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Washington Lower Property Taxes, Initiative 1033 (2009)

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Washington Initiative 1033 appeared on the November 3, 2009 ballot in Washington as an Initiative to the People where it was defeated.

The Initiative to the People was sponsored by Tim Eyman. Eyman referred to it as the "Lower Property Taxes" Initiative. [1] Opponents called it the "Jobs Killing" Initiative because they alleged it would cause thousands of public servants to be laid off from their jobs. [2]

The measure qualified for the ballot after its sponsors submitted 314,000 signatures.[3] As required by the State Constitution sponsors were required to collect a minimum of 241,153 signatures of registered voters by 5:00 p.m. on July 3, 2009.[4]

Election results

Initiative 1033 was defeated as of November 4, 2009 at 9:40 a.m. EST.[5]

Washington Initiative 1033
ResultVotesPercentage
Defeatedd No538,76855.38%
Yes 434,051 44.62%

Ballot summary

Gov. Gregoire and Secretary Reed certify 2009 election results. Photo credit: Washington Secretary of State's office

According to the description prepared by the Washington Secretary of State the ballot title read as follows:[6]

This measure would limit growth in 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. The limit also would apply to revenues transferred out of these funds. The limit would exclude voter-approved revenue increases. Revenues above the limit would reduce property tax levies. Should this measure be enacted into law?

Fiscal impact

Due to the limitations on annual state growth, state officials reported that I-1033 is expected to reduce general fund revenues by approximately $5.9 billion by 2015. The general fund supports education, social, health, environmental and general government services. Revenues that support public safety and infrastructure would also be reduced by an estimated $694 million for counties and $2.1 billion for cities.[6]

Implementation costs

The overall state cost to implement I-1033, if approved, was less than $50,000 in 2009 and 2010. The cost included set up, testing and verifying computer systems and establishing policies to implement the revenue limit, according to the state.[6]

Supporters

Logo of "Voters Want More Choices"

I-1033 was filed by three main sponsors coordinating a group called Voters Want More Choices: Tim Eyman, Leo Fagan and M.J. Fagan. Eyman argued that I-1033 would bring back "fiscal responsibility" to the state of Washington.[7]

National Federation of Independent Business

In October 2009 the National Federation of Independent Business (NFIB)/Washington announced their endorsement of I-1033. A recent vote revealed that more than 93% of NFIB members support I-1033, while 4% were opposed. "Small businesses are struggling just to keep their doors open. Higher taxes jeopardize their ability to stay in business, let alone add the jobs this state needs to pull itself out of recession," said NFIB/Washington State Director Patrick Connor.[8]

National Taxpayers Union

The National Taxpayers Union (NTU) supported I-1033. NTU said they believed that state government spending had increased at an unsustainable rate, leading to big government, high taxes, budget deficits, and a poor climate for business and economic growth in Washington. Initiative 1033, they argued, would institute modest limits on government revenue growth, allowing spending to increase at a responsible rate and staving off the future deficits that lead to tax increases and draconian budget cuts. "It's time for commonsense government in Washington. It's time for Initiative 1033," said the organization.[9] According to NTU, I-1033 would ensure that government grows at a manageable rate and protect taxpayers from the endless cycles of budget deficits and higher taxes. The measure was listed on NTU's 2009 General Election Ballot Guide. For more information on NTU's support of I-1033, take a look at their official campaign website.

Arguments in favor

The "Voters Want More Choices" website listed the following arguments in favor of I-1033:

  • In the state of Washington, "property taxes are completely out-of-control" with "huge levy increases, skyrocketing valuation increases, massive rate hikes. It’s obscene and unsustainable. Struggling working families and fixed-income senior citizens are being taxed out of their homes."
  • "We don’t want Washington to be a state where only rich people can afford to buy and own a home."
  • "Citizens desperately need property tax relief, especially during these tough economic times."
  • "The overall tax burden imposed by state government, counties, and cities is growing exponentially."
  • Currently, "there is no cap, no ceiling, no lid, no maximum, no limit on how much they can take from us. There’s simply no way that citizens can afford to have government continue to grow at an uncontrolled rate."
  • "The Lower Property Taxes Initiative I-1033 puts a reasonable cap on our overall tax burden, requiring excess tax revenues collected about the cap used to substantially reduce property tax bills."

