Bonney Lake has concerns about I-1033

Like many cities and towns across the state, Bonney Lake has some major concerns about Initiative 1033, sponsored by Tim Eyman.

If passed, I-1033 would limit growth in state, county and city revenues. 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.

City Administrator Don Morrison presented the pros and cons on I-1033 during the Oct. 13 meeting. He said I-1033 creates a “Lower Property Taxes Account” in which revenues above the limit would be deposited to reduce property taxes.

Morrison said the new revenue limit base would be created during the worst recession in modern history and that city revenue has already been reduced by $1.3 million.

“The limit could not be increased to fund any new programs or services provided by the city or mandated by state or federal government, but would have to come from existing limited revenue,” he explained Morrison.

Morrison said estimated transfers to Lower Property Tax Account would be $3.1 million by 2015.

“This would have an impacts on police and street services – two of our largest General Fund operations,” Morrison noted. “The estimate assumes a slow economic recovery through 2014 and if recovery returns to the pre-2008 levels, transfer amounts would be between the $4- to $6-million range.”

The Office of Financial Management estimates that through 2015, I-1033 will reduce general revenues by $5.9 billion statewide and $2.1 billion in cities.

“The total impact for state, counties and cities would be $8.6 billion,” said Morrison.

He said while citizens might enjoy a reduction in property taxes, I-1033 would reduce the general fund, take away cities abilities to manage up and downs of economic cycle, no incentives for economic growth, and expand service responsibility or mandates without a revenue source.

Morrison said there are several unanswered questions about I-1033. For example, how will voter-approved bond be honored and would prospective bond investors respond to the initiative?

Morrison said in 1992, citizens in Colorado passed a similar law to Eyman’s initiative, but voters suspended the law in 2005.

The Colorado measure capped spending for state and local governments and then set a rigid, arbitrary formula to control growth based on population and inflation, according to no1033.org,

The proportion of low-income children with no health insurance doubled and Colorado’s per capita funding for education dropped to 49th in the nation.

The state couldn’t afford to vaccinate children entering school to help protect against diseases like whooping cough.

From 2001 to 2006, employment grew in Colorado by less than half a percent, while employment grew in surrounding states by an average of nine percent.