How much of a tax cut is too much?
Sunday, June 6, 2004 12:58 AM PDT
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E-mail this articleAt what point does it become unwise to keep cutting taxes?
We don't know, but it looks as if voters will get to answer that question in November when, as appears increasingly likely, Tim Eyman's latest initiative probably will be on the ballot. Initiative 864 calls for reducing property tax revenues by 25 percent statewide. For homeowners, that translates into a 5 to 6 percent reduction in their property tax bill.
If we were to guess right now, we'd say the initiative will pass overwhelmingly. We think that voters will look at the plus to them -- lower property taxes -- without weighing the downside, what the lost revenue will mean in reduced or eliminated services. We hope voters look at both sides before deciding.
In Eyman's camp, the arguments are that taxpayers and businesses need property tax relief and that cutting taxes will force government to be more efficient. Those arguments sound reasonable.
On the other side are government officials and supporters of government programs who say that a property tax cut that big will force major cuts in services.
In Longview, for example, reporter Tony Lystra reports on page 1 today that the city could lose $1.8 million, or $7.2 percent of its $24.7 million annual budget.
The result of these cuts will be higher than they appear, though, because certain fixed costs for cities also are going up. Workers compensation and health-care costs for employees both are going up by large percentages -- 15 percent or more -- each year.
People opposed to the tax cut argue that reducing government revenue will cause major disruption to public programs and either will force some to be eliminated altogether or be cut severely. These arguments, too, sound reasonable.
Cities and counties across the state are planning two budgets for the next fiscal year, one if Eyman's initiative passes and one if it doesn't. Part of that process will be public meetings in which city officials seek public guidance on what services they want cut and what services they want protected.
We urge all citizens be part of that debate so that if Initiative 864 passes, people will know before the vote what the trade-offs will be for lower property taxes.
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