If you happened to watch or attend the last Lacey City Council meeting, you would have heard Mayor Graeme Sackrison give a report on several issues. Some of these issues were quickly covered, such as Cynthia Pratt’s letter to the council rejecting the justification to “revitalize” the Lacey Gateway project, the 2010 Lacey city budget, or the impacts of citizen initiative I-1033. Graeme would not discuss the specific impacts, but he did say if you would like, please give the city a call and they’ll tell you what I-1033 means to Lacey.
Initiative 1033 is a Tim Eyeman initiative that says its intentions are to limit the growth and expenditures of state, county, and city governments. It does this by essentially taking the 2009 budget revenues and tying their increase to population growth and inflation. The desired outcome is that property taxes would drop when general fund revenues exceed this revenue limit, proportionally. So for example if the City of Lacey made a killing on local sales tax then property taxes for their residents would drop once the I-1033 formula revenue limit was hit. The idea is that simply most forms of government could not expand unless their voters approve it or that the size of government would be tied to consistent revenue performance.
I-1033 is going to pass. While some Western Washington County’s will not approve it, the statewide initiative will pass as it has traction with many voters who are landowner’s and have had enough of property tax volatility and perceived government waste. Especially as our population (voters) ages and the recent reduction of services is felt, the perception among many is that taxes are not being effectively spent on priorities. As fire fighters, we’ve seen this especially among these voters during the last election who have fixed budgets and are simply working at avoiding being taxed out of their homes; they can’t afford new taxes in any form.
Mayor Sackrison didn’t discuss I-1033 because the city of Lacey if going to take it in the shorts. The Mayor did offer that sales taxes are still down by an excess of 10% over last year during the meeting, but when you consider that the amount of growth the city has planned and the expanding needs of some of their programs, it paints a strong picture or question is how will they pay for growth of city government at past levels if the revenue values are limited? They won’t. Even Graeme warned that they are working at not laying people off in 2010.
Enter Lacey Fire District #3 into the equation that remains a separate entity from the city (god willing, forever) and happens to be exempt from I-1033. What? That’s a right, I-1033 exempt “junior taxing districts” such as county fire departments, medic one, and the Timberland Library. If the City of Lacey were to offer the voters a regional fire authority or especially annexation, it would nearly immediately resolve (at least for the short term) a lot of their budget issues. Further, it would help guarantee fire and life safety for the city residents for a long time to come because Lacey Fire District #3 would not be effected by I-1033 and is already limited to 1% annual growth plus new construction (with a limit there too). The city could immediately pocket funds that they would not have to pay fire protection for.
Fire district annexation is an immediate solution for the city’s budget woes without directly having to go to the voters for more taxes. Its also a strong reason that once all of the legal challenges are ironed out against I-1033 that you will see all sorts of municipalities unload their fire departments into direct voter managed entities such as fire districts and regional fire authority. I also would suggest that it’s a matter of time when you will see other entities such as police and other emergency management agencies work for legislative changes to become “junior taxing districts” where by their fate and function would not be tied to large scale bureaucracies that city governments have become.
As a parting thought when it comes to city budgets, lets also consider closed business tax revenue, decreases in assessed value of residential property, and the tax losses of all the foreclosed homes. Its not just about dropping sales tax; we’re on the cusp of some real serious budget issues in the city and the county.