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HomeMy WebLinkAboutITEM VIII-B-4C[1", Y OF = ~ * ~ AGENDA BILL APPROVAL FORM _•""WASHINGTON Agenda Subject: Initiative 1033 (I-1033) Date: September 28, 2009 Department: Attachments: I-1033 Compete Text, Budget Impact: Legal I-1033 Fiscal Impact Statement, and Resolution No. 4534 Administrative Recommendation: Cit Council ado t Resolution No. 4534. Background Summary: Initiative 1033, Concerning State, County and City Revenue is a state-wide measure that will be on the November 2009 ballot. This initiative, co-sponsored by Tim Eyman, Jack Fagan, and Mike Fagan, would limit the growth of state, county and city general fund revenues received from taxes, fees, and other charges not expressly approved by the voters. Initiative 1033 applies only to the state, counties and cities, and would not directly apply to ports, public utility districts, transit districts or other governmental entities. Initiative 1033 would apply starting with general fund revenues received in 2010 with the limit set at the 2009 level. 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 AccounY' 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 (including Auburn's voted tax increase - SOS Program) would likely be subject to this initiative and not excluded from the revenue limitations. Opponents of Initiative 1033 are concerned that the initiative will slow economic recovery by making recessionary revenues the new baseline. Opponents compare I-1033 with a similar initiative passed in the state of Colorado in 1992 that was suspended in 2005 due to its critical economic problems. The Fiscal Impact Statement for Initiative 1033 from the Washington State Office of Financial Management indicates that "[t]he initiative would reduce state general fund revenues that support education; social, health and environmental services; and general government activities by an estimated $5.9 billion by 2015." According to the Public Disclosure Commission, and in accordance with RCW 42.17.130 (below), City Councils may collectively vote to support or oppose a ballot measure at a properly noticed public meeting, where supporters and opponents of the measure are given an equal opportunity to express views. A1005-1 A3.4 Reviewed by Council & Committees: Reviewed by Departments & Divisions: ❑ Arts Commission COUNCIL COMMITTEES: ❑ Building ❑ M&O ❑ Airport ❑ Finance ❑ Cemetery ❑ Mayor ❑ Hearing Examiner ❑ Municipal Serv. ❑ Finance ❑ Parks ❑ Human Services ❑ Planning & CD ❑ Fire ❑ Planning ❑ Park Board ❑Public Works ❑ Legal ❑ Police ❑ Planning Comm. ❑ Other ❑ Public Works ❑ Human Resources ❑ Information Services Action: Committee Approval: ❑Yes ❑No Council Approval: ❑Yes ❑No Call for Public Hearing Referred to Until _ Tabled Until Councilmember: Backus Staff: Heid Meeting Date: October 5, 2009 Item Number: VIII.B.4 ~1►.UBUFCN *MORE THAN YOU IMAGINED Agenda Subject: Initiative 1033 Date: September 28, 2009 The full text of Initiative 1033 and the Fiscal Impact Statement from the Office of Financial Management are attached to provide additional background information. RCW 42.17.130 Forbids use of public office or agency facilities in campaigns. No elective official nor any employee of his office nor any person appointed to or employed by any public office or agency may use or authorize the use of any of the facilities of a public office or agency, directly or indirectly, for the purpose of assisting a campaign for election of any person to any office or for the promotion of or opposition to any ballot proposition. Facilities of pubiic office or agency include, but are not limited to, use of stationery, postage, machines, and equipment, use of employees of the office or agency during working hours, vehicles, office space, pubiications of the office or agency, and clientele lists of persons served by the office or agency: PROVIDED, That the foregoing provisions of this section shall not apply to the following activities: (1) Action taken at an open public meeting by members of an elected legisiative body to express a collective decision, or to actually vote upon a motion, proposal, resolution, order, or ordinance, or to support or oppose a ballot proposition so long as (a) any required notice of the meeting includes the title and number of the ballot proposition, and (b) members of the legislative body or members of the public are afforded an approximately equal opportunity for the expression of an opposing view; (2) A statement by an elected official in support of or in opposition to any ballot proposition at an open press conference or in response to a specific inquiry; (3) Activities which are part of the normal and regular conduct of the office or agency. Page 2 of 2 Initiative 1Vleasure N0. 