Initiative 1033 would slap cap on gov't growth

Hoping to strike a nerve with recession-weary voters, perpetual anti-tax activist Tim Eyman returns to the ballot this fall with a plan to put government on a strict diet, cut property taxes and give voters the final say on tax hikes.

Initiative 1033 may be the most sweeping project yet from Eyman and Co.'s direct-democracy factory, which over the years has brought Washington cheaper car tabs, 1 percent annual property tax increases, and government performance audits.

But a broad coalition of establishment figures is betting that Eyman has reached too far.

Piloting a multimillion-dollar campaign, with support from big public-sector unions and notable names in business, the opposition is aiming for the voters' self-interest along with their heartstrings.

Reheating a strategy from campaigns past, opponents are listing a truckload of government services that could get whacked under I-1033, with the most sympathetic getting top billing. The first TV advertisement focuses on K-12 education, making teacher Jenny Rose the public face of the campaign - framed by a blackboard and American flag, Rose warns that I-1033 will cut state financing for schools, driving class sizes up.

The Election Day verdict could reveal whether voters think state and local governments have suffered enough during the recession, or are cruising along relatively unscathed.

But the outcome also could hinge on how much voters trust their government, and whether they want to assert more control over the system, said Western Washington University political scientist Todd Donovan, an expert on ballot measures.

"If you take Eyman out of it, and you take the groups that are against it out of the equation, people like to have more say," Donovan said. "If they approve it, is that an anti-government message? Or is that just good old-fashioned Washington populism?"

Initiative 1033 borrows pieces from earlier smaller-government measures, enacted both here and in other states. At its heart is a cap on revenue: The main checking accounts of city, county and state governments would only grow fast enough to keep pace with the rate of inflation and yearly population growth.

Any tax money that comes in above the cap would automatically flow into a separate account, which would replace property tax revenue in the following year, cutting a taxpayer's expected bill.

Governments could collect revenue above the limit only by getting voter approval for new taxes. Some sources of income would be exempt from the cap, including federal money on the state level and the state's constitutionally protected Rainy Day Fund.

An official estimate prepared by the state Office of Financial Management says I-1033 could drain nearly $6 billion from the state general fund over six years. Cities would lose about $2 billion during that stretch, and counties would lose close to $700 million.

Eyman said I-1033 will supply some tough love that governments need to keep their spending at reasonable, sustainable levels.

Quoting from one of Gov. Chris Gregoire's state of the state speeches, Eyman says Washington government takes far too many rides on the "fiscal roller coaster" - spending like mad when times are good, such as during the recent housing bubble, and then cutting back severely when the money runs out.

With I-1033, he said, governments will still be allowed revenue increases. They'll just be more modest and predictable.

"Government is a wild stallion that doesn't want a bit in its mouth, doesn't want a saddle on its back. It wants to run free and clear with absolutely no restraints," Eyman said. "Our initiative puts a pretty good saddle on it, but it will continue to run in the direction that it wants to go."

But the opposition campaign, keying on a steady stream of headlines about state and local budget cuts, says this is the worst possible time to put the clamps on government's ability to grow.

State and local budgets have downsized and patchworked their way through the worst recession in 70 years, No on I-1033 spokesman Scott Whiteaker said. By setting 2009 as the baseline, opponents say Eyman is lining the state up for a "permanent recession."

"The worst that it's been is the best that it could get," Whiteaker said.

The strict cap, they say, also doesn't take into account that costs of public services can increase much faster than inflation and population growth. And its generic formula ignores the different economic realities of different areas of the state, opponents say.

"It doesn't matter if you live in Seattle or Dayton or Walla Walla," Whiteaker said. "It doesn't matter what your city's needs are. You're going to be under this one-size-fits-all standard."

For many of those concerns, Eyman said he's built I-1033 with a "safety valve" - if politicians don't have enough money under the revenue cap, they can always go to the voters for permission to raise more taxes.

That will likely make taxes a last resort, Eyman said, forcing elected leaders to look for savings first.

"The only time we're going to have to vote is when they fail. And you'd like to believe that they're not going to want to fail, that they're going to work very hard," Eyman said.

Whiteaker countered that such a system will simply become too unwieldy for governments, and could lead to ballot overload for voters.

Rather than stick with our established form of representative democracy, where voters hire people to make decisions on their behalf, the electorate could wind up signing off every time a city needs to fix the streets, Whiteaker said.

And in emergencies, such a system wouldn't give the government enough flexibility to respond, he argued.

"You can't really have an initiative to respond to a flood. You can't have an initiative to respond to an outbreak of swine flu," Whiteaker said.

Ballots will soon begin arriving in homes across the state, signaling the start of Washington's 2 1/2 week vote-by-mail election. Both sides have made arguments that will sound compelling to voters, and both have also been "a bit disingenuous," Donovan said.

"Kind of the whole campaign is coming down to, should you trust Eyman? Or should you trust government?" he said.

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On the Net:

I-1033: http://www.permanent-offense.org/

No on I-1033: http://noon1033.org/