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Eyman initiative fight under way

I-1033 would tie revenue to inflation, population

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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