I-1033's cost outweighs savings, should be defeated

POSTED ON Saturday, October 10, 2009 AT 02:30PM

Advanced Search

I-1033's cost outweighs savings, should be defeated

Yakima Herald-Republic Editorial Board

Links

E-mail

Comments

More 'Opinion'

More Stories: Today's News | This Week

This editorial appears in the Oct. 11, 2009, Yakima Herald-Republic.

Tim Eyman's latest appeal to voters, Initiative 1033, plays again on a populist-themed outrage over excessive spending by state lawmakers. He hits the bull's-eye here.

Two years ago, it appeared the state had won the Lotto jackpot. Revenue was pouring in at a record clip and lawmakers couldn't resist spending it as quickly as possible. Though Gov. Chris Gregoire insisted that some of those funds be stashed away in a rainy day fund, which serves as an emergency savings account for the state, that proved hardly enough.

With last fall's twin collapse of the nation's financial and housing markets, the good times came abruptly to an end, and this past legislative session found lawmakers facing a reversal of fortune -- this time a record shortfall in revenue.

So in stepped Eyman with his Initiative 1033 that the veteran ballot barker says will return fiscal restraint to state spending. If approved by voters Nov. 3, the measure would place a cap on the flow of revenue from taxes and fees that state, county and municipal governments take into their general funds. This revenue cap would be fixed at 2010 levels and would rise only to reflect inflation and population growth. Revenue that exceeds the cap would be used to reduce property taxes. In terms of state and local taxes, Washington ranks 28th in the nation in taxes per $1,000 of personal income.

Eyman argues the initiative would not eliminate increased spending, but would restrain its rise to a more prudent rate tied to inflation plus population growth.

Critics say the initiative wouldn't allow the state to meet unexpected emergencies like natural disasters. But Eyman correctly argues that under I-1033 voters still retain the authority to increase spending, and lawmakers can also amend the initiative two years after its passage.

Eyman argues I-1033 would restore limits on state spending that his previous initiative, I-601, had forced upon lawmakers. Ever since I-601 went into effect in 1993, lawmakers have watered down those limits, Eyman says. That, in turn, opened the doors to the spending spree several years ago.

Eyman delivers a strong argument. The roller-coaster ride that this state has suffered through over the years through undisciplined spending by lawmakers is maddening, and makes for lousy public policy when the economy cools and cutbacks are required.

However, Eyman carries his passion too far in I-1033. The initiative would effectively anchor state revenues to the spending limits of this current recession and would prevent the state from digging itself out of this budgetary hole. The state Office of Financial Management predicts the initiative would reduce the state budget by $5.9 billion by 2015.

In particular, health care would be severely burdened. Critics of I-1033 argue the measure could result in further erosion of support for hospital care to Medicaid enrollees -- low-income families, elderly and disabled children. Projections place this shortfall in the next five years at $480 million. In the Yakima Valley, where nearly a half of the population is on some form of public assistance, primarily Medicaid, this shortfall would be particularly painful.

What concerns us also are the cutbacks that will befall our cities and counties under Eyman's initiative. His main beef has always been with what he calls free-spending state lawmakers. So why drop a sledge-hammer on cash-strapped towns and counties?

Due to plunging sales and property taxes, Central Washington municipalities and counties are facing extreme budget shortfalls despite being, as a group, fiscally prudent. But under Eyman's initiative, that doesn't matter.

Look at Yakima County. It faces a $3 million shortfall next year. If the initiative had been in place since 2002, the county would have faced an additional $15 million in curtailed revenue, a prospect that would surely have led to severe cuts in law enforcement and courts, which comprise nearly 80 percent of the county's budget.

Furthermore, the initiative does not exempt rainy day funds for cities and counties from the revenue cap. How fiscally prudent is that, Mr. Eyman?

We find Eyman's passion for spending restraint laudable but not his initiative. It overreaches and puts an unfair shackle on cities and counties, as well as on public services, that is unacceptable.

That is why we recommend a no vote on Initiative 1033.

* Members of the Yakima Herald-Republic editorial board are Michael Shepard, Bob Crider, Spencer Hatton and Karen Troianello.

Posted by TimEyman at 10/10/09 08:29PM Post ID#: #14907

From: Tim Eyman, I-1033 co-sponsor

I-1033 endorsed by Yakima Valley Business Times:

I-1033 Scare Tactics Begin

YAKIMA VALLEY BUSINESS TIMES, Friday, October 9, 2009

The special interests that benefit from big government have so far invested $1 million in an effort to defeat Initiative 1033, a measure on November¹s ballot that would limit the growth of government. We expect that figure to grow exponentially. We expect these special interests -- primarily public sector trade unions -- to spend upwards of $3 million trying to beat back the latest Tim Eyman-sponsored measure.

We hope they fail.

The premise behind I-1033 is simple. Government should only grow as fast as the private sector. That is not what is happening now. Government is growing -- and has been growing for decades -- at a rate that is much higher than that of the overall economy.

It doesn't take a math professor to figure out that growth like that is unsustainable. Pretty soon, the trend lines will cross. Pretty soon the tax generators will not be able to support the tax spenders -- there will simply not be enough of us.

As we have written before, we could soon be facing a situation where the number of people pulling the wagon will be outnumbered by the number of people riding in the wagon. To put it less delicately, the parasite will outgrow the host.

Unless something is done to control that trend, we as a society face a dismal future.

Under I-1033, state, county and municipal governing bodies will be allowed to hike their budgets at the rate of overall inflation plus population growth. If the economy grows 4 percent and the number of people in the city, county or state grows 2 percent, the legislative body would be able to raise its budget 6 percent.

Any money raised in excess of that figure would be used to reduce overall property taxes. If a government needs more money, it would need to receive approval from taxpayers through a special election.

Basically, what I-1033 does is force elected officials to get their labor costs under control. Labor is, by far, the biggest cost driver in government and until its growth is slowed, things will never get better. I-1033 could make that happen.

The hand-wringers have already begun their caterwauling and their personal assaults against Eyman. We hope voters see through those straw dogs and stay focused on the central question behind the measure.

Can we as a society continue to allow our government to grow at a rate that is substantially higher than the private sector? Those who oppose I-1033 have a moral obligation to answer that question.

If they don't -- or won't -- then it seems to us that the choice is clear. We need to take matters in our own hands through the initiative process and force our elected officials to make the tough cuts by limiting the amount that can be raised through taxes.

Maybe that will get their attention.

-- END --