A little known fact about Eyman’s Initiative 1033 is that renters are the big losers under the initiative. The big winner’s will be large property owners and corporations and businesses that own property.
Why renters lose is that they will not see a reduction in sales taxes or other taxes they pay. Last year sales taxes accounted for 57% of state revenue collected. But because renters are not property owners they will not share in the special tax break Eyman is proposing under I-1033.
With Initiative 1033 Eyman is proposing a radical restructuring of Washington State’s tax structure and governance. Initiative 1033 freezes public services by only allowing spending each year to increase above this year’s baseline by a slight adjustment for inflation and population.
Adjusting for inflation only allows you to purchase this year’s services next year at next year’s inflated prices. If a gallon of gasoline for a fire truck or police cruiser costs $2.60 this year and next year costs $3.00 and you adjust spending to pay $3.00, has government grown? No, you’re not providing more services, only keeping up with inflation.
But if the economy grows next year, all tax revenue like from increased sales taxes will go into a special fund Eyman calls the “Lower Property Taxes Account”. There is one set up for the State and each city and county under the initiative. New revenue will not be spent for restoring lost public services as a result of cuts this year or investing in new public infrastructure.
Now everyone pays sales taxes and you’ll still pay the same sales taxes under I-1033. We currently have the highest sales taxes in the country. But rather than any excess money going to fund services cut this year or investing in public infrastructure or jobs or education Eyman says the only priority for using this tax revenue next year that is over this year’s spending level is to provide a special tax break for property owners.
It is not a tax break to specifically help seniors or struggling working families who may rent but not own homes. It is only to benefit property owners. The more property you own the more of a tax break you will get.
Because property taxes must be uniform, the special tax break must dedicate 40% of its money to lowering commercial real estate taxes. That’s right, 40% of any excess tax dollars next year and every year thereafter as defined by Eyman must assist corporations and shopping malls and real estate developers pay their taxes. Eyman says this is more important than funding education, or repairing our roads, or keeping parks and libraries open, or increasing teachers pay, or hiring new police or firemen, or cleaning up Puget Sound, or any of the other public services our state, counties and counties provide.
The US Census Bureau says that only 65% of households in Washington State are owner occupied. That means some 35% of households are renters. They will still pay sales taxes and other taxes but because they don’t own property they will see no refund of their taxes dollars.
Thus renters are double losers. They lose twice because they don’t get any refund of tax dollars since they own no property and they see no use of their tax dollars to provide increased public services they can use.
I-1033 is another poorly thought out and written Eyman initiative. Voters would be wise to vote no and protect their pocketbooks and themselves from this ill advised and unfair special tax break. Initiative 1033 robs taxpayers by diverting tax dollars raised for the public good to provide a tax break that benefits wealthy property owners the most.