So much for that idea that the state can simply fill the holes caused by 695 with the reserve and surplus.

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.

-- BB (bbquax@hotmail.com), October 07, 1999

Answers

dang-

I'm liking I-695 better all the time. The legislature WON'T be able to just raid the treasury. They WILL have to do some PRIORITIZING and dump some marginal programs. They may actually have to contract out non-essential functions. That's great. The government is best which governs least.

The Craigster

-- Craig Carson (craigcar@crosswinds.net), October 07, 1999.

gee, having to make do with what ya got, boy thats has got to be the burden of Atlas. Having to prioritize your expenses and budget your money, something we all do, every day. Ya know if its too much for some of the yahoo's in state and local goverment to handle, maybe there is a good reason to pass I-695.

-- no chance (kingoffools_99@yahoo.com), October 07, 1999.

BB:

You know better than to post a story like this! You know what the replys will be!

Us folk that are for it will respond (and they have) that the Olympians must decide what programs are important to keep funded first and so on.

Don't try posting a story like this again. Besides, the PI has already shown me that they don't like 695 and will print anything from anyone who is also against it just to get people to vote NO.

If I told the PI that if I-695 passes that men from Mars will take over the state they probably would print it with a headine like: "Martians to invade the Northwest is 695 passes!"

I'm Sandy D, and I'm voting YES on I-695!

-- sandy D (sandy_d1@yahoo.com), October 07, 1999.

The PI editorial adds nothing new. Everyone knew all along that it would take a 2/3 vote to raid the surplus fund. Since we know the Democrats will vote to spend the money in a heartbeat, all we're talking about is convincing a third of the Republicans to make up SOME (please not ALL) of the loss of MVET revenues.

If the people vote for I-695, then they are giving the legislature permission to unlock SOME (again, not ALL) of the surplus. Perhaps I-695 should have lowered the license tabs starting in 2001, so the voters could have a chance to decide funding levels for mass transit, police, etc. But, let's see if our represntatives can earn their pay, for once, and they can decide for the year 2000.

The PI editorial is nothing new. After all, we're told everyday how most of the establishment politicians are against I-695. How hard can it be to convince them to spend some of the surplus?

-- Matthew M. Warren (mattinsky@msn.com), October 07, 1999.

Gee mike, how does the state monopoly on liquor sales, and Safeco Field, and unprofitable ferry runs, benefit me. Feel free to send the govenor all your extra money, I'm keeping as much of mine as I can.

-- no chance (kingoffools_99@yahoo.com), October 07, 1999.