FAQ by supporters

I-1033's supporters provided the following information in response to questions they anticipated about I-1033:

  • "How much will I-1033 lower a property tax bill?"
    • According to supporters, "The amount of reduction will be different every year. The greater the excess revenue collected by the government, the larger the property tax reduction that year. When government revenues are surging during strong economic growth, it'll knock 40% off your property tax bill. When government revenues are growing at a steady pace during regular economic times, it'll cut it by 1/3. Other years, it'll lower it by 25%. Some years, 10% less."
  • "How does I-1033 control the growth of government?"
    • "State government, all 39 county governments, and all 281 city governments each have a main account called the General Fund."
    • "Each government's general fund receives revenue from a combination of various taxes and fees that grows each year."
    • "I-1033 requires that each government receive the same total amount of tax money they collected the previous year – plus inflation and population growth."
    • "Tax revenue collected above I-1033’s tax cap will be used to reduce property taxes."
    • That means that any extra revenue collected over and above that won't "make government bigger, it'll go toward making property taxes smaller."

Opponents

No On 1033.jpg
See also: List of opponents of Washington Initiative 1033 (2009)

Opponents formed a political action committee, No on I-1033, to oppose the measure. The campaign manager was Aisling Kerins.[10]

Those in opposition to Initiative 1033 included:

In October 2009 state treasurer Jim McIntyre said that he would not be voting in favor of I-1033 because he believed it would do "financial damage" to the state. Additionally McIntyre noted that I-1033 could affect the state's bond rating.[11]

Seattle-Northwest Securities Corporation

On October 9, 2009, the Seattle-Northwest Securities Corporation (SNW) announced its opposition of I-1033. "Simply put, this initiative is bad for all Washingtonians. It will mean less money for essential services like basic education, roads, police and fire protection. It will also make it harder for the State to rebound from the recession and it limits the ability to set aside 'rainy day' funds for future downturns. We strongly urge a no vote on I-1033," said Dick Schober, Managing Director of Public Finance at SNW.[12]

Washington State's Catholic bishops

In October Washington State's Catholic bishops announced their objection to I-1033. "We recognize that many people find state and local taxes burdensome. Tax policy and government funding, however, must take into consideration the needs of those who rely on adequate public support for education, health care and other essential services. Initiative 1033 would establish an arbitrary formula for limiting taxes and spending without regard to the needs of others, and therefore, for us it does not meet the test of distributive justice," the organization said in a statement.[13][14]

Arguments against


TABOR video posted by No on I-1033

Arguments made against I-1033 by its opponents include:

  • The concern that it could reduce critical public services at the state and local levels.
  • Arguing that the historical cost increase of public spending in areas such as health care and education has exceeded the consumer price index, opponents of I-1033 say that if I-1033 passes, spending in these areas will not be able to grow at the levels they have historically grown at.
  • The belief that government services will be reduced each year from the previous year.
  • It is problematic because "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."
  • "[T]his initiative is 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."
  • "Shifting from the property tax to other tax sources makes our tax system less stable because property taxes are one of the least volatile revenue sources we have."
  • "The reality is that the whole concept of contrived, artificial limits on revenue is completely unreasonable to begin with. In practice such limits have been utterly unworkable. Other states, like Colorado, have imposed them and seen their quality of life suffer drastically as a result."

