered small – although not as small as the mom-and-pop businesses implied by the footage in the ad. One definition of a small business comes from the U.S. Small Business Administration, which has authority over manufacturing businesses with 500 or fewer employees and nonmanufacturing businesses bringing in $7 million or less.
While their somewhat larger peers will face new costs, the smallest businesses could save money under the law, because of tax credits to help businesses with up to 25 employees afford insurance premiums. Those are estimated to cost an average of $4 billion a year.

The RGA has put more than $5.2 million into its political committee that is backing McKenna and running ads against Inslee.

In a Times “Truth Needle” from the end of last week that also ran in The Olympian today, Susan Kelleher points out that labor-backed Our Washington, which raised more than $4 million for its effort to help Inslee, has run misleading ads that falsely link McKenna’s support for his own pay raise with his efforts to block a minimum wage increase. The testimony on pay happened in 2007, before the economic troubles, while the actions on minimum wage happened in 2010, well after the economy had cooled.

Also, McKenna wasn’t alone among statewide elected officials in arguing for pay raises.

Whatever McKenna might gain in having the truth told on his ads, another truth is emerging in polls: any edge McKenna had in polls early in the year is gone, the race is still a toss-up, but many recent polls show Inslee pulling ahead – as noted here and here.

Those results are coming as President Obama has opened up a 16- to 17-point edge over Republican Mitt Romney among Washington voters, according to the latest Elway Poll and KING-5 polls.

General Politics
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