1033 Filed ~AN o 9 2009 SECR'EraRY cF sTarE CQMPLETE TEXT AN ACT Relating to protecting taxpayers by limiting the tax burclen on Washingtan's citizens; adding a new section to chapter 43.135 RCW; amending RCW 84.52,065; adding new sectians to chapter 36.33 RCW; adding new sections to Title 35 RCW; addzng new section.s ta Title 35A RCw; amending RCW 84,52.043; amending RCW 84.55.010; and creating new sections. BE IT EIVACTED BY THE PEOPLE OF THE STATE OF WASHINGTON: POLICIES AND P[TRPCISES NEW SECTION. Sec. 1. This measure is intended to protect taxpayers by reducing our state's obscene and unsustainable property tax burden by controll.ing the growth of governrnent ta an affordable level. It a.s long overdue. This measure would limit the growth rate of state, county, and city general fund revenue, not including new voter-approved revenue, to inflatian an.d population grawth. Excess revenue cal.lected abovs these limits wcruld be used to reduce property taxes. This measure permits the growth of Washington's tax burden to increase at an affordalale, sustainable rate, al2ows citizens to vote for higher taxes whexe they see a need, and uses excess revenues above this limit ta reduce pxoperty taxes. Intent of sections 2{7}, 4(7), 6{7} and 8(7): Voter-approved increases in reverxue are exempt from this measure's revenue limit. This includes binding vates of the people and does not include a revenue incsease approved by an advisory vote. The language of this Code Rev/JM:seg1 I0$116/20021 I-1630,1/03 act is clearly intended to ensure that voter approval of a property tax levy lid lift only exempts the additional increase in property tax revenue and nat the base levy. Intent of seetions 2(8), 4(8), 6(8) and 8(8): In order to ensure affordability, sustainability, and pzedictability of the people`s tax burden, the rate of growth of general fund revenue, nat including new voter-approved revenue, shall not exceed inflation and population growth. The general fund revenue limit for 2010 will be the revenue collected and received in 2009, adjusted for inflation far 2009 and populatian growth using deterrninations by the office of financial management in 2009 and 2014 (new voter-apprpved revenues are exempt). The general fund revenue limit in 2011 will be the general fund revenues received in 2010 that do nat exceed the limit for 2010, adjusted for inflation and population grawth using determinations by the aff1Ce of financial managernent in 2014 and 2011 (new voter-approved revenues are exempt). The people want the revenue limit for any year to be the previous year's general fund revenue plus an adjustment for that year's inflation and population growth. This will ensure that the rate of grawth of our tax burden does nat exceed the taxpayers' ability to affard it. Intent concerning inflation and population growth: This rneasure limits state, county, and city general fund revenue increases, not including new vater-approved increases, to inflation and population growth. The office of financial management reports the bureau of ecanomic analysis' calculatiQn for annual inflation on March 27 following each calendar year; this measure uses that calculatiari to define inflation. The office of financial management annually develops and tracks populations tar the state, counties, and cities and generally reparts its determinations each year an June 30. It is an extensive, detailed and long-standing demographic prograrn. This measure defines populaCion growth as the percentage change in population based on those determinations made in the current year Code Rev/JM:seg2 [08/1512002] 5-1630.1/03 and the previous year; this measure uses those calculations to define population grawth. Intent af secrion 11: Property tax increases are currently limited ta ane pErcent per year. This measure makes no change ta the calculation of that limit. Instead, it xequires a reduction in property taxes when general fund revenues exceed the revenue limit. Intent related to reserve accaunts: This measure exempts fund transfers in and out of the canstitutionally required rainy day fund for the state. In regard to cities and counties, this measure makes no change to the ability of any city ar county to use existzng and future reserve funds to supplernent their general fund revenue when revenue is below their revenue limit. During these tough economic times, struggling working families and fixed-incame senior citizens desperately need and deserve rneaningful properry tax relief, Praperty taxes have skyracketed for decades and politicians have done nothing to address this very real prflblem. This measure also pravides a much-needed economzc stimulus to our state's struggling economy by keeping our tax burden at an affardable, sustainable level and by reducing our state's crushing property tax burden. So, this measure ensures meaningful tax relief, a big boost to aur state's econorny, and long-overdue reforrn af government. It is a smart, balanced, reasonable salution to our state's property tax problem. LZMITTNG THE TAX BURDEN OF WASHINGrtON'S CITIZENS ITY LIMITING THE GRC)WTH OF STATE GOVERNMENT' 3 GENERAL F[TND REVENUE, N4T TNCLLTDIlrIG NEW VC?TER-APPROVED REVENUE, TO INFLATIUN 31ND POPUI,A.TION GROWTH. EXCESS REVENUE A.BUV'E THIS LIMIT WQULI? BE USED Z'f3 REDUCE PRO1sERTY TAXLS IMP4SEI} BY STATE GOVERISMENT NEw SEC2'zoN, Sec. 2. A new section is added to chapter 43.135 RCV+1 to read as follows : (1) The growth rate of state government general fund revenue, not including new voter-approved revenue, must be 1ima.ted to in,flation and population grawth. As provided in subsaction (8) oE this Code ftev/JM:seg3 [08/15/2002] I-1630.1/03 sectian, any revenues received ahove this lirnit must be deposited inta a new account hereby created called the "Lower State Pxaperty Taxes Account." All revenues received during a year which are depasited in this account must be used to reduce the subsequent year's state property tax Zevy as pravided in section 3 of this act. (2) For purposes of this section, "general fund revenue" means the aggregate of revenue from taxes, fees, and other governmental charges received by state government that are degosited in any fund subject to the state expenditure limit under RCW 43.135.025. "General fund revenue" does not include the funds required to be transferred into the fund created under