FAQ by opponents

I-1033's opponents provided the following information in response to questions they anticipated about I-1033:

  • "What factors besides inflation and population growth cause a natural increase in the cost of providing public services year to year?"
    • Two of the several examples of factors that might affect a natural increase in costs are new development and disease prevention/treatment.
      • New development: for example, when someone builds or remodels something on property that was previously wild, fallow or unused, will require not only maintenance and resources for the development but also for the increased foot and vehicular traffic. "If public services are not strengthened as new development occurs, quality of life gets weaker and weaker." This, according to opponents is something that I-1033 does not account for.
      • Healthcare: "Preventing diseases and treating them when they infect people is vitally important to safeguard public health, but it costs money to do both. And those costs can spike at inconvenient times, especially if a pandemic breaks out or threatens to, as we have seen with the H1N1 virus (also known as swine flu)." Additionally, illnesses can impact the workplace. These, according to opponents is also not accounted for by I-1033.

The main problem with I-1033, argued opponents, is that, "We need flexibility when budgeting to solve the problems and challenges that confront us. I-1033's rigidity imposes needless artificial barriers that would get in the way."

Campaign contributions

$4,254,411 was reported to have been contributed to campaigns relating to Initiative 1033, $727,049 in support and $3,527,362 in opposition. In addition, $4,086 in independent expenditures were also reported, $476 in support and $3,610 in opposition.[15]

Requirements

See also: Campaign finance requirements for Washington ballot measures

According to the state's campaign finance requirements the Washington State Public Disclosure Commission (PDC) requires that any ballot proposition group that expects to expend $10,000 or more in the current year are required to file campaign finance reports electronically.

State law also stipulates that during the 21-day period prior to an election, contributors may not donate over $5,000 to a ballot proposition group.[16]

Supporters

According to late October 2009 reports, Voters Want More Choices raised approximately $399,133.92 in cash, had $250,000.00 in loans and spent $625,764.70.[17]

Below is a chart that outlines major cash contributions to the Voters Want More Choices Campaign, as of October 2009:[17]

Contributor Amount
Mike Dunmire (retired) $300,000
Kemper Holdings LLC $25,000
Duane Alton (store owner) $5,000
Electric Contractors Association $3,000
Rolan Becker (self-employed) $2,000

Opponents

According to late October 2009 reports, No on I-1033 raised approximately $3.46 million and spent $107,304.77.[18][19]

Below is a chart that outlines major cash contributions to the No on I-1033 Campaign, as of October 2009:[18]

Contributor Amount
National Education Association $328,600
American Federation of State, County and Municipal Employees (AFSCME) $325,000
Service Employees International Union (SEIU) $297,500
Bill Gates $100,000
Washington State Council of County & City Employees $87,500

Media editorial positions

See also: Endorsements of Washington ballot measures, 2009

Editorial boards in support

  • John Carlson, columnist for Bellevue Reporter and radio host of a daily radio program, “The Commentators," supported I-1033. Carlson argued that Olympia and King County were currently facing financial problems in light of "abandoned spending control. They refused to apply the brake. The public is now going to do it for them."[20]
  • The Chronicle supported Initiative 1033. The editorial board said, "We maintain our state government spends too much of our money and without outside pressure and laws such as I-1033, those running our governments will continue to turn toward higher taxes to fund ever-expanding programs. Vote yes on I-1033."[21]

