Initiative 'would make recession permanent'

AN INITIATIVE that will appear on the November ballot would slow the economic recovery and leave Washington state in a permanent recession.

That’s the warning being issued by both labor and business organizations about initiative 1033 being sponsored by Tim Eyman.

The measure would limit the growth in certain state, county and city revenues to annual inflation and population growth, excluding voter-approved revenue increases.

“The biggest harm from this initiative is that it will prevent the economic recovery from taking place in our state,” says Council 2 Deputy Director Pat Thompson. “Members of Council 2 would be unable to benefit from rising revenues and the cutbacks would become the norm. This year our cities and counties have faced large budget deficits that have resulted in cuts that have included furloughs and layoffs for our members.
“If passed, I-1033 would lock in this year’s budget as our baseline. It could be increased only by the inflation and population growth rates and not by a rebound in revenues should the economy recover.

“This is not a new idea. It has been tried and doesn’t work.”
Similar initiatives have been defeated at ballots in four states, including Oregon and California and kept from the ballot in five states. Similar measures were introduced legislatively in 28 states, but Colorado remains the only state to have adopted the idea.

The measure has been suspended in that state, however, largely because business groups recognized how harmful it was to their interests.

Thompson explains that costs such as health care and education do not follow normal inflation, which is the measure used in the initiative.

“You create these formulas, but real-life spending costs don’t fit into your formulas,” Thompson says. “They don’t fit into the box that is created for them. They run much higher than artificial inflation measures.

“Eyman (the initiative sponsor) is up to his old tricks — trying to profit from failed ideas,” Thompson says.

“It is really an abuse of the initiative process.

“The idea that one snake-oil salesman and a wealthy businessman backing him can abuse the initiative process is costing all of us.”

Arguments against the measure raised by Permanent Defense and the Washington State Budget & Policy Center include these points:

• The initiative is designed to lock in all the budget cuts that state and municipal governments are currently making, thus potentially killing thousands of jobs in the years to come.

• This initiative is the exact opposite of real reform. Instead of fixing what’s broken, it would make all of our lives worse. Much worse. We need real tax reform that improves stability and fairness in our tax system.

• Property taxes already have strict limitations on growth and levels. The result of these has been particularly hard on local governments, who have limited ability to raise other taxes.