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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.

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2 Comments

  1. Tim Eyman Tim Eyman July 3, 2009

    From: Tim Eyman, I-1033 co-sponsor

    Click here to read a ‘one page’ on the policies and rationale for I-1033:

    http://www.VotersWantMoreChoices.com

    Here’s an excerpt:

    In January, we started a debate over lowering property taxes and over the past 6 months, we’ve discussed 1033’s policies and principles with the people. And thanks to the 314,227 citizens who voluntarily signed a petition, that debate will continue until election day when a decision will be made by the people. We’re grateful to our supporters for providing us with the opportunity to make the case for 1033.

    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.

    Property taxes are a huge problem, especially for struggling working families and fixed-income senior citizens. Too many are being taxed out of their homes. We don’t want Washington to be a state where only rich people can afford to buy and own a home. Citizens desperately need and deserve property tax relief, especially now, during these tough economic times.

    No state, county, or city politician can say they didn’t see this coming. For decades, citizens have told politicians about their own personal property tax horror stories — and politicians consistently ignored them. For decades, during both good times and bad, governments allowed taxpayers’ property tax problems to fester, arrogantly dismissing the people’s repeated, urgent call for relief. Why is Initiative 1033 necessary? Politicians need to look in the mirror — it is their decades of inaction and greed, as well as their complete lack of empathy and compassion for the taxpayers’ struggles, that necessitated 1033.

    again, read the whole thing here:

    http://www.VotersWantMoreChoices.com

  2. Tim Eyman Tim Eyman July 3, 2009

    From: Tim Eyman, I-1033 co-sponsor

    In 1993, the voters of Washington approved I-601, a spending limit that said government can grow at the rate of inflation plus population growth, the same formula as that used in I-1033. So it’s not necessary to look to Colorado or other states who have constitutional amendments that aren’t repealable or amendable — Washington has years and years of personal experience with this same kind of thing with I-601.

    And I-601 worked very well. At least, that is, until the Legislature did what it tends to do with initiatives in Washington … and that is to put loopholes in them to get around them. That started with the Republicans in 1998 and later by the D’s in 2000, 2001, and 2002. Had they not done so, if they had abided by its limits on growth, there would not have been a $3.2 billion deficit in 2003 for Locke and Rossi to address. Further, there would not have been a $9 billion deficit in 2007 for Gregoire and the Democrats to address. If they had allowed the public sector to grow at the same rate as the private sector, then there wouldn’t have been such high peaks and deep valleys.

    For decades, they’ve taken their budgets on a fiscal roller coaster, overextending themselves in good times — creating unsustainable budgets — and then slashing during bad times. I-1033 gets us off that roller coaster, allowing sustainable, predictable growth, inspiring them to reform and prioritize using existing revenues (and always with the safety valve that I-1033 has which says that if they need more money, they can go to the people and ask for more — voter approved revenue is exempt from the limit)

    that’s reasonable, that’s sustainable, that’s what these 314,000 citizens believe is a better way to go.

    We can’t keep pouring tax revenues into a bucket that has a big hole in the bottom — it’ll never be enough. The state, counties, and cities need to learn that taxpayers don’t have bottomless wallets.

    http://www.VotersWantMoreChoices.com
    More…

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