Editorial boards opposed

  • The Seattle Transit Blog opposed I-1033. They said, "Initiative 1033, offered by Tim Eyman, would lock Washington State into using its most perilous budget well into the future.The initiative does not take into account that tax revenues were drastically lower this year due to a deep recession. Tax revenues wouldn’t be able to grow faster than inflation and population growth, and that is a recipe for putting government into a permanent rescission."[22]
  • The Seattle Times opposed the initiative. "I agree. If I-1033 passes, the state Office of Financial Management predicts a $5.9 billion budget hole over six years. There is no way that education, human services, criminal justice and natural resources will not suffer as a result. Colorado voters fell for promise of tax relief but the result was horrific. After the Taxpayer Bill of Rights (TABOR) passed in 1992, the state dropped to 49th in funding for K-12 education; higher education spending declined by 39 percent," said Lynne Varner, editorial columnist.[23] [24]
  • The Spokesman-Review opposed the initiative. "Most people in this region are willing to shoulder a reasonable tax burden to pay for fundamental government services, and they’re eager for the economic recovery that will make it possible. Initiative 1033 would only prolong the difficult times."[25]
  • The Yakima Herald-Republic opposed I-1033. They said, "What concerns us also are the cutbacks that will befall our cities and counties under Eyman's initiative. His main beef has always been with what he calls free-spending state lawmakers. So why drop a sledge-hammer on cash-strapped towns and counties? Due to plunging sales and property taxes, Central Washington municipalities and counties are facing extreme budget shortfalls despite being, as a group, fiscally prudent. But under Eyman's initiative, that doesn't matter."[26][27]
  • The Daily Evergreen opposed the initiative. They said, "I-1033 is based on an ideology, not reality. It would force every city and county – regardless of size – to adhere to the same one-size-fits-all policies. Every community has different problems and priorities that cannot be addressed in the same uniform manner."[28]
  • Walla Walla Union-Bulletin opposed I-1033. The editorial board said,"This proposal, which is co-sponsored by Tim Eyman, puts unreasonable and unnecessary constraints on government. This could - and likely will - result in cuts to schools, law enforcement, fire protection and street maintenance that voters didn't expect or want. I-1033 is so rigid in capping revenue that it forces government to run on autopilot. It doesn't allow our elected leaders to use judgment and reason."[29]

Lawsuits

  • Voters Want More Choices, Tim Eyman and Jack and Mike Fagan, filed a lawsuit on September 8, 2009 in Thurston County against Washington state officials in order to halt the use of ballot language that they argued was "erroneous" and "misleading." According to the lawsuit, ballot measure supporters argued that the ballot language was intended only to provide examples of revenue sources rather than an exclusive list of revenue sources covered by the initiative. Additionally, they wanted to remove exclusions from the revenue limit of state and federal grants received by cities and counties.[30]
    • Judge Richard Hicks ruled that the ballot language wouldn't be changed.[31] According to Judge Hicks, he doesn't have the authority to change the language unless there is evidence of an egregious error. Hicks said,"There may be differences of opinion. I can’t say there is a clear error in the fiscal impact statement."[32]

Path to the ballot

Required signatures

Secretary of State Sam Reed announced on July 15, 2009 that Initiative 1033 had enough valid signatures to qualify for the November ballot. In order to meet the state signature requirements, initiative supporters had to acquire a minimum of 241,153 valid signatures.[33]

Filed signatures

On July 2, I-1033 sponsors submitted a total of 315,444 signatures, of which a random sample of 9,614 signatures revealed a 12% error rate an "unusually low invalidation rate."[33]

Public records request

In early August 2009 the National Education Association filed a request for copies of petitions that were submitted and verified for Initiative 1033.[34] The association called the request a "a fairly routine request." Eyman, however, questions the association's reason for requesting the information, particularly with current issues (signature privacy, release of donor names) that have come to light about Referendum 71. Eyman said, "Is the National Education Association’s Charles Hasse joining Whosigned.org by publishing names and addresses of Washington state’s citizens who signed I-1033 petitions? What other reason would there be for these Washington DC ‘big guns’ to get the names and addresses of Washington state citizens who signed I-1033 petitions?"[35]

Eyman files lawsuit

On October 13, 2009 Eyman filed a lawsuit to block the release of petition signatures relating to approximately 11 initiatives (including this years I-1033).[36] Eyman argues that the signers' identities are protected by the freedom of speech. According to reports a hearing is scheduled for Wednesday in Thurston County Superior Court.[37]

Judge Richard Hicks of the Thurston County Superior Court granted a temporary restraining order on October 15, 2009.[38]

In early September 2010, Thurston County Judge Richard Hicks dissolved an injunction on the release of the signatures.[39] A restraining order had previously been imposed after Tim Eyman filed a lawsuit after debate began regarding to the release of 2009's Referendum 71 petition signatures and a political consultant asked for copies of the signatures. The lawsuit requested blocking the release of petition signatures relating to approximately 11 initiatives (including 2009's I-1033).

