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Posts published in “Day: July 3, 2009”

How bad is it getting at Tamarack?

Often is - more often than people typically think - that bankruptcies and other reorganizations aren't fatal problems for businesses. A good many have come out of them whole and prosperous.

But this from the Idaho Statesman, concerning the Tamarack ski resort near Donnelly, gave us pause:

An Idaho judge on Thursday refused to let Bank of America Corp. repossess two ski lifts from Tamarack Resort, providing at least a brief reprieve for owners trying to keep the failed Valley County vacation getaway intact for a possible buyer.

I-1033, TABOR and some math

On Thursday initiative developer Tim Eyman turned around 314,000 signatures to put his latest measure on the ballot. The secretary of state's office indicates it is likely to be the only citizen initiative on the ballot, which could be a plus: Rather than fade into a fog of issues, this one is likely to stick out and get some attention.

It ought to. Voters will have the opportunity to check it out, and they shouldn't like what they see - a measure not identical but comparable to one that seriously damaged one state (Colorado) and was subsequently suspended by the voters there (in 2005), and to a clutch of ballot measures which since have been rejected by a bunch of other states, including Oregon. Which, like Washington, has had some history of friendliness toward many anti-tax measures, which 1033 is. (There were also rejections in Maine and Nebraska, and many others didn't make the ballot.)

Eyman's pitch on the measure is simple: "The Lower Property Taxes Initiative substantially reduces property taxes by controlling the growth of government. 1033 says that the growth rate of state, county, and city general fund revenue cannot exceed the inflation rate plus population growth. Revenues collected above the limit will reduce property taxes. Not only does 1033 provide meaningful property tax relief, but it stops politicians from shifting the tax burden by raising taxes someplace else. 1033 provides ‘net’ property tax relief."

This essentially is the same as TABOR, the "Taxpayers Bill of Rights," which Colorado voters adopted. And then, as we posted in November 2005: "In that state, services have been strapped and fees have risen to the breaking point. That assessment might be taken as the wailing of government burteaucrats except for what happened Tuesday: Statewide voters decided, 52%-48%, to in effect - for a five-year stretch - throw out TABOR restrictions and increase state budgets, and their own taxes. That action had been endorsed by the conservative Republican governor, Bill Owers, who said that TABOR restrictions had put the state in an untemable position."

The best single piece we've spotted on 1033 so far is a new piece in Horse's Ass, the liberal blog with, to be sure, no enthusiasm for Eyman (the blog's name derives from the founder's preferred title for Eyman). It's worth a read, most specifically for one point.

Eyman's logic on budgeting initially sounds sensible: If government costs are limited to inflation plus population growth, shouldn't that be enough? It's easy logic to accept, and not many people have been able to break down the problem with it. (In Oregon, activist Steve Novick is one of the few to do it well.) Horse's Ass quotes a report explaining why the formula doesn't work:

But researchers long have recognized that the services provided in the public sector, such as education, health care, and law enforcement, tend to rise in cost faster than many other goods and services in the economy in general. This analysis was first put forward by economist William Baumol, who pointed out that technology and productivity gains may make goods cheaper to produce, but the services that government provides are different. Baumol said public services typically rely heavily on well-trained professionals — teachers, police officers, doctors and nurses, and so on — and technology gains do not make these services cheaper to provide. It may take far fewer workers to build an automobile than it did 30 years ago, but it still takes one teacher to lead a classroom of children. (In fact, as education has become increasingly important, the trend is toward more teachers per pupil, not fewer.) Doctors generally still see patients one by one, and nursing care remains labor intensive despite technology.

You can look at areas from law enforcement and corrections to colleges and health inspectors to see the problem: The cost of these kind of services rises faster than the overall rate of inflation.

Conveying that point will be the challenge facing the initiative's opponents.