New State Initiative Language: Yes, But What will it Cost Us?

Three of the citizen initiatives headed for the ballot in November will feature something never seen before by Washington voters: A kind of warning label about the budgetary implications and impact of the measure. 

This change, formally called a “public investment impact disclosure” was mandated by the Legislature in 2022 to make it more difficult to use the initiative process to repeal laws approved by lawmakers. Some early polling indicated it might move the needle. We’re about to see whether it works. 

The backers of the initiatives argued that it puts a thumb on the scale against a ballot measure. They fought the new requirement in court, but the Supremes turned them away last week. 

Here’s how the process works. The attorney general’s office reviews the initiative to determine whether there’s a budget impact. If so, it crafts a summary according to a fairly strict format in the law. 

For example, voters will see this when they turn their attention this year to Initiative 2109, which would repeal the capital gains tax enacted by the Legislature in 2021. The material in bold is the new statement. (The bolding is ours; it won’t appear on the ballot.)

Initiative Measure No. 2109 concerns taxes. This measure would repeal an excise tax imposed on the sale or exchange of certain long-term capital assets by individuals who have annual capital gains of over $250,000. This measure would decrease funding for K-12 education, higher education, school construction, early learning, and childcare.

Advocates for this change argue that it gives voters a clearer picture of what the initiative would do, rather than just offering a tax cut. In a way, it’s just a short version of the fiscal impact statement that the Office of Financial Management prepares for the voter pamphlet. 

Here’s the opening paragraph of that statement for I-2109: 

If approved by voters, Initiative 2109 will result in an estimated state revenue loss of $2.2 billion over five state fiscal years. This would reduce funding dedicated for K–12 education, higher education, early learning and childcare.

Of course, not everyone reads the voter pamphlet. Polling conducted for opponents of the repeal found that putting the impact language on the ballot itself made folks significantly less likely to support the measure. K-12 education, college, and child care are all popular things, and the last two are bonkers-expensive as anyone with a kid in daycare or a proto-adult in college can tell you. 

But what about the other two initiatives? Here’s the ballot language for Initiative 2117, which would repeal the Climate Commitment Act (CCA):

Initiative Measure No. 2117 concerns carbon tax credit trading. This measure would prohibit state agencies from imposing any type of carbon tax credit trading, and repeal legislation establishing a cap and invest program to reduce greenhouse gas emissions. This measure would decrease funding for investments in transportation, clean air, renewable energy, conservation, and emissions-reduction.

The biggest knock against the CCA is that it’s a backdoor tax on consumers in the form of higher prices for gasoline and other fuels, as well as countless other goods and services that require fuel to produce. The biggest arguments for it are that it provides a giant transfusion of money for transportation, especially forms of transportation that don’t involve driving an automobile, as well as billions for combating climate change in various ways. 

As we’ve noted before, the CCA kinda-sorta serves as a tax on the negative externalities of driving a car—pollution, congestion, etc.—with the money going to things that mitigate those externalities, like transit and infrastructure, to make getting around under your own steam safer and more practical. Many people don’t enjoy paying for the negative externalities of their behavior. That led to the repeal of the state motor vehicle excise tax—which paid for some of the same things—more than two decades ago. 

Here’s the opening paragraph of a more detailed explanation from OFM on what goes away if the CCA gets repealed: 

If approved by voters, Initiative 2117 will reduce state revenue from carbon allowance auctions by $3.8 billion and reduce state expenditures by $1.7 billion between the effective date of the initiative and June 30, 2029. This would reduce or eliminate funding for numerous programs and projects, including for: transportation emissions reduction; transit, pedestrian safety; ferry and other transportation electrification; air quality improvement; renewable and clean energy; grid modernization and building decarbonization; increasing the climate resilience of the state’s waters, forests and other ecosystems; fire prevention and forest health; and restoring and improving salmon habitat.

This brings us to Initiative 2124, which would substantially weaken the long-term care insurance program enacted by the Legislature by allowing people to opt out of the program and the tax that pays for it at any time. Here’s the ballot language:

Initiative Measure No. 2124 concerns state long term care insurance. This measure would provide that employees and self-employed people must elect to keep coverage under RCW50B.04 and could opt-out at any time. It would also repeal a law governing an exemption for employees. This measure would decrease funding for Washington’s public insurance program providing long-term care benefits and services. 

A fourth initiative on the ballot this fall—Initiative 2066—which is the Building Industry Association of Washington’s pushback against the war on natural gas, was deemed not to have a fiscal impact on the state, so it won’t get one of these disclosures.