This election will have very clear consequences

Perhaps the strangest thing about the Aug. 17 legislative primaries is this: A lot of mature, sane and responsible people want to go to Olympia next January. Not exactly first responders rushing to the sound of gunfire or heat of flames, they are, nonetheless, heading for trouble most of us would avoid.

Olympia is burning — burning through cash — and the legislative session promises more fireworks than a small town 4th of July. Despite what we’re told, many elections are relatively inconsequential. Normally there are a few interesting ballot initiatives, maybe one or two high-profile statewide campaigns, and possibly a legislative race of local interest. When the economy is strong, tax revenues flow at a healthy pace, and state spending is under control, there’s generally little to get excited about. That’s the way most of us like it.

This election is different. The outcome will dictate the conditions for the 2011 legislative session, which will, in turn, shape the state economy for the rest of the decade. Pundits call it a wave election, driven by national and philosophical trends that overshadow narrow local influences.

There are many ways to characterize the November showdown. A referendum on the progressive agenda of public employee unions and left-leaning activists? A test of the mainstream appeal of the fiscally conservative Tea Party movement?

That polarity doesn’t quite capture it. As is usual here, the battle for the middle is more fluid. But the legislative lineup poses sharp contrasts. One set of candidates will bring higher taxes, increased public spending and regulatory expansion. The other group pledges to contain spending, block new taxes, and promote private sector investment and job creation.

While the candidate races are important, they won’t be determinative. On the ballot are several initiatives striking at the core of the current debate on state budget transformation, a debate the governor joined with public hearings this summer.

If voters approve Initiatives 1107 and 1053 and reject Initiative 1098, they tell Olympia they want the budget shortfall fixed without raising taxes.

A lot of people opposed tax hikes in the last session, yet at the eleventh hour, legislators adopted a smorgasbord of taxes, including new taxes on soda, bottled water and candy. I-1107 would repeal part of the package.

I-1053 reinstates the supermajority requirement for tax increases imposed three times previously by ballot initiative. While legislators can amend it by a simple majority vote after two years, I-1053 would effectively shut the door on new taxes in the 2011 legislative session.

Rejecting I-1098, a new $2 billion state income tax coupled with a small amount of property and business tax relief, would punctuate the message. The “tax the rich” impulse behind I-1098 shouldn’t fool anyone who has cast a glance toward the capital in recent years. If the initiative passes and survives the inevitable court challenge, two things are certain: Entrepreneurs, jobs and investment will leave the state. And, soon, we’ll all be considered taxably rich.

In addition to clarifying public sentiment on new taxes, the November ballot provides an opportunity for voters to begin shrinking government by ending state government monopolies in liquor and workers’ compensation insurance.

I-1100 and I-1105 would privatize liquor sales. The initiatives take different approaches, which might lead to some ballot confusion. I-1100 is the more pure privatization proposal, backed by Costco and many business groups. It takes the state totally out of the business and allows retailers to buy directly from producers. I-1105 preserves a role for liquor distributors — middlemen — and lets the state disallow volume price discounts.

Washington is one of only four states that deny employers a private option for buying workers’ compensation insurance. I-1082 will permit competition, giving business a choice between self-insurance, the state insurance fund and the private insurance marketplace. After years of legislative obstruction and steadily increasing insurance premiums, many of the state’s leading business groups have endorsed the initiative.

Rarely does a ballot provide such clear litmus tests — red or blue, markets or monopolies, higher taxes or controlled spending. Politics as usual isn’t working. The national wave swells with frustration over deficits, debt, entitlements and taxes. The same tide washes over our state.

Richard S. Davis, president of the Washington Research Council, writes on public policy, economics and politics. His e-mail address is richardsdavis@gmail.com.