The Pullman City Council has only opposed three state initiatives in the past ten years, City Supervisor John Sherman said. All three have been sponsored by Tim Eyman.
“Most Eyman initiatives are negative in terms of city revenue,” Sherman said.
The city opposed I-695 in 1999, which eliminated the state's moter vehicle excise tax and replaced it with a $30 license tab, and I-747 in 2001, which limited annual property tax
increases to 1 percent.
This year, the city is opposed to I-1033, an initiative that would cap the growth of state, county and city general fund revenues to the rate of inflation and population growth. Revenues collected above that amount would be used to decrease property taxes the following year, and voters could also approve revenue increases.
I-1033’s possible impact on Pullman is uncertain because the rate of inflation and population growth for Pullman won’t be known until 2010, Sherman said. Those figures are determined by the state Office of Financial Management.
“For what is known for I-1033, if based on 2008 figures for 2009, it probably wouldn’t have impacted us at all because of inflation and population growth,” Sherman said. “But with 2009 being a down year, it could have a fairly significant impact on 2010.”
The majority of revenue for Pullman’s general fund comes from property taxes, sales tax, utility tax and user fees. The fund covers expenses such as police and support services, public works, library, public services and general government activities. According to Pullman’s 2008 amended budget report, the city collected $14,174,051 in general fund revenue last year.
While the exact impact on Pullman is still unknown, according to the Fiscal Impact Statement for I-1033 prepared by OFM, the initiative would reduce state general fund revenues for services such as education and health and environmental services by an estimated $5.9 billion by 2015. In that same time-frame, revenue that supports public safety and infrastructure for cities and counties is estimated to be reduced by $2.1 billion and $694 million, respectively.
I-1033 sponsor Tim Eyman said the initiative has a “safety valve,” and it still allows government to grow, but at a sustainable, predictable rate.
“Government can always go to voters and ask for more money if automatic increases aren’t enough,” he said. “(Government officials) just have to justify it.”
Eyman said I-1033 is not a new idea, but a continuation of an initiative voters approved in 1993. That initiative, I-601, was similar to I-1033 and also limited state spending based upon inflation and population growth.
“I-601 worked very well for many years, allowing government to grow at a sustainable level,” Eyman said. “But the Legislature starting putting loopholes in it, removing the fiscal accountability.”
Eyman said this led to overspending when the economy was good, making the bad economic times even worse.
“We need to get off of the financial rollercoaster,” Eyman said. “I-1033 tries to strike a balance between what government says it needs and what citizens can afford.”
Opponents of the initiative said the formula for determining the allowable revenue growth is flawed.
“It is incredibly rigid and arbitrary,” said Scott Whiteaker, communications director for the No on I-1033 Committee.
Whiteaker said I-1033 could affect public health and the ability of the government to respond to health care emergencies.
“A huge number of services, such as health care, increase above the rate of inflation,” he said.
According to a report prepared by the Washington State Budget and Policy Center, the initiative would harm the state’s ability to recover from the recession.
The report states that I-1033 “would actually increase the state budget deficit by limiting the amount of revenue the state can spend once the economy bounces back,” and it would also limit the ability of local governments “to save for a rainy day.”
Eyman said government is a lot more flexible than it would like to give itself credit for.
“The goal is (for government) to only raise taxes as a last resort,” Eyman said. “Government must adapt to the fact that tax payers don’t have a bottomless wallet.”
The overall property tax rate for residents of Pullman has declined since 2003. However, this does not guarantee individuals have paid less for property taxes because the value of their property may have increased, Sherman said.
The city remains concerned that I-1033 would use 2009, a poor economic year for Pullman, as the base of future revenue limits. But impact still depends on whether voters pass the initiative in November and the rate of inflation and population growth.
“For me to say the impact on the city of Pullman will be this amount is very difficult to calculate because it is based on numbers from next year,” Sherman said.
Sources:
Pullman City Supervisor John Sherman
509-338-3212
I-1033 sponsor Tim Eyman
425-493-9127
Communications Director for No on I-1033 Committee Scott Whiteaker
206-682-2767