The Seattle Times opposes Tim Eyman's Initiative 1033, which would restrict the growth in state, county and city spending to the increase in the Consumer Price Index plus population growth.
TIM Eyman’s Initiative 1033 is the wrong restraint on state spending. Washington state had a restraint: Initiative 601, approved by voters in 1993. It limited the increase in state spending to population plus inflation.
Within 10 years, I-601 changed Washington from a high-tax state — 11th among states in taxes per $1,000 of personal income — to a medium-tax state at 28th. By the late 1990s, however, the limit blocked improvements in education and health care, and the Legislature began to loosen it. It has little effect now.
Taxpayers, we believe, do not want Washington to be a high-tax state again. But I-1033 is not the right way to restrain state spending, for several reasons:
• I-1033, unlike I-601, applies to counties and cities as well. In all of them, growth in property-tax revenue is limited to 1 percent plus taxes on new construction. Cities and counties are finding it a hard limit to live with. Any further limit on their tax collections should be up to the citizens in each jurisdiction.
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• I-1033 uses excess collections of all taxes to reduce one tax, the property tax. The effect, after five years of a normal economy, is that the state property tax “goes almost to zero,” said Kriss Sjoblom, vice president of the nonpartisan Washington Research Council. I-1033 would quietly erase the state’s one major tax on wealth, leaving the state depending on the business revenue tax and the sales tax. These fall more in recessions than the property tax does, putting the state more at risk.
• I-1033 appears to have the same population-plus-inflation rule as I-601, but in the fine print it is much stricter. It controls revenue, not spending, and bases its revenue limit on this year, a skin-and-bones year. In setting the growth in inflation-adjusted per-capita revenue at zero, I-1033 would tend to slowly increase class sizes in public schools and raise tuition at state universities and community colleges. It would leave Medicaid short and put the Basic Health Plan on the chopping block.
Like all voter initiatives, I-1033 could be modified by a simple majority of the Legislature after two years. Eventually it would be. A better course is to vote down I-1033 now, and for the Legislature to better restrain spending. If they do not, they can expect more spending-cap initiatives.