AWC Legislative Bulletin - Volume 32, Interim No. 1
July 31, 2009  (Plain Text Version)

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In this issue:
Initiative 1033, concerning city revenues and lowering property taxes, to be on November ballot
Changes at AWC
AWC prepares for 2010 Legislative session - how you can provide input
AWC 2010 legislative policy development process
Energy & telecommunications
Federal issues
General local government
Infrastructure, economic development and transportation
Law & justice
Municipal finance
Personnel and labor

Initiative 1033, concerning city revenues and lowering property taxes, to be on November ballot

On Wednesday, July 15, 2009 Secretary of State Sam Reed announced that Initiative 1033 has enough valid signatures to qualify for the November statewide ballot. Initiative co-sponsor Tim Eyman filed the initiative with the Secretary of State’s Office about two weeks earlier with a reported 315,444 signatures. The initiative needed 241,153 valid signatures by July 2, 2009 to be placed on the ballot.

I-1033 in a nut shell

I-1033 is intended to 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 cap on revenues would fluctuate annually based on any change in population and inflation. Any additional revenues collected above the cap would be placed in a “Lower Property Taxes Account” and used to reduce the property tax levy.

The initiative excludes new voter-approved revenue from the growth limit; however, this is defined as “the increase in revenue approved by the city’s voters at an election after the effective date of this act.” Since the November election is the last of 2009, any voter-approved tax increases passed in 2009 (or earlier) would likely be subject to this initiative and not excluded from the revenue limitations.

If any city program or function is shifted from the current expense fund after January 2009 to another source of funding, or if it is transferred from the current expense fund to another fund or account, the limit would still apply to the aggregate of the current expense fund plus the shifted and/or transferred revenue for that year and all subsequent years.

There is a good deal of debate and questions over which revenues would be subject to the cap. The initiative defines general fund revenue as “the aggregate of revenues from taxes, fees, and other governmental charges received by the city that are deposited in the city’s current expense fund.” Although estimates of fiscal impacts will be completed by the Office of Financial Management and many cities and counties prior to the November election, questions surrounding the initiative will likely not be clarified by the Attorney General’s Office until after the initiative becomes law, if it is approved by the voters.

Office of Financial Management fiscal impact statement

The Office of Financial Management is required to provide a fiscal impact statement to the Secretary of State by August 10. This analysis will include a forward-looking estimate of I-1033’s impacts on the state as well as cities and counties. We understand the analysis for cities and counties will not be done at the jurisdictional level. OFM is in the process of developing this impact statement and as soon as it is released, AWC will post it on our website and alert cities.

AWC’s role

AWC will continue to provide information about I-1033 for educational purposes. This will include assisting cities in determining the fiscal impact of the initiative on their city.

As soon as the OFM impact statement is released we hope to be able to provide cities with a formula from which you can forecast your city’s future revenue and population growth (IPD would be provided). This should allow your city to develop a rough estimate of how I-1033 could impact your city.

Please check our website for additional information about I-1033 at www.awcnet.org/initiatives. This website includes:

  • A summary of I-1033
  • The full initiative text
  • Articles about city official responses to I-1033, including an article by Seattle Councilmember Jean Godden in Crosscut
  • Links to the sponsors’ website and the Vote No on I-1033 website
  • Resources from the Public Disclosure Commission and Attorney General’s Office about elected and appointed officials ballot measure campaign activities and use of public funds

The Association of Washington Cities provides information for educational purposes only. This is not intended to be an expression for or against a ballot measure. AWC will continue to provide information about the fiscal impacts of this initiative on cities. City officials may want to consult legal advice for specific impacts on your city.