TABOR on the Ballot in Washington
"On the west coast we govern by ballot initiative." That's what a chamber exec from Washington State told me during a conversation yesterday. My suspicions were confirmed.
The subject of this particular conversation was Washington Initiative 1033, a taxpayer bill of rights (TABOR) proposal that will be on the state's ballot this November.
TABOR limits growth of a state or municipality's tax revenue and/or expenditure. Under most TABOR laws, growth in tax collection or expenditure is only allowed as a result of inflation and population increase. Colorado was the first state to pass TABOR (1992) and is still the state most closely associated with TABOR. In Colorado, TABOR limits the revenue the state can keep from income, sales or property tax. Limits are based on the previous year's allowed collection plus the combined rates of inflation and population growth. Any revenue collected in excess of the cap must be refunded to taxpayers, usually in the form of a tax refund.
One problem with TABOR is the so-called "ratchet effect" which occurs in years following a recession when the economy recovers but the TABOR revenue caps reflect state tax collection during the downturn. Those caps can hamstring state spending during times of growth for important services and infrastructure improvements.
The push for Initiative 1033 in Washington is being led by three taxpayer advocates through their website - http://www.permanent-offense.org/.
A broad coalition has formed to oppose 1033 - http://no1033.com/ Members of the opposition coalition include groups the SEIU, AARP, and the Greater Seattle Chamber.
For more background and links on TABOR, check out the ACCE Policy Clearinghouse.