INSIDE

From property rights to green power: some interesting initiatives

By Pat Grub

What would an election in Washington state be without a slew of initiatives to consider and vote on? This election being no different, here’s a look at what is appearing on your mail-in ballot.

Initiative 920: This measure would eliminate the estate tax that Washington imposes on estates worth more than $2 million dollars. The tax is graduated and begins at 10 percent and goes up to 19 percent. It currently brings in nearly $90 million dollars a year which is earmarked for the Education Legacy Trust Account. The account can only be used to reduce class sizes, expand access to higher education and other educational improvement efforts. The tax does not apply to family farms.

In 2004, the amount of tax collected amounted to less than one percent of government revenues. The estate tax has been around in Washington since 1901. In response to changes instituted by the legislature dealing with exemptions, Initiative 402 was filed that called for the elimination of the estate tax above federal estate tax exemptions, meaning Washingtonians would pay no more than what they would pay the federal government. It passed 67 to 33 percent.

The Washington estate tax had been appealed. However, in 2001, Congress repealed the federal estate tax and a court decision meant the state could no longer collect their share of the now non-existent federal tax. In response, the legislature enacted in May 2005 a new estate tax and coupled it with the Education Legacy Trust Account.

Generally, Americans don’t like estate taxes, considering it unfair to tax estates that were created from money that has already been taxed. Polls have shown that nearly 70 percent of Americans consider the estate tax to be the unfairest tax of all.

Initiative 920 Proponents of this initiative argue that estate taxes fall hardest on the inheritors of small businesses which typically don’t have the cash flow to pay for the tax. They say also that it creates a non-competitive environment for the state located, as it is, next to Idaho and Oregon who have none or lower estate taxes, respectively.

Opponents of the initiative believe estate taxes are a fair way to tax the more fortunate amongst us while providing educational benefits to the tune of nearly $90 million a year.

Initiative 933: This measure would require compensation when government regulation damages the use of value of private property and forbids regulations that prohibit existing legal uses of private property and would provide exemptions or payment.

This initiative is probably the most contentious one to come down the pike in quite some time as it pits land rights advocates against environmentalists and a whole whack of others. The state Office of Financial Management estimates it would cost state, cities and counties up to $9 billion in the six years to pay for administration and compensation called for under the initiative.

Briefly, the initiative would require that governments would have to consider and document the impact prior to enacting laws regulating private property. Any law that damaged the use or value of a property would require the agency to pay compensation to the landowner. This obligation would extend backwards in time to laws enacted as far back as of January 1, 1996.

Proponents say it’s only fair to require bureaucrats to consider the effects of their actions on private property owners and requires the government to respect owners’ rights and to follow the constitution which disallows the taking of private property without compensation.
Opponents cite the impact on a recent similar law enacted in Oregon which they say has resulted in claims of nearly $4 billion. It will gut zoning and environmental protections at the expense of the communities for the benefit of developers.

The Washington Policy Institute has this to say about the initiative:
‘… the best way for voters to decide about I-933 is to judge the philosophies behind the initiative and those who support and oppose it. For those who believe that local government planners should have a relatively unencumbered hand in guiding the direction of development, even if that means a few landowners will bear the burden of restrictions, they are likely to vote against I-933 … Those who believe that restrictions that benefit the public should be paid for by the public at large, and that individual landowners should not bear the uneven burden of regulation are likely to vote yes.”

Initiative 937: would require electric utilities serving 25,000 or more customers to meet targets for energy conservation and use of renewable energy resources or pay penalties. Proponents believe the law’s enactment is a moderate evolution in energy policy that would result in less energy use, and cleaner air. Opponents are not so sanguine – they maintain the law would result in drastically higher electric and utility rates for homes and businesses. Any fines will only be paid for by homes and businesses. Further, unlike other states, the law does not consider hydropower to be renewable energy.

It’s pretty clear who’s manning the ramparts here. The proponents are made up of environmental and public health professionals while the opponents are headed by power companies and business groups such as the Association for Washington Business.

There you go – have at it!