Eyman initiative looks likely for November ballot

OLYMPIA — Tim Eyman apparently has qualified another initiative that attempts to limit the growth of government, and potentially return large amounts of money to taxpayers.

Eyman turned in 314,277 signatures Thursday, the deadline for submitting petitions. State law requires at least 241,153 valid voter signatures to qualify for the November ballot. The Secretary of State's Office advised having around 300,000 to cover duplicate or invalid signatures.

Initiative 1033 would limit revenue increases for state, city and county governments to the rate of inflation plus population growth. Additional money would have to be used to reduce the state property tax.

"Our property taxes keep growing faster and faster and government keeps getting bigger and bigger. The people are losing control," Eyman said at a news conference Thursday.

Critics of the measure say it has serious flaws, will hurt the state's economy and will make it more difficult for the state to recover from the recession.

Eyman has sponsored a series of initiatives over the years dealing with taxes, state spending and transportation, with mixed success.

In 2007, voters approved I-960, which requires a two-thirds vote in the Legislature, or voter approval, to increase taxes.

Under state law, it takes a two-thirds vote of the Legislature to amend an initiative the first two years after it's approved by voters. After that, lawmakers can change the measure with a simple majority vote.

Eyman said he's worried lawmakers will try to unravel I-960 next session because two years will have passed since the initiative was approved.

He sees I-1033 as another barrier to raising taxes without voter approval. The initiative "says if you raise taxes without a vote of the people you'll have to give it back the following year by lowering the property-tax burden. So maybe you shouldn't do that," Eyman said.

I-1033 allows governments to put tax increases to the voters. If approved, the new tax revenue would be exempt from the initiative's limits.

The state's constitutionally protected rainy-day fund also would not be affected by the initiative. One percent of state revenue collected annually goes into the reserve account.

Jeff Chapman, research director for the Washington State Budget and Policy Center, a private, progressive-leaning think tank, said the initiative fails to take into account unanticipated events, such as natural disasters and unfunded federal mandates that could require larger expenditures than allowed under I-1033.

In addition, he said, the initiative would make it harder for the state to restore cuts made during a recession.

"There's no averaging over a group of years," Chapman said. "So if during a recession, revenue drops like it is doing this year, the following year's limit is based on that lower number."

For example, he said the state projects it will have an additional $1 billion in revenue between 2010 and 2011. However, the I-1033 formula would send more than half that amount into a fund to reduce state property taxes.

Christian Sinderman, a spokesman for the No on 1033 Coalition, said the measure would lock the state into a "permanent recession" that will "make it next to impossible for us to restore the cuts to education and health care."

Opponents compare Eyman's initiative to Colorado's Taxpayers' Bill of Rights, TABOR, which also used a population, plus inflation formula to limit state spending.

That law, they say, led to sharp drops in funding for public schools and higher education. Colorado voters, in 2005, suspended the constitutional limit for five years.

Eyman argues his measure is more targeted because the Colorado law applied to all governments including school districts. I-1033 only affects city, county and state government.

In addition, Eyman's initiative can be changed by lawmakers with a simple majority vote after two years and the Legislature can try to increase spending above the revenue cap by asking voters for more money.

State Sen. Joe Zarelli, R-Ridgefield, the ranking Republican on the Senate Ways and Means Committee, said he's concerned the initiative could lead to large swings in the property tax. When the economy is good, taxpayers could get significant breaks that would disappear when the economy slows down.

"That would be my chief concern, that it doesn't permanently reduce the property tax by that amount," he said.

But he added: "Ultimately, I support property-tax reduction. We're giving back money to the public that we'd otherwise just use to increase spending. It's going to have some flaws, but all in all it will do a better thing with the excess revenue than we do now."

Andrew Garber: 360-236-8266 or agarber@seattletimes.com