Article 7, Section 12 of the state constitution and does not include funds transferred from that fund. "General fund revenue" does not include revenue received fxom the federal government. (3) Foz the purposes of this section, "inflation" means the annual percentage change in the implicit price deflator far the United States as published on or about March 27 following each calendar year by the bureau of economic analysis and reparted by the office of financial management. (4) For purposes of this section, "population growth" means the percentage change in the statewide population based on the annual statewide population determinations reported by the otfice of financial management during the prior calendar year and the current calendar year. (5) If the cost of any state program or function is shifted from the state general fund or any fund subject to the state expenditure limit under RCW 43,135.025, on or aftex January 1, 2409, to another saurce of funding, or if revenue is transferred from the state general fund ar any fund subject to the state expenditure limit under RCW 43.135.025 to another fund or account, the limit required by this section shall apgly to the aggregate of funds subject ta the state expenditure limit under RCW 43.135.025, plus the shifted and/or transferred revenue for that year and all subsequent years. (6) If the cost of any state program or function and the zevenue to fund the program ar function are shifted to the state general fund or any fund subject to the state expenditure limit under RCW Code RevlJM:seg4 10$/16l2002] I-1630.1/03 43.135.025, on or after January 1, 2409, the limit required by this section shall apply to the aggregate of funds subject to the state expenditure limit under RCW 43.135.025, including the Shifted revenue for that year and a11 subsequent years. {7} For the purposes of this section, "new voter-approved revenue" is defined as the increase in revenue appraved by the state`s voters at an election after the effective date of this act. {g} The limit established in subsection (1) of this section must be implemented as follows: (a) For the first calendar year beginning after the effective date of this act, the general fund revenue, not including new voter- approved revenue, received above the amount received in 2009 adjusted by any amount necessary ta reflect inflation for the 2009 calendar year and population growth, must be deposited in the "Lawer State Property Taxes Account." (b) For subsequent years, the general fund revenue, not including new voter-approved revenue, received aboue the amount received in the immediately prioz calendar year, less any deposits into the "Lawer State Property Taxes Account," adjusted by any amaunt necessary ta reflect inflation for the immediately prior calendar year and population growth, must be depasited in the "Lower State Property Taxes Account." 3ec. 3. RCW 84.52.065 and 1991 sp.s. c 31 s 16 are each amended to read as fallows: l Subject ta the limitations in RCW 84.55.010, in each year the state shal1 levy for collection in the following year far the suppart of common schools of the state a tax of three dollars and sixty cents per thQUSand dollars of assessed value upon the assessed valuation of all taxable property within the state adjusted to the state equalized value in accordance with the indicated ratio fixed by the state department of revenue. t2) The state prooertv tax levy rnust bereduced frorn the amount that could atherwise be levied under subsection (1) of this section bv an amount ecrzal to the aross depasits to the "LOwer State Propertv Taxes AccQUnt" established in section 2 flf this act from the previous ev ar• Code RevIJM:seg5 t08/15/2002] I-1630.1/03 (3) The balance of the "Lower State ProAertv Taxes Account" must be transferred each vear ta the qeneral fund to accaunt for the xeductipn af the levv as provided in subsection (2) of this section, ,~4) As used in this section, "the support af common schools" includes the payment of the principal and interest Qn bonds issued for capital constructign projects for the common schools. LIMTTTNG THE TAX BURDEN OF WASHINGTON'S CITIZENS BY LIMTTTNG THE GROV+P.['H QF EACH CQTTNTY' S GENERAL FUND REVENUE, NOT INCLUD2NG NEW V4TER-APPRt7VED REVENL7E, TO INFLATIdN hND POPIILA.TIflN GRUWTH. EXCESS REVENOE ABOVE THIS LIMIT Wt3ULD 8E USED TQ REDUCE PROPERTY TAXES IMPOSED 8Y EACH CQ[JNTY NEW SECTION. Sec. 4. A new section is added ta chapter 36.33 RCW to read as follaws: (1) The growth rate of each county government's general fund revenue, not including new voter-approved revenue, must be limited tQ inflatian and population growth. As provided in subsectian (8) af this sectian, each county must deposit revenues received abave this lirnit in a new account createcl by the county called the "Lower Caunty Praperty Taxes Accaunt." Al1 revenues received during a year which are depositecl in this account must be used to reduce the subsequent year's county property tax levy by the amaunt of gross deposits in the account. (2) For ptxrposes of this section, "general fund revenue" means the aggregate of revenue fram taxes, fees, and othez governmental charges received by the county that are degosited in the countyrs current expense fund. (3) For the gurpgses of this section, "inflatian" means the an.nual percentage change in the implicit price deflator tor the United States as published an or about March 27 following each calendar year by the bureau of economic analysis and reported by the office of financial management. (4) For purposES of this