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I-1033 doesn’t cut taxes — it limits revenues
Why are we doing Initiative 1033? Because for 12 years, our supporters and fellow citizens have been asking us — in fact begging us — to tackle our state’s growing property tax crisis with an initiative.
Every year, our property tax burden gets bigger and bigger and yet there’s been no answer, no response, no action whatsoever from state, county, and city politicians.
So we drafted and sponsored a property tax initiative that will reduce the citizens’ tremendous property tax burden at the state, county and city level. That’s why it’s called the Lower Property Taxes Initiative.
But we wanted to make sure that after lowering property taxes, politicians couldn’t shift the tax burden and raise taxes someplace else. We wanted “net” property tax relief.
So we drafted I-1033 to cap the growth of overall revenue to ensure property tax reductions provided for by the initiative were not replaced by increases in other taxes or fees.
What’s also beneficial to the taxpayers about this approach is that it builds on and reinforces previous tax initiatives that have been undermined by subsequent legislative action.
It closes existing loopholes and deters future loopholes. This is especially needed in Washington state because the lifespan of initiatives, including I-1033, can be cut short.
Washington has a very unique initiative process compared to other states. Here, the people can pass laws, but they cannot change the state Constitution.
Part of the checks and balances of our state’s legislative process requires that lawmakers and the people’s initiatives are co-equal — meaning the people can pass a law, but the Legislature can change it.
Conversely, the Legislature can pass a law, but the people can change it. It is a tug-of-war in which both sides have equal authority.
Other states (Oregon, California, Colorado and others) allow the people even more power and permit them to change their state Constitution by initiative, leaving the Legislatures in those states with little to no flexibility.
Washington is different — one can argue that this is a weakness (lawmakers can change initiatives they don’t like, which frustrates many people) but it can also be seen as a strength (lawmakers can adjust people-initiated policies to adapt to changing conditions).
Regardless of how you view it, it is the way it works in Washington state.
This is one of the main reasons why the doomsday predictions made by opponents of our initiatives are so easily dismissed as absurd.
If an earthquake, small pox, alien attack, or other hysterically bad thing occurs, the Legislature is empowered to change the policies in any initiative.
They’ve done so before and they will do so again.
It is for this reason that follow-up initiatives like I-1033 are especially helpful; they give the people the chance to reinforce policies that voters previously approved but that politicians subsequently changed.
With I-1033, there are three previous taxpayer protection initiatives that are reinforced:
• In 2007, voters approved Initiative 960, making it tougher to raise taxes. It’s only been two years, but there’s already rumblings from politicians telling reporters that I-960’s policies are on the chopping block next session.
Passage of I-1033 removes their incentive to do so. As was explained in the July 3 Seattle Times:
“Eyman said he’s worried lawmakers will try to unravel I-960 next session because two years will have passed since the initiative was approved. He sees I-1033 as another barrier to raising taxes without voter approval. The initiative ‘says if you raise taxes without a vote of the people you’ll have to give it back the following year by lowering the property-tax burden. So maybe you shouldn’t do that,’ Eyman said.
I-1033 allows governments to put tax increases to the voters. If approved, the new tax revenue would be exempt from the initiative’s limits.
The major theme of I-960, continued and reinforced by I-1033, is encouraging politicians to get the people’s permission before taking more of their money.
This year’s initiative puts a limit on how much of an increase they automatically get — under I-1033, they can always go to the people to get more — 1033 has a built-in safety valve that allows the voters to approve higher revenue if government makes the case for it (that voter-approval safety valve is contained in all our tax initiatives).
• In 2001, voters approved a 1 percent cap on the growth of regular property tax levies with Initiative 747. Six years later, following the High Court’s goofy 5-4, “voters-were-misled” ruling, Gov. Gregoire and the Legislature reinstated the 1 percent cap during a special session, but they refused to repeal banked capacity, the ability of state and local governments to get around the cap.
I-1033 removes the incentive to use that unilateral tax-hiking authority because any revenue collected from it would be refunded the following year. Also, many citizens believe that state and local governments and county assessors are simply jacking up property tax valuations/property tax assessments in order to get around the 1 percent cap.
Under I-1033, moneys collected from any revenue source that exceed I-1033’s revenue cap must be used to reduce the subsequent year’s property tax levy.
• In 1993, voters approved I-601, a spending cap initiative that said government can grow at the rate of inflation plus population growth, the same formula used in I-1033. 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.
Politicians are endlessly creative at avoiding limits on their spending. In fact, we would argue that it’s not possible to ever limit politicians’ spending by initiative (in our view, that can only be done by electing fiscally responsible people for office).
So we didn’t do another spending cap initiative — I-1033 doesn’t amend the state’s spending limit — because we don’t believe it would work.
Instead, we drafted I-1033 to do what we believe is possible — limit the growth of the citizens’ overall tax burden by instituting a new revenue cap.
Under I-1033, revenue will continue to go up, but it’ll go up at a rate the citizens can control and the taxpayers can afford.
I-601’s spending cap had a good run, but we believe that a new revenue cap is the way to go.
We can’t control politicians’ uncontrollable spending, but we can at least make sure that the overall amount of money they take from taxpayers doesn’t grow faster than the taxpayers’ ability to afford it.
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 314,000 citizens believe is a better way to go.
Tim Eyman is a resident of Mukilteo.