OFM: Corporate initiatives would cost Washington State hundreds of millions

The Office of Financial Management has come out with its fiscal analysis of the six initiatives on our November ballots, and the picture isn't pretty.

Four of the five corporate initiatives would collectively make future deficits hundreds of millions of dollars larger than would be the case otherwise. The fifth, Tim Eyman's I-1053, would bring California-style gridlock back to the Legislature, preventing lawmakers from democratically deciding how to balance the budget.

Here's a breakdown by measure. All emphasis is mine.

Initiative 1100 (Costco's liquor privatization initiative):

Fiscal impact cannot be precisely estimated because the private market will determine spirits bottle cost and markup. Using a range of assumptions, total state revenues decrease an estimated $76 million–$85 million and total local revenues decrease an estimated $180 million–$192 million, both over five fiscal years. One-time net state revenue gain of $27.8 million is estimated from sale of the state liquor distribution center. One-time state costs are estimated at $38.6 million. Ongoing state costs for tax collection are estimated at $426,000.

Initiative 1105 (Odom and Young's liquor privatization initiative):

Fiscal impact cannot be precisely estimated because the private market will determine spirits bottle cost and markup. Using a range of assumptions, total state revenues decrease an estimated $486 million–$520 million and total local revenues decrease an estimated $205 million–$210 million, both over five fiscal years. One-time net state revenue gain of $27.8 million is estimated from sale of the state liquor distribution center. One-time state costs are estimated at $39.2 million.

Initiative 1107 (soda makers' initiative to repeal new revenue):

Over five fiscal years, the initiative reduces State General Fund revenues by an estimated $352 million and state performance audit revenue by an estimated $359,000. Revenue for local jurisdictions authorized to impose a sales tax is reduced by $83 million over five fiscal years. Taxpayer noncompliance and confusion could result in additional state and local government revenue decreases up to $8.7 million and $1.8 million, respectively, in fiscal year 2011. Net state costs to administer the tax revisions are $98,200 over five fiscal years.

Initiative 1082 (BIAW's initiative to destroy our publicly adminstered industrial insurance system, which protects workers who get injured on the job):

Industrial insurance premium paid into state Trust Funds is estimated to decrease $1.1 billion–$1.43 billion by calendar year 2014 as employers shift to private insurers. State claim costs correspondingly decrease as claims shift from the state to private insurers. State revenue is estimated to increase $61 million–$75 million over five fiscal years. Costs are estimated to increase up to $202 million for the state and $47.25 million for local governments over five fiscal years. Assuming no legislative action to conform statutes to the initiative, industrial insurance premium paid into state Trust Funds and associated costs may increase.

Only passage of Initiative 1098 would result in a net gain for our common wealth. If I-1098 passes and is enacted, the state treasury will be strengthened by $11.16 billion over the next five years. That's the estimated total amount of money to be appropriated towards public schools and health coverage, after property taxes and business and occupation taxes have been offset.

The main takeaway from OFM's fiscal analysis of these measures is this: Passage of all five corporate initiatives would create a massive, irreversible drain on our common wealth, beginning next year. The Legislature would have no option but to eliminate public services, which have already been eviscerated.

Passage of I-1098 would stave off some cuts to education and health coverage, but it's no panacea. We'll still have a bigger budget deficit in January 2011 if I-1082, I-1107, I-1100, and I-1105 become law.

If we don't defeat these corporate initiatives, our communities will suffer. Our quality of life will deteriorate drastically. No joke.