section, "rpopulatian grawth" mean.s the percentage change in the countywide populatian based on the annual countywide population determinations reported by the office of financial management during the prior calendar year and the current calendar year. Code Rev/JM:seg6 [08/15/2002] I-1630.1/03 (5) IE the cost af any county program ox function is shifted from the county's current eapense fund on or after January 1, 2009, ta another source of funding, or if revenue is transferred from the county's eurrent expense fund ta anather fund or account, the limit required by this section shall apply to the aggregate of the county's current expense fund plus the shifted and/or transferred revenue for that year and all subseguent years. (b) If the cast af any county program or function and the revenue to fund the pragram or functian are shifted to the county's current expense fund on or after January 1, 2009, the limit required by this section shall apply to the aggregate Qf the county general fund including the shifted revenue for thar year and a11 subsequent years. (7) For the purposes af this section, "new voter-approved revenue" is defined as the increase in zevenue agproved by the county's voters at an election after the effective date of this act. (8) The limit established in subsection (1) of this section must be implemented as fallows: (a) For the first calendar year beginning after the effective date di this act, the general fund revenue, nQt including new voter- approved revenue, received above the amount received in 2009 adjusted by any arnount necessary to reflect inflation for the 2009 calendar year and population grawth, must be deposited in the "Lawer County Property Taxes Account." (b) Far subsequent years, the general fund revenue, nat including new voter-approved revenue, received above the amount received in the immediately priox calendar year, less any deposits into the "LOwer County PraperCy Taxes ACcount," adjusted by an amount necessary to reflect inflation for the irnmediately prior calendar year and papulation growth, must be deposited in the "Lawer County Property Taxes AGCOUnt." NEW SECTIQN. SeC. S. A new section is added to chapter 36.33 RCW to read as foilows: Any county's property tax levy sha11 be reduced from the amount that could otherwise be levied under RCW 84.52.043 0f this sectian by Code Rev/JM:seg7 [08/16/2002] I-1630.1/03 an amount equal to the previaus year's gross deposits to that county's "Lower County Property Taxes Accaunt" established in section 4 of this act. LIMZTING THE TA]f. BtTRnEN UF WASHTNGTpN'S CITIZENS BY LIMITING THE GROWTH QF EACH CITY'S GENERAL FUND REVENUE: N+DT INCLUDING NEW VOTER- APPRDVED REVENLTE. TU TNF'LATItJN AND PQPULAfiIQN GRpWTH. E7CCES3 REYENUE AHOVE THIS LSMIT WOULD BE USED TO REDUCE PRC1pERTY TAXES IMPOSED BY EACH CITY I'3EW SECTION. SeC. 6. A new section is added to Title 35 RCW ta read as follows: (1) The growth rate of each city government's general fund revanue, not including new voter-appraved revenue, must be 1irnited ta inflation and population growth. As provided in subsectiQn (S) of this section, each city must depasit revenues received above this limit in a new account created by the city called the "Lower City Praperty Taxes Account." A11 revenues received during a year which are deposited in this accaunt must be used to reduce the subsequent year's city property tax levy by the amount af gross deposits in the account. (2) For purposes of this section, "general fund revenue" means the aggregate of revenue fram taxes, fees, and other governmental charges received by the city that are deposi.ted in the city's current expense fund. (3) Far the purposes of this sectian, "inflatian" means the annual percentage change in the implicit price deflator far the United States as published on or about March 27 fallowing each ca2endar year by the bureau of economic analysis and reparted by the offi.ce of financial management. (4) For purpases of this Section, "population growth" means the pezcentage change in the city wide population based on the annual city wide papulation deterrninatians reported by the office af financial management during the prior calendar year and the current calendar year. (5) If the cost of any city pragram or functi.on is shifted fram the city's current expense fund on or after January 1, 2009, ta another source af funding, or if revenue is transferred frorn the Cade Rev!JM:seg$ [08/16/20021 I-1630.1/03 city's current expense fund to another fund ar account, the limit required by this section sha11 apply to the aggregate af the city's current expense fund plus the shifted andlar transferred revenue for that year and a1l subsequent years. (6) Tf the cost of any city program or functian and the revenue to fund the program or function are shifted to the city's current ex.pense fund an or after January 1, 2009, the limit required by this section shall apply'ta the aggregate of the city's current expense fund including the shifted revenue for that year and all subsequent years. {7} For the purpases of this section, "new voter-approved revenue" is defined as the increase in revenue approved by the city's voters at an election after the effective date of this act. The limit established in subsection (1) of this section must be implemented as follows: (a) For the first calendar year beginning after the effective date of this act, the general fund revenue, not including new voter- approved reveriue, received above the arnaunt received in 2009 adjusted by an amount necessary to reflect inflatian far the 2009 