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Saturday, February 29, 2020  Spokane, Washington  Est. May 19, 1883
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Opinion >  Editorial

Editorial: I-1033 bad, but leaders need to act on tax reform

If it weren’t so damaging to the state, it might be good for Initiative 1033 to pass. The state’s leaders have done nothing but react to Tim Eyman’s misguided anti-tax measures, so another kick in the teeth would serve them right.

But Eyman’s latest plan is dangerous for Washingtonians. After an adjustment based on the annual inflation rate plus population growth, the measure would return the “excess revenue” for city, county and state governments via lower property taxes. There’s already a 1 percent annual cap on total property tax increases, courtesy of Initiative 747, which was tossed by the courts but reinstated by a cowed Legislature.

Some former proponents of I-747 who must balance budgets find it unrealistic. For example, Spokane County Commissioner Mark Richard, who can hardly be called a tax-and-spend liberal, said during his re-election campaign that he would not support the cap if it were put to another vote.

Health care, labor and energy costs rise much faster than 1 percent annually, which means government must continually cut services to balance budgets. I-1033 would exacerbate this decline. Currently, the county finds itself dipping into reserves, passing temporary sales tax hikes and asking voters to assess themselves more for a new jail. This same budget story is playing out in governments throughout the state.

Washington state does have taxation issues, but the biggest problem is not the property tax. Eyman has labeled it “obscene and unsustainable,” but the state ranked 29th in the nation in property taxes per $1,000 of income in 2006, according to the state Department of Revenue’s latest calculation. The state’s figure is $30.75; the national average is $34.92.

It’s an inordinately high sales tax and a counterproductive business tax, which assesses gross revenues (rather than the net), that ought to cause state leaders to cringe. The state can truly claim that it taxes the poor and businesses like no other.

But rather than take the sane advice of the Gates Commission and reform those taxes while backfilling with a modest income tax, elected officials have chosen to leave a leadership void that a full-time initiative hawker has been happy to fill with his corrosive brand of populism.

Something similar to I-1033 was attempted in Colorado, and it was a disaster. Voters eventually junked it. Many of the key costs of government, namely education and health care, do not obediently conform to the rate of inflation. So such a measure would only cause more cutting in these key areas that dominate the overall budget.

Voters should turn down this initiative, but the state’s leaders must find the courage to act, rather than react.

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