In reaction to the news, Eyman said, "We were gratified that the Secretary of State said that they will inform the requestor that he cannot use any of this information for commercial purposes, which was one of the concerns we had in the lawsuit."[40]

Although the restraining order was dismissed, Judge Hicks has not dismissed the legal case.[41] The case was dismissed in November 2010. In reaction to the dismissal, Eymann said, "We’ll continue to monitor the federal lawsuit and pursue other ways to counter this injustice. For 95 years in Washington state, petition signers’ personal information was protected. Let’s hope there comes a day when we can return to that common sense policy."[42]

Polls

See also: Polls, 2009 ballot measures
  • A poll conducted October 14 – 26 by the Washington Poll revealed that 41% of voters planned to vote in favor of I-1033, while 46% were opposed and 13% were undecided. They polled 724 registered voters. The margin of error is reported to be +/- 3.6%.[43] [44]
  • KING5/SurveyUSA conducted a survey of 1,050 adults between October 3-October 5. The poll showed I-1033 ahead by 13% points, with 22% of those surveyed undecided.[45][46]
  • On September 22, 2009 Rasmussen Reports presented poll results that revealed that 61% of voters planned to vote "yes" on I-1033, while 31% planned on voting "no" on the measure.[47]
  • According to a poll conducted by pollster Tom Kiley, sponsored by I-1033 opponents, 51% of surveyed voters supported the measure, while 31% opposed the measure.[48]
Date of Poll Pollster In favor Opposed Undecided
September 2009 Tom Kiley 51% 31% 18%
Sept. 22, 2009 Rasmussen Reports 61% 31% 8%
Oct. 3 - 5 KING5/Survey USA 45% 32% 22%
Oct. 14 – 26 Washington Poll 41% 46% 13%

TABOR in Colorado

See also: TABOR, Colorado example

TABOR was approved in Colorado in 1992. In 2000 an amendment to Amendment 23 required education spending to increase and in 2005 voters approved a ballot measure that loosened many of TABOR's restrictions. However, in 2008 voters rejected Colorado Initiative 126, also known as Amendment 59, which would have extended the 2005 amendment which is scheduled to end in 2010. In 2009 Gov. Bill Ritter announced that he is currently working with groups to propose an initiative that addresses eliminating portions of TABOR for the 2011 state ballot.

Opponents of 1033 argue that the state of Colorado has suffered in light of TABOR and the limits in government the 1992 act imposed. However, some Coloradoans argue otherwise. "Nothing could be further from the truth," said Barry Poulson,Senior Fellow in Fiscal Policy at the Independence Institute. According to Poulson TABOR helps strengthen fiscal rules and policies "conducive to economic growth and prosperity, and prevents the kind of fiscal debacle occurring in California."[49]

Other TABOR measures

ApprovedaColorado Taxpayer Bill of Rights Act (1992)
DefeateddMaine Taxpayer Bill of Rights Initiative (2006)

