On Thursday, July 2, 2009, initiative sponsor Tim Eyman submitted Initiative 1033 (I-1033) with sufficient signatures to qualify for the November general election ballot to the Secretary of State's office. If I-1033 passes in November, it would limit the growth of state revenues deposited in funds subject to the state expenditure limit and limit growth in county and city revenues deposited into the county and city current expense funds. The limit would be adjusted based on annual growth in inflation and population and not include new voter-approved revenue increases. Revenue collected above the cap would be used to reduce property taxes. This would apply to city general fund revenues in 2010, with the limit set at 2009 revenues adjusted for inflation and population growth. Although the initiative states that new voter-approved revenues would be exempt for 2010, it also states that new voter-approved revenue is defined as the increase in revenue approved by the city's voters at an election after the effective date of this act. Since the November election is the last of 2009, any voter-approved tax increases passed in 2009 would likely be subject to this initiative and not excluded from the revenue limitations.
Initiative 1033 could have a significant impact on the City of Normandy Park if it is approved by voters. Currently, revenues are not sufficient to cover the operating costs and, because the city is developed with no potential for significant growth, there would be no opportunity to generate new revenues to cover the necessary operating expenses. Any new revenue generated from grants, sales tax, licenses and permits would result in equal reductions in property taxes. This would have a significant impact on the City's budget in years following receipt of large grants or in years following high volumes of building permit activity.
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One negative feature of I-1033 is that in years like 2009 when revenue is down for most cities, counties and the state, the baseline ratchets down. The next years revenues available for city use decreases as a result because the lower baseline plus inflation and population growth is the new limit before funds get transferred to the property tax fund.
ReplyDeleteAlso there is a basic inequality going on here. City revenues come from a variety of sources like sales taxes. Everyone pays sales tax yet the property tax reduction only benefits property owners. Only 65% of Washington's households are owner occupied according to the US Census Bureau.
In fact under Eyman's I-1033, the more property you own, the more of a tax break you would get under I-1033. People who most need help with property taxes like fixed income seniors or working people with low or medium income would benefit much more from circuit breaker legislation or a Homestead Exemption on their principal residence.
I-1033 is a complex measure, transferring wealth to the wealthy from those less well off and leading us further down the raod to a California style mess of laws that over restrict the ability of local government to do its work.
Eyman says we are overtaxed by government yet the conservative Tax Foudation says that Washington State ranks 35th (1 being highest) in terms of state and local tax burden.
Voters would be wise to read between the lines of Eyman's I-1033 and vote No on I-1033. I-1033 would remove local control of cities setting their own budgets and priorites of how they want to spend local tax dollars. It is a George Owell 1984 version of Big Brother Tim Eyman telling you what you can and can't do.