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
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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
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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
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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
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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•
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(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.
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(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
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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
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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.
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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
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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
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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