calendar year and population growth, must be deposited in Che "Lower City Praperty Taxes Accaunt." (b) For subsequent years, the general fund revenue, not including new vater-approved revenue, received above the amount received in the immediately priar calendar year, less any deposits into the "Lower City Property Taxes Account," adjusted by an amount necessary to reflect inflation fqr the immediately prior calendar year and papulatian growth, rnust be deposited in the "LOwer City Property Taxes Account." NEW SECTION. Sec. 7. A new section is added to Title 35 RCW to read as follows: Any city`s property tax levy must be reduced from the amounC that could otherwise be levied under RCW 84.52.043 of this section by an amount equal to the grass depasits to that city's "Lawer City Praperty Taxes Account" established in section 6 of this act from the previous year. Code Rev/JM:seg9 [08/16/2002] I-1630.1/03 NEW SECTION. SeC. A new Sectian is added tO Tit12 35A RCW to read as fallows: (1) The growth xate of each city government's general fund revenue, not including new vater-approved revenue, must be limited to inflation and populatian growth. As provided in subsectian (8) of this section, each city must deposit revenues received abave this limit in a new accaunt created by the city called the "Lawer City Property Taxes Account." R1I revenues received during a yeax whzch are deposited in this account must be used to reduce the subsequent year's city praperty tax levy by the arnaunt of gross deposits in the account. (2) For purpases of this section, "general fund revenue" means the aggregate of revenue from taxes, fees, and othex governxctental charges received by the city that are deposited in the city's current expens e fund. (3) For the purposes of this sectian, "inflation" means the annual percentage change in the implicit price def7.ator for the United States as pukalished on or about March 27 following eaGh calendar year by the bureau 4f econornic analysis and reported by the office of financial rnanagement. (4) For purposes of this sectzon, "population growth" means the gercentage change in the city wide papulation based on the annual city wide population determinata.ons reported by the office af financial management during the prior calendar year and the current calendar year. {5} If the cost of any city pragram or function is shifted from the city's current expense fund on or after January 1, 2009, to another source of funding, or if revenue zs transferred fram the city's current e7cpense funcl to another fund or account, the limit required by this section sha11 apply tQ the aggregate af the city's current expense fund plus the sha.fted aridtor transferred revenue for that year and a1l subsequent years. (6) If the cost of any city program or function and the revenue to fund the program or function are shifted to the city's current expense fun.d an or after January 1, 2009, the 1imit required by this Code Rev/JM:seg10 [08/16/2002] I-1630.1t03 section shall apply to the aggregate of the city's current expense fund including the shifted revenue for that year and all subsequent years. (7) Far the purposes of this section, "new votex-approved revenue" is defined as the increase in revenue approved by the city's voters at an election after the Effeetive date of this act. (8) The lxmit established in subsection {1} of this section must be implemented as follaws: (a) Far the first calendar year beginning after the effective date of this act, the general fund revenue, not including new voter- approved revenue, received abave the amount received in 2009 adjusted by an amount necessary to reflect inflation for the 2009 calendar year and population growth, must be deposited in the "Lower City Property Taxes Account." (b) For subsequent years, the general fund revenue, not including new voter-appraved revenue, received above the amount received in the immediately prior calendar year, less any deposits into the "Lower City Property Taxes Accaunt," adjusted by an amaunt necessary to reflect intlation far the immediately prior calendar year and papulation growth, must be depasited in the "Lower City Property Taxes Account." NEW SECTION. Sec. 9. A new sECtion is added to Title 35A RCW to read as follows: Any city's property tax levy must be reduced from the amount that could otherwise be levied under RCW 84.52.043 of this sectian by an amount equal to the gross depasits td that city's °Lower City Property Taxes Account" established in section 8 af this act from the previaus year. Sec. 10. RCW 84.52.043 and 2045 c 122 s 3 are each amended to read as follows: within and subject to the limitations imposed by RCW 84.52.050 as amended, the regular ad valorem tax levies upan real and persanal property by the taxing districts hereafter named shall be as follows: (1) Levies of the senzor taxing districts sha11 be as follows: (a) The levy by the state shall not exceed three dollars and sixty Code Rev/JM:seg11 [08/16l2002] I-1630.1/03 cents per thousand dollars of assessed value adjusted to the state equalized value in accordance with the indzcated ratio fixed by the state departrnent of revenue to be used exclusively for the support af the comman schools; (b) the levy by any caunty shall not exceed ane dollar and eighty cents per thousand dollars of assessed value; (c) the levy by any road district sha11 not exceed two dollars and twenty-five cents per thousand dollars of assessed value; and (d) the levy by any city ar tawn sha11 not exceed three dollars and thirty- seven and one-half cents per thousand