See also

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Suggest a link


Articles

Signature privacy

External links

Supporters

Opponents

Additional reading

Editorials

References

  1. Seattle Times, "Eyman begins state's '09 initiative drive with new plan to rein in property taxes", January 6, 2009
  2. Permanent Defense "NO on Initiative 1033", May 17, 2009
  3. Associated Pres,"Property tax initiative moves toward Wash. ballot," July 2, 2009
  4. Tacoma News-Tribune, "Eyman starts signature drive on I-1033, Lower Property Taxes", January 28, 2009
  5. Washington Secretary of State,"2009 Election Results," last retrieved November 4, 2009
  6. 6.0 6.1 6.2 Washington Secretary of State,"Initiative Measure 1033," retrieved September 25, 2009
  7. The Daily Evergreen,"I-1033 brings back fiscal responsibility," retrieved October 13, 2009
  8. NFIB,"NFIB endorses Initiative 1033 and three State House candidates," retrieved October 19, 2009
  9. Taxpayers for 1033,"About Us," retrieved October 25, 2009
  10. Public Disclosure Commission "View Reports for NO on Initiative 1033: C1-PC Political Committee Registration" September 17, 2009
  11. King5,"Treasurer says I-1033 could hurt state's bond rating," October 12, 2009
  12. Seattle-Northwest Securities Corporation,"SNW Opposes Initiative 1033," October 9, 2009
  13. Washington State Catholic Conference,"Initiative 1033," retrieved October 11, 2009
  14. Seattle Post Intelligencer,"Faith leaders oppose I-1033," October 13, 2009
  15. Follow the Money, Initiative 1033"
  16. "Washington State PDC" Campaign Contributions Limit Chart(See Bottom of Page 1)
  17. 17.0 17.1 Washington Public Disclosure Commission,"Voters Wnat More Choices Committee," retrieved October 13, 2009
  18. 18.0 18.1 Washington Public Disclosure Commission,"No on I-1033 Committee," retrieved October 13, 2009
  19. Herald Net,"I-1033 a costly contest," October 31, 2009
  20. Bellevue Reporter,"John Carlson | Why you should vote YES on I-1033," October 12, 2009
  21. The Chronicle,"Our Views: Yes on Initiative 1033, No on Ref. 71," October 19, 2009
  22. Capitol Hill Seattle,"Seattle Transit Blog: No on I-1033," October 13, 2009
  23. The Seattle Times,"Initiative 1033 would cut into already lean budgets," October 11, 2009
  24. The Seattle Times,"Seattle Times election endorsements," October 30, 2009
  25. Spokesman-Review,"Editorial: Tough times would last longer under I-1033," October 11, 2009
  26. Yakima Herald-Republic,"I-1033's cost outweighs savings, should be defeated," October 11, 2009
  27. Seattle Times,"Approve Referendum 71 in the name of fundamental fairness for all Washington families," October 2, 2009
  28. The Daily Evergreen,"I-1033 will hamstring local government," retrieved October 19, 2009
  29. Walla Walla Union Bulletin,"I-1033 puts unreasonble constraints on state and local governments," October 15, 2009
  30. The News Tribune,"I-1033 backers fight wording," September 5, 2009
  31. Associated Press,"Judge won't edit Wash. voter's pamphlet for I-1033," September 11, 2009
  32. The Olympian,"Backers of revenue cap initiative lose bid to change ballot wording," September 12, 2009
  33. 33.0 33.1 Washington Secretary of State,"Eyman’s I-1033 cleared for November ballot," July 15, 2009
  34. KPLU,"Battle Heats Up Over Voter Petitions," August 5, 2009
  35. The News Tribune,"Eyman questions education group’s look into initiative," August 3, 2009
  36. Herald Net,"Suit filed to keep Eyman initiative signers' names secret," October 13, 2009
  37. Associated Press,"Second Wash. lawsuit over voter petitions," October 13, 2009
  38. Seattle Post Intelligencer,"Judge blocks release of Eyman petitions," October 14, 2009
  39. The Spokesman-Review,"Judge allows initiative signatures to be released," September 3, 2010
  40. Oregon Public Broadcasting,"Judge Allows Washington State To Release Many Ballot Petitions," September 3, 2010
  41. Washington's: From Our Corner (blog),"Thurston judge OKs release of initiative petitions," September 3, 2010
  42. Publicola,"Eyman’s Case to Shield Signatures Dismissed. Related R-71 Case Set for Trial," November 19, 2010
  43. Washington Poll,"2009 ballot measures," October 27, 2009
  44. Washington Secretary of State: From our corner,"WA Poll: R-71 leads, I-1033 trails," October 27, 2009
  45. SurveyUSA,"Results of SurveyUSA Election Poll #15877," October 2009
  46. The Oregonian,"Poll shows Washington voters divided on domestic partnerships and tax limits," October 7, 2009
  47. The News Tribune,"Eyman: Poll shows I-1033 passing 61-31," September 29, 2009
  48. Seattle Post Intelligencer,"Eyman initiative foes start to make up ground," September 24, 2009
  49. The Bellingham Herald,"Coloradoan says tax-limiting initiative there has worked," September 27, 2009