The state has released its findings on the fiscal impacts of six initiatives and a referendum facing voters this fall, and, in short, some measures could cost taxpayers more than a half-billion dollars in lost revenue while others - such as the income tax initiative - could offset losses with new income. It depends on which, if any, pass and whose educated guess pans out. For example, approval of liquor-privatizing I-1105 would mean a $130 million revenue gain, the campaign claimed just yesterday. But the state Office of Financial Management says passage actually means we'll lose five times that. The difference is due in part to whether liquor taxes will be raised sky high to compensate for lost state revenue. The rundown:
I-1053 (Tim Eyman's measure to require two-thirds majority in legislature to pass tax increases): Would have no direct fiscal impact on state and local revenues, costs, expenditures or indebtedness.
I-1100 liquor privatization (wide-open retail/wholesale sales): Total state revenues decrease an estimated $76 million-$85 million and total local revenues decrease an estimated $180 million-$192 million, both over five fiscal years. One-time net state revenue gain of $27.8 million is estimated from sale of the state liquor distribution center. One-time state costs are estimated at $38.6 million. Ongoing state costs for tax collection are estimated at $426,000.
I-1105 liquor privatization (retains wholesale distribution system): Total state revenues decrease an estimated $486 million-$520 million and total local revenues decrease an estimated $205 million-$210 million, both over five fiscal years. One-time net state revenue gain of $27.8 million is estimated from sale of the state liquor distribution center. One-time state costs are estimated at $39.2 million.
I-1107(repeals new candy, pop tax): Over five fiscal years, the initiative reduces State General Fund revenues by an estimated $352 million and state performance audit revenue by an estimated $359,000. Revenue for local jurisdictions authorized to impose a sales tax is reduced by $83 million over five fiscal years. Taxpayer noncompliance and confusion could result in additional state and local government revenue decreases up to $8.7 million and $1.8 million, respectively, in fiscal year 2011. Net state costs to administer the tax revisions are $98,200 over five fiscal years.
I-1082 (privatizes state industrial insurance): Industrial insurance premium paid into state Trust Funds is estimated to decrease $1.1 billion-$1.43 billion by calendar year 2014 as employers shift to private insurers. State claim costs correspondingly decrease as claims shift from the state to private insurers. State revenue is estimated to increase $61 million-$75 million over five fiscal years. Costs are estimated to increase up to $202 million for the state and $47.25 million for local governments over five fiscal years. Assuming no legislative action to conform statutes to the initiative, industrial insurance premium paid into state Trust Funds and associated costs may increase.
I-1098 (state income tax): Beginning calendar year 2012, the income tax and tax relief are estimated to generate a net increase in state revenue of $11.16 billion over five calendar years to be used exclusively for education and health services. The 20 percent state property tax levy reduction will allow some local property tax districts to levy an increased amount; this revenue impact is expected to be minimal. State implementation costs are estimated at $39.3 million over five fiscal years; one-time computer programming costs are estimated at $50,000 for the state and each university and local government with employees subject to the income tax.
Referendum 52 (capital expenditures): Referendum 52 authorizes the issuance of $505 million in state general obligation bonds to fund capital improvements for energy efficiency in buildings owned by public school districts and public higher education institutions. Twenty-nine-year debt service costs are estimated to total $937 million, for an average annual state cost of $32.3 million. Other state costs are estimated to be $2.2 million annually through fiscal year 2015. The sales tax on bottled water is estimated to increase State General Fund revenues an annual average of $39.8 million and increase local government revenues an annual average of $14.9 million.
Ashley Bach, spokesperson for Yes On I-1100, was quick to respond to the state's figures. OFM, he says, relied on information it received from the state Liquor Control Board - "hardly a disinterested party." Asking OFM to assess I-1100, adds Bach, "is a little like asking the Mariners management in April what the club's chance are of making the playoffs. They will be confident in their answer but they may not have looked at the whole picture."
Similarly, Charla Neuman, representing I-1105, calls the state's estimates a "bogus scare tactic."