Tax limits alone do not a budget make

By Richard S. Davis

The state Supreme Court will soon hear arguments on a lawsuit challenging the constitutionality of Washington’s voter-approved supermajority requirement for tax increases. The target is Initiative 1053, adopted in 2010 with 64 percent of the vote.

In November, voters will likely reaffirm their commitment to the requirement by endorsing I-1185. They’ve passed similar initiatives four times previously. It’s possible, though not likely, that the court will neuter the ballot box before the election.

These cyclical bouts of review and renewal don’t wear well. Taxpayers who thought they’d settled things wonder why they have to go through the drill again. Interest groups looking for more money work themselves into counterfactual contortions, contending that, but for the restriction, a flood of state revenues would irrigate their parched fields.

A group of legislators and education advocates filed the lawsuit, claiming I-1053 imposes an unconstitutional restriction on the state’s ability to fund public services. Three times previously the court addressed challenges to the supermajority requirement without reaching the threshold question of constitutionality. This need be no different. The Attorney General’s office argues that the case does not present a “justiciable controversy” requiring the court’s intervention in what “are nothing more than premature, hypothetical questions.” A supporting brief filed by the Association of Washington Business calls the supermajority requirement “fundamentally a political mechanism” and calls on the court to respect the separation of powers and not “intervene into the legislative domain.”

Once again, the court has compelling reason to avoid ruling on the constitutional issue. As the AG brief puts it, “Adjudicating a constitutional question because it might lessen political discomfort for some legislators is not the role of the judiciary.”

The higher standard makes it more difficult to raise taxes, but not impossible. After two years, the initiative can be amended, repealed or suspended with a simple majority vote, like any other statute (that’s why voters periodically move to reinstate it). The Legislature suspended the requirement in 2005, reinstated it in 2006, and suspended it again in 2010.

Washington voters tend to elect progressives. But they also choose to bind them by imposing tax limitations and rejecting statewide tax increases. I’ve called it a peculiar preference for “liberals on leashes.”

Making tax increases difficult does not necessarily lead to better budget decisions or promote reform. Most progressive legislators believe the state needs to spend more money. Once in office, they work to get rid of the restraints and raise taxes. They have little interest in making structural reforms to reduce the size and scope of state government to match available revenues. Improvements in budget practice and pension policy in recent years have been modest and hard won.

For six years, state government has confronted a series of budget crises. Even with significant program reductions, spending routinely exceeded income. Lawmakers avoided major restructuring and bridged the gap with short-term fixes, tapping reserves, raiding dedicated accounts, delaying payments and requiring employees to take unpaid leave. The National Conference of State Legislatures reports that Washington and California are the only two states showing negative ending balances for the 2012 fiscal year, though it’s expected to balance this year. Another billion dollar shortfall is expected in the 2013-2015 budget cycle.

Education funding has suffered in the recession. Support for higher education has fallen sharply. Last spring the state Supreme Court found that Washington failed to meet its constitutional obligation to amply fund basic education. It’s anyone’s guess how much a role, if any, the supermajority requirement played in the spending cuts. AWB notes in its brief, “That education cannot be funded without raising taxes is a contested political position.” Spending decisions require just a simple majority vote.

Both gubernatorial candidates believe tax hikes for education are not needed. Jason Mercier of the Washington Policy Center identifies 17 other states that require supermajorities or other extraordinary measures for tax increases. With respect to school funding, the 17 vary widely. Some spend considerably more than Washington on public schools. Others spend less. Funding reflects priorities.

Washingtonians have repeatedly voted to make it tough to raise taxes. They’re likely to again. Tax limitations alone, however, will not produce a sustainable or responsible state budget. Voters who want reform should elect reformers.

Richard S. Davis is president of the Washington Research Council. His email address is rsdavis@simeonpartners.com.