dollars af assessed value. However any cflunty is hereby authorized to increase its levy from one dollar and eighty cents to a rate not to exceed two dollars and forty-seven and ane-half cents per thousand dollars of assessed value for general county purposes if the total levies far both the county and any road district within the county do not exceed faur dflllars and five cEnts per thousand dollars of assessed value, and no other taxing district has its levy reduced as a result of the increased county l.evy. (2) The aggregate levies of junior taxing districts and senior taxing districts, other than the state, shall not exceed five dollars and ni.nety cents per thousand dollars of assessed valuation. The term "junior taxing districts" includes all taxing districts other than the state, counties, road distri.cts, czties, towns, port districts, and public utility districts. The limitatians pravided in thz.s subsection shall not apply to: (a) Levies at the rates provided by existing law by or far any port or public utility district; (b) excess property tax levies authorized in ArtiCle VII, section 2 0£ the state Constxtution; (c) levies for acquiring eonservation futures as authorized under RCW 84.34.230; (d) levies far emergency medical care or emergency medical services impased under RCW 84,52.069; (e) levies to finance affordable housing for very 1.ow-zncome housing impased under RCW 84.52.105; (f) the portions of levies by metropolitan park districts that are protected under RCW 84.52.120; (g) levies impased by ferry districts under RCW 36.54.130; (h) levies for criminal justice purposes under RCw 84.52.135; and (i) the portions of levies by fire protectiQn districts that are protected under RCW $4.52.125. Code RevJJM:seg12 - [08J16/2002] I-1630.1103 (3) The limitations in subsections (1) and {2} for the levies bv the state counties and cities must be further adiusted as provided in sectionG 2 4, 6 and 8 of this act. Sec. 11. RCW 84.55.010 and 2006 c 184 s 1 are each amended ta read as follows: Except as provided in this chapter, the levy for a taxing district in any year shall be set so that the regular property taxes payable in the follawing year shall not exceed the limit factor multiplied by the amount of regular property taxes lawfully levied for such district plus revenues deposited as Arovided in sections 2(7), 4(7), 6(7} and 8(7) of this act in the highest of the three most recent years in which such taxes were levied for such district plus an additional dollar amaunt calculated by multiplying the increase in assessed value in that district resulting from new construction, increases in assessed value due to constzuctian of electric generation wind turbine facilities classified as personal propexty, improvements to property, and any increase in the assessed value of state-assessed property by the regular property tax levy rate o£ that district for the preceding year. The adjustments -orovided in sections 2, 4, 6, and 8 of this act provide a limitation on praperty tax 1evies which is in addition to the limit factor in this section. CONSTRUCTION CLAUSE NEW SECTION. Sec. 12. The provisions of this aet are to be liberally construed ta effectuate the intent, policies, and purposes of this act. 3EVERA.BILITY czxvsE NEW SECTION. 3ec. 13. If any prnvision af this act or its application to any person ar circum5tance is held invalid, the remainder of the act or the application af the pravision to other pezsons or circumstances is not affected. MISCELLANEOOS coae Rev/JM:seg13 [08i16i2002l 1-1630.1/03 NEW SECTION. Sec. 14, Subheadings used in this act are not part of the law. NEW SECTION. Sec. 15. This act shall be known and cited as the Lower PrQperty Taxes Act of 2009. END Code Rev/JM:seg14 [08i16/2002] I-1630.1/03 STATE OF WASHiNGTQN OFFICE tJF FINANCIAL MANAGEMENT tnsurance Building, P.O. Sox 43713 •Olympia, Washington 98504- 3713 (360) 902- 0555 Fiscal Impact Statement for Initiative 1033 As sent to the Office of the Secretary of State, August 10, 2009 Fiscal Impact thraugh Calendar Year 2015 Initiative 1033 limits annual growth of state, city and county general fund xevenue to the rate of inflation and popularion growth. General fund revenues exceeding this limit must be used to reduce the following year's state, city or county general fund property tax levy. The initiative reduces state general fund revenues that support educarion; social, health and environmental services; and general government activities by an estimated $5.9 billion by 2015. The initiative also reduces general fund revenues that support public safety, infrastructure and general government activiries by an estimated $694 million for counties and $2.1 billion for cities by 2015. General Assumptions • The initiarive is set on a calendar year (CY) basis. • CY 2010 xevenue limit is calculated as follows: CY 2009 General Fund Revenue x(1 + 2009 % Change Population) x(1 + 2009 % Change Inflation) • CY 2010 general fund revenues that exceed the CY 2010 revenue limit will be transfexred into new "Lower PYOperty Tax Accounts" for the state, counties and ciries. The first transfer(s) into the new accounts will occur in CY 2011. • The first property tax levy to be reduced by the uuriarive is the 2011 levy, which is collected in CY 2012. Thus, funds will be transferred from the new "Lowex Property Tax Accounts" into state, county and city general funds in CY 2012 to account for any reduction in 2011 levies. State RevenUe Estimate - Assumptions • The uutiative defines state general fund revenue as the aggregate of