July 8, 2008

Ballot Measures Could Increase State’s Budget Gap

By Randy Hodgins

Chris Mulick from the Tri-City Herald posted this story a couple of days ago about the potential fiscal impact of two initiatives which I wrote about in the blog last week that are likely to appear on the November 2008 ballot.

Tim Eyman’s Initiative 985, which would redirect 15% of the state sales tax on the sale of new and used vehicles to traffic congestion relief projects, could cost the state general fund $290 million over the next three fiscal years according to a preliminary analysis by the Department of Revenue.  Another measure, Initiative 1029, which is backed by the Service Employee’s International Union and calls for increased training for homecare workers, could cost $23 million based on an analysis of a similar measure which was considered but not enacted during the 2008 legislative session.

Combined, these two initiatives would add another $313 million to the general fund ledger for 2009-11 which is already anticipated to have a gap of $2.7 billion according to the most recent projections by the staff to the Senate Ways and Means Committee.  Mulick points out that a $3 billion deficit represents about 9 percent of total general fund spending and does not yet factor in the cost of the working family tax credit which was enacted this year but not yet funded.

Full reports outlining the policy and fiscal impact of all initiatives on the November ballot should be available by this September.

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