Initiative king Tim Eyman turned in more than 300,000 signatures last week for his latest effort, Initiative 1033, a tax-cutting measure that's likely to qualify for the November ballot.
If it passes, budget analysts with the Washington State Budget & Policy Center and the Colorado Fiscal Policy Institute said last week, the consequences for the state's budget would be severe, making it difficult for the state to recover from the current recession.
The initiative aims to limit state revenue growth by capping how much in property taxes the state can spend each year using a formula involving inflation and population growth that's similar to Colorado's TABOR Amendment, with anything over and above the formula's cutoff going back to taxpayers.
In Washington state's 2011-13 budget, Jeff Chapman, research director for the Budget & Policy Center told reporters in a conference call July 1, that would keep more than a half-billion dollars in projected revenue out of the state's coffers, potentially leading to even more drastic cuts than the state made this year.
The formula, said Carol Hedges, an analyst with the Colorado Fiscal Policy Institute, has been a disaster in her state. In 1992, when voters passed TABOR, Hedges said, Colorado ranked 35th among states in K-12 and higher-education spending as a share of personal income. In 2007, she said, the state had dropped to 48th and 49th, respectively.
Where the state had ranked 23rd in prenatal care, she said, it was 48th in 2002 -- and is now dead last in the percentage of low-income children covered by health insurance, a drop from 33rd place. "In almost every kind of public investment you can imagine," Hedges said, "we went from the middle of the pack to the bottom of the barrel."
The situation got so bad, she said, that a business coalition helped pass a 2005 referendum that put TABOR on hold for five years -- in part, she said, because the business community saw how slowly Colorado came out of the 2001 recession compared with other Rocky Mountain states. Under TABOR's constraints, she said, it wasn't possible for the state to partner with business in creating jobs.
If Washington passed Initiative 1033 at the bottom of today's recession, she said, future growth in state revenue -- and services -- would be permanently held at recession-year lows. While proponents touted TABOR as a measure to limit state growth, she said, I-1033 would actually stop Washington state from restoring the cuts made this year.
"To me, the startling thing about the timing [of I-1033] is it wouldn't let public investments recover to where they were," Hedges said. "Everyone knows that in tough times you tighten your belt... but, boy, to put this on it when [the budget's] as skinny as it can be spells real danger for the state of Washington. It won't be able to recover naturally from the recession."
The Washington State Budget & Policy Center has posted a slide presentation on what Initiative 1033 would do to the state's revenue at schmudget.blogspot.com.