revenue from taxes, fees and other governmental charges Yeceived by state government that are deposited into any fund subject to the state's expenditure limit under RCW 43.135.025. For CY 2009 and CY 2010, state general fund revenues are Genexal Fund - State revenue estimates from the June 2009 Washington State Economic and Revenue Forecast Council converted from a fiscal-year basis to a calendar-year basis. • The following state revenue sources, totaling less than $30 inillion annually, have been excluded fxom these estimates: o Sales and income fxom property. o Contributions and gYants. o Grant and loan repayments. o Indirect and priox cost recoveries. o Unclaimed pYOperty. o Charges fox publications and documents. o Interest and investment eaxnings. State general fund revenues for CYs 2011-15 are estimated to grow, on average, by the change in real per capita personal income plus change in inflation plus change in population, adjusted for revenue elasricity. This methodology is consistent with pxior long-term revenue forecasts produced by the Office of Financial Management (OF1V), and results in an average annual growth rate of 4.8 percent. State general fund xevenues are reduced by the amount required to be transferred into the Budget Stabilization Account created under Article 7, Section 12, of the Washington State Constitution. The uutiarive defines inflarion as the annual percentage change in the Implicit Price Deflatox for Personal Consumption for the United States as published on or about March 27 each calendar year by the BuYeau of Economic Analysis and reported by OFM. Inflation estimates for CY 2009 and CY 2011 axe from the June 2009 Washington State Economic and Revenue FoYecast. Inflarion estimates for CYs 2012-15 are from the June 2009 IHS Global Insight foYecast of the Implicit Price Deflator far the United States. The Washington State Economic and Revenue Foxecast Council relies on IHS Global Insight models and data for the U.S. poxtion of the official state economic forecast. The uutiarive defines population growth as the percentage change in the statewide population based on the annual statewide population determinations reported by OFM during the prior calendar year and the cuYrent calendar year. Statewide popularion growth estimates are from OFM's 30-Year Forecast of the State Population. Estimated STATE Cash Receipts: FUND CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 Generai 0 ($676,000,000) ($875,000,000) ($1,125,000,000) ($1,447,000,000) ($1,803,000,000) Fund - State Lower State 0 $676,000,000 $875,000,000 $1,125,000,000 $1,447,000,000 $1,803,000,000 Property Tax Account State Casts to Iznplexnent - Assumptions Less than $50,000 will be incurred by OFM in CY 2009 and CY 2010 to set up, test and verify computer systems, and establish policies and practices to unplement a state general fund revenue limit. Cocinty and City Revenue Estimate - Assutnptions • The uutiative applies to counties, first class cities, second class cities, code ciries, towns and unclassified ciries. 2 To account for possible different patterns in population and revenue gYOwth, counties and cities were analyzed using fouY groupings: 1. Urban County - 7 counties 2. Rural County - 32 counties 3. Ciries in Urban Counties - 109 ciries and towns 4. Cities in Rural Counties -172 cities and towns Urban counries are Clark, King, Kitsap, Pierce, Snohomish, Spokane and Thurston; all others are rural counries. Under RCW 82.14.370, rural counries are defined as a county with a popularion density of less than 100 persons per square mile or a county smallex than 225 square miles as determined and published each year by OFM fox the period July 1 to June 30. County and city general fund revenues are defined as the aggregate of revenue from taxes, fees and other governmental chaYges received by the county or city and deposited into the county current expense fund or city general fund, respectively. County and city revenues are estimated from 2007 financial information contained in the Local Government Financial Reporting System (LGFRS) of the Washington State Auditor's Office. Only funds reported within LGFRS as general fund revenues are assumed to be deposited into the county current expense fund or city geneYal fund, and therefoxe, are included in these estimates. • The following county and city revenue sources have been excluded from these estimates: o Federal and state direct and indirect grants. o State shared taxes or revenues. o Charges for contracted services performed by counries oY ciries. o Charges for enterprise acrivities or charges that axe not governmental in nature. o Inter-fund and inter-department chaxges. o Interest and investment earnings. • County and city general fund revenue growth rates fox CYs 2009-15 are related to the state's revenue growth rate by estimating each grouping's five-year historical rate of revenue growth in proportion to the state's revenue growth rate of 4.8 percent. • Inflation estimates for counties and cities aYe the same as used fox the state. • Population growth is defined as the percentage change in the countywide popularion for counries and the percentage change in citywide population in cities, as xeported annually by OFM. County and city popularion growth is estimated fYOm OFM's 30-Year Foxecast of the State Population, adjusted using OFM's Washington State County Growth Management Population Projecrions: 2000-2030 and each grouping's historic popularion gtowth rates. F,~rimared i JRBAN COUNTY Cash Receipts: FUND CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 General 0 ($55,000,000) ($70,000,000) ($87,000,000) ($111,000,000) ($137,000,000) Fund - Urban Counties Lower 0 $55,000,000 $70,000,000 $87,000,000 $111,000,000 $137,000,000 County Property Tax Accounts Estunated RURAL COUNTY Cash Receipts: FU N D CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 General 0 ($24,000,000) ($35,000,000) ($46,000,000) ($58,000,000) ($72,000,000) Fund - Rural Counties Lower 0 $24,000,000 $35,000,000 $46,000,000 $58,000,000 $72,000,000 County Property Tax Accounts Estunated CITIES IN URBAN COUNTIES Cash Receipts: F U N D CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 General 0 ($176,000,000) ($257,000,000) ($350,000,000) ($463,000,000) ($588,000,000) Fund - Cities in Urban Counties Lower City 0 $176,000,000 $257,000,000 $350,000,000 $463,000,000 $588,000,000 Property Tax Accounts Estimated CITIES IN RURAL COUNTIES Cash Receipts: FUND CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 General 0 ($30,000,000) ($42,000,000) ($55,000,000) ($72,000,000) ($91,000,000) Fund - Cities in Rural Counties Lower City 0 $30,000,000 $42,000,000 $55,000,000 $72,000,000 $91,000,000 Property Tax Accounts County and City Costs to Implement - Assunipticons County and cities willincur indeterminate costs to unplement the iniriative during CY 2009 and CY 2010 to modify computex systems, establish policies and practices, train employees and respond to requests for public information. Costs will vary by jurisdiction and depend, in large part, on the jurisdiction's ability to modify accounting systems to idenrify and tYack xevenues subject to the general fund Yevenue limit. 4 RESOLUTION NO. 4 5 3 4 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, STATING THE CITY COUNCIL'S OPPOSITION TO INITIATIVE 1033 ON THE NOVEMBER 3, 2009, GENERAL ELECTION BALLOT WHEREAS, Initiative 1033 will be presented to the voters of the State of Washington at the general election on November 3, 2009, with the following official Ballot Title: INITIATIVE MEASURE NO. 1033 CONCERNS STATE, COUNTY AND CITY REVENUE. THIS MEASURE WOULD LIMIT GROWTH OF CERTAIN STATE, COUNTY AND CITY REVENUE TO ANNUAL INFLATION AND POPULATION GROWTH, NOT INCLUDING VOTER-APPROVED REVENUE INCREASES. REVENUE COLLECTED ABOVE THE LIMIT WOULD REDUCE PROPERTY TAX LEVIES. SHOULD THIS MEASURE BE ENACTED INTO LAW? YES NO and WHEREAS, this year Washington state and its cities and counties have faced devastating budget deficits that forced the legislators and elected officials to make very tough cuts to basic services, as well as to essential governmental programs, but under Initiative 1033, this year's governmental budgets would be locked in as the baseline for all future budgets, notwithstanding the hard-felt budget cuts and intrusions into limited reserves to fund governmental services; and WHEREAS, under Initiative 1033, general fund revenue for any year would be limited to the amount of revenue received by the state, county or city, as applicable, in the previous year, plus a percentage increase reflecting inflation and population growth; and WHEREAS, the Washington State Office of Financial Management (OFM) has estimated that Initiative 1033 will reduce state general fund revenues that Resolution No. 4534 September 28, 2009 Page 1 of 3 support education; social, health, and environmental services; and general government activities by $5.9 billion by 2015; and WHEREAS, Initiative 1033 would remove money from the state general fund at a time when the state already faces a significant projected revenue shortfall for the 2009 - 2010 biennium; and WHEREAS, OFM has further estimated that Initiative 1033 will reduce general fund revenues that support public safety, infrastructure and general governmental activities by $694 million for counties and $2.1 billion for cities by 2015; and WHEREAS, the effect of the Initiative 1033 revenue limitation is exacerbated during a recession as the Initiative does not provide for recovery in the event of an economic downturn and that Initiative 1033 would provide that none of the cuts made in public services as a result of the current recession could be restored without a public vote, which public votes take time, cost money and allow politics and special interest money to influence the outcome; and WHEREAS, the effect of Initiative 1033 is a significant shift away from representative government, in that it would take away the current power of elected public representatives to make budget decisions, and it would essentially turn the process into budgeting by referendum, not just for the State of Washington, but for all 39 counties and all 281 cities in the state; and WHEREAS, limitations in Initiative 1033 would lower taxes already limited by the current levy lid provisions in Chapter 84.55 RCW; and WHEREAS, as provided in RCW 42.17.130, the City Council of the City of Auburn desires to show its opposition to Initiative 1033. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, HEREBY RESOLVES as follows: Section 1. The City Council, after considering testimony at a duly noticed public hearing, hereby opposes Initiative 1033. Resolution No. 4534 September 28, 2009 Page 2 of 3 Section 2. The City Council hereby urges citizens to vote no on Initiative 1033 on November 3, 2009. Section 3. This Resolution shall be in full force and effect upon passage and signatures hereon. Passed by the City Council this day of , 2009. PETER B. LEWIS, MAYOR ATTEST: Danielle E. Daskam, City Clerk =Heid-,Qty R : orne Resolution No. 4534 September 28, 2009 Page 3 of 3