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I-601 in the way of filling 695 gap
I-601 in the way of filling 695 gap
Thursday, October 7, 1999
SEATTLE POST-INTELLIGENCER EDITORIAL BOARD
Too bad, but there are no simple solutions to complex problems. Take the Initiative
695 proponents' "solution" to filling the gaping billion-dollar-plus hole the
initiative's passage would leave in the state budget.
"Our state has a $1 billion tax surplus," say I-695 proponents, so all the
state has to do is use that money to replace that lost if voters hack the state
Motor Vehicle Excise Tax down to $30 per vehicle. The Legislature just needs
to make up the loss out of the general fund budget, their reasoning goes,
and replace that with money in the general fund surplus.
But the Legislature doesn't have the power on its own to do that.
Who says so?
The voters said so, when they passed Initiative 601 in 1993.
I-601 put strict limits on the amount of general fund money the Legislature
could spend. Each year's spending limit is determined by how much growth there
is in population and inflation. During this year's session, for instance, the
Legislature elected to spend to within $78 million of that limit. And so the
Legislature could, by a simple majority, choose to spend that $78 million before
the end of the two-year budget cycle.
Under 601, any tax revenue the state collects in excess of that spending
limit, though, goes into an emergency reserve fund, which makes up the lion's
share of the "$1 billion surplus."
Initiative 601 makes it difficult for the Legislature to spend the money in
the emergency reserve fund -- requiring a two-thirds majority of both houses.
It makes it even more difficult, if not impossible, to exceed the spending
limit.
In approving I-601, voters agreed to "establish a limit on state expenditures,"
and to "establish a procedure for exceeding this limit in emergency situations."
The initiative goes on to define emergency situations as "limited to natural
disasters that require immediate government action to alleviate human suffering
and provide humanitarian assistance."
Even in a natural disaster, 601 requires a two-thirds majority of both houses
of the Legislature to break the spending limit.
Fiscal disaster that it may be, I-695's gutting of the MVET funds simply doesn't
qualify as a natural disaster.
And in anything but a natural disaster, state budget and policy experts tell
us, I-601 gives the Legislature no way to spend over the limit, even with a
two-thirds majority.
According to Initiative 601, the Legislature can, with a two-thirds majority,
spend money in the emergency reserve fund, but "only if the appropriation does
not cause total expenditures to exceed the state expenditure limit . . . "
So except in a declared natural disaster, according to the Office of Program
Research of the state House of Representatives and the governor's Office of
Financial Management, exceeding the spending limit may require a two-thirds
majority in each house of the Legislature plus approval of the voters
at a November general election.
Initiative 601 allows the Legislature to raise taxes with a two-thirds vote
of both houses. But if that tax increase means exceeding the spending limit,
it "shall not take effect until approved by a vote of the people at a November
general election."
Therefore, even if two-thirds of the members of the Legislature could agree
on spending the $1 billion in reserve, under 601 the earliest they could spend
it would be after they received permission from the voters in November 2000.
If spending the surplus through the general fund isn't possible, why not just
transfer the general fund surplus to the transportation and other budgets drained
of MVET money by I-695?
I-601 stands in the way of that too. It requires that any funds transfer result
in an equal decrease in the spending limit. (The R-49 transfer avoided this
provision with a built-in, one-time exemption. There is no such I-601 exemption
in I-695.) Shift a billion dollars from the general fund emergency reserve fund
to the transportation budget and next year's general fund spending limit (for
such things as education, corrections, etc.) is cut by a billion dollars.
Now, the Legislature could, by two-thirds majority, amend I-601 to repeal
these spending limit provisions and then be free to drain the savings account.
But that would be in direct conflict with the will of the people when they approved
I-601.
So if I-695 passes, which should (or would) the legislators do? Should they
act in accordance with the will of the people to retain I-601's strict spending
limits and healthy reserves as a hedge against emergencies? Or should they presume
that I-695's passage means it's the will of the people to exceed sending limits
and squander our healthy emergency reserves in exchange for a car tab tax cut
that disproportionately benefits the owners of luxury vehicles?
The spending strictures the voters imposed on the Legislature with I-601 allow
no simple way to patch the hole I-695 would blow in the budget. It's irresponsible
to tell voters otherwise.
