By Warren Cornwall
Herald Writer
The apparent landslide victory of property tax-limiting Initiative 747 may have property owners counting their prospective savings.
It also has local governments taking a second look at spending plans.
From the big, such as Snohomish County, to the small, such as Sultan, government officials spent Wednesday contemplating how to make up for millions of dollars in taxes that vanished with the passage of I-747.
"There’s a clear-cut message that’s been sent that the state needs to take a closer look at how dollars are raised and spent, and that’s also true for local governments," said Snohomish County Executive Bob Drewel, a I-747 opponent.
For initiative sponsor Tim Eyman, it was welcome news to hear government officials talk of re-examining their operations.
"Most of them are saying, ‘Well, we’re hunkering down and we’ll make do with 1 percent.’ And what I’m saying is that’s progress," said the Mukilteo resident.
The initiative would limit governments to a 1 percent annual increase in property tax collections unless voters approve a larger increase. On Wednesday, the measure was leading with 59 percent approval statewide, and 60 percent approval in Snohomish County. Final voting results aren’t available yet.
Many governments already had alternate budgets prepared in case I-747 passed. But some local officials still warned the measure will take a toll on government services.
Snohomish County will make up the $2.3 million in lowered 2002 tax revenues by tapping reserves, said Roger Neumaier, budget advisor in Drewel’s administration.
But county officials are already working to figure out which road projects to cut from long-range plans, he said. The county estimates the initiative could cut $60 million in expected revenue for the county’s road fund between 2002 and 2007. That’s partly because the county has consistently raised tax collections for that fund by 6 percent in past years.
Sultan’s budget is much smaller, but the initiative may result in more immediate changes.
The city was already wrestling with a fall-off in revenue from building permits. With the new initiative, and tax dollars lost following a previous Eyman tax-cutting measure, I-695, the city now will probably see its 2002 general fund budget shrink by $370,000 from this year, down to $1.42 million, said city clerk and treasurer Laura Koenig.
To make up for the expected drop, she said the city won’t fill several open or soon-to-be-open positions, including two police officers and a planner.
"Basically, we’re just not hiring people," she said.
Gov. Gary Locke warned that the hundreds of millions of dollars state and local governments stand to lose under I-747 will compound the state’s current financial problems.
The wide margin of victory contradicted recent polling and indicates Eyman has tapped into a vein of voter sentiment, said Stuart Elway, an independent pollster whose numbers showed support for I-747 slipping in recent weeks.
The appeal stems not just from the idea of limiting taxes but from giving voters more control over their taxes, Elway said.
"It’s not that people won’t pay taxes. They want more direct influence over what they pay and what it’s for," Elway said. "That’s a large part of what has been called the tax revolt."
Eyman has promised an initiative a year from his group, Permanent Offense, and said the next installment would be forthcoming in a few weeks.
"It’s probably going to be about taxes," he said.
You can call Herald Writer Warren Cornwall at 425-339-3463 or send e-mail to cornwall@heraldnet.com.
The Associated Press contributed to this report.
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