An article in today's News Tribune takes a hard look at five initiatives and one legislative referendum on the November ballot in Washington, and the impact they could have on the state's budget if passed.
With the state already facing a $3 billion shortfall next year, four of the five initiatives would cut state revenues by hundreds of millions of dollars, possibily billions, if passed, and cut local government revenues by half a billion dollars over the next five years. On the other hand, the fifth initiative -- Initiative 1098, a new tax on incomes above $200,000 for single filers and $400,000 for joint filers -- would bring in as much as $2.2 billion in future years if voters approve it. A legislative proposal to conduct energy upgrades on public and school buildings could cost as much as $937 million over the next five years for debt service payments.
Washington isn't the only state facing even more precarious fiscal conditions if initiatives pass this year. In Colorado, the combined fiscal impact of three proposed initiatives (Amendments 60 and 61 and Proposition 101) would cut over $3 billion from the state budget. This year's budget is $6.9 billion, so that's not small change. In Massachusetts, a proposed sales tax cut would cost the state $2.5 billion annually.
In recent election years, voters have generally been unwilling to sign off on drastic revenue-cutting measures. That includes 2008, when voters rejected a repeal of the state income tax in Massachusetts, significant cuts in personal and corporate income tax rates in North Dakota, and an opportunity to make federal taxes fully deductible on state income taxes in Oregon.
Conveying the complex information that enables voters put the cost of proposed initiatives in the context of the state budget and existing programs and services is an ongoing challenge in all of the initiative states. It is information that is too nuanced for the pro and con campaigns to address in a 30-second radio or television ad. The idea of cutting taxes is appealing to most voters, yet the reality is that tax cuts mean cuts to programs that voters may value as well. It remains to be seen how voters will weigh the costs and benefits of state programs and services in relation to a personal tax savings in 2010.
