July 2, 2009 in City

Eyman initiative fight under way

I-1033 would tie revenue to inflation, population

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OLYMPIA – The signatures weren’t expected to be turned in until this morning, but the fight over Tim Eyman’s latest anti-tax measure has already begun.

Analysts from liberal think tanks in Washington and Colorado blasted Eyman’s initiative Wednesday, saying it would ratchet down government revenues just when economic growth would bring in money to restore cuts.

“I don’t think the timing could be worse for the state to be considering this kind of constraint,” said Carol Hedges, analyst with the Colorado Fiscal Policy Institute.

Colorado’s “taxpayer bill of rights,” eventually overturned by voters, was very similar to Eyman’s measure, she said.

Eyman counters it’s a perfect time for his initiative. The alternative, he said, is to climb back aboard a “roller coaster” of overspending in good times and cuts in bad.

Initiative 1033 would limit revenue increases for cities, counties and state government to the rate of inflation plus population growth. Money above that amount would be used to lower property taxes.

The limit would only apply to general-fund revenue, meaning that things like federal stimulus dollars wouldn’t count. And voters are free to lift the limit.

“If you need more, make your case to voters,” Eyman said.

Critics of the measure say there are several major problems:

•Inflation tracks consumer prices, but government spending includes costs that rise fast, such as education and health care.

•Population growth is too simplistic as a measure, ignoring the costs of an aging population or rising numbers of uninsured people.

•After recessions, the measure would hold down government spending for years, making recovery more difficult.

For example, the state expects about $1 billion more from 2010 to 2011, said Jeff Chapman, research director of the private Washington State Budget & Policy Center. The tax rates aren’t rising, but a growing economy will produce more tax dollars.

But under I-1033, he said, the state could spend less than half that money. The rest would pay down people’s property taxes.

If the state had passed such a law in 1995, Chapman said, Washington state would have had $6 billion less to spend now, in an already-tight budget year.

In 1992, Colorado voters amended the state constitution to limit growth in government spending to inflation plus population. The result, she said, was a race “from the middle of the pack to the bottom of the barrel” in spending on crucial services such as colleges and public schools.

In 2005, voters suspended the limit for five years and did away with a provision that permanently lowered the bar during recessions.

In 2006, such measures were rejected in Oregon, Maine and Nebraska.

Eyman dismissed such comparisons.

His measure is far more limited, he said. It doesn’t apply to entities like cemetery districts, ports or library districts. It allows for a state “rainy day” fund.

And voters can always approve more.

He said I-1033 is a careful balance between people who want to dramatically shrink government and those who want no limits on how much money it takes in.

“Average citizens feel their property tax burden is sky high,” he said. “They know it’s completely out of control. We’re trying to do something about it in a way that’s reasonable.”

He argues that population and inflation are the best yardsticks for limiting spending.

“No matter what you give them,” he said, “it’s never going to be enough.”

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Three comments on this story so far. Add yours!

• 

  Steve Zemke on July 02 at 1:38 p.m.

  I-1033 is a transfer of wealth from the poor to the rich. It is a transfer of money from those that don't own property to those that do. The reason is that last year 57% of the state's revenue came from sales taxes.

  So if our economy grows back to where it used to be, sales taxes will push revenue over Eyman's population and inflation limit and transfer these dollars to property owners.

  Everyone pays sales tax but it is regressive and Washington states lowest income earners pay a much higher share of their income to sales tax than the wealthy.

  Eyman's measure won't benefit them if they don't own property or pay property taxes..

  Flag as inappropriate

• 

  Bob_Knows on July 02 at 7:26 p.m.

  I'm going to vote for it. If the corrupt politicians can't control their waste, waste, waste, and tax, tax, tax, then the people need to take control.

  Flag as inappropriate

• 

  Steve Zemke on August 14 at 3:33 p.m.

  I-1033 is a Tim Eyman clone of a measure passed in Colorado known as TABOR or the Taxpayer's Bill of Rights. In Colorado it was passed as a Constitutional Amendment. I-1033 is an initiative, not a constitutional amendment, but the impact would be the same.

  Based on Colorado's experience, I-1033's spending limits would be a disastrous experiment to repeat in Washington State. I-1033 attempts to put in place the same spending limit that Colorado had used - limiting government spending to the previous year's level plus a slight adjustment for population and inflation. The result in Colorado was an ever decreasing level of public services at both the state and local level.

  The reduction in services is caused by the fact that the use of the consumer price index measure is based on consumer spending. State government costs for education and health care unfortunately increases much faster than the consumer price index.

  Also I-1033 does not take into account demographic effects like the increase in senior citizens as a result of the baby boom. These are not part of the population adjustment, despite the fact that their increasing numbers are placing more demands on Medicaid and other state services.

  In Colorado K-12 spending decreased from 35th to 49th. Higher education funding decreased 31%. Childhood vaccinations, childrens's healthcare, road repair and many other services saw continuing declines.

  We don't need to repeat the Colorado experiment in Washington State. You can check out a video here on why people in Colorado now oppose TABOR. including Republicans and business.

  http://www.youtube.com/watch?v=kbF3_C…

  Vote No on I-1033 this November 3rd.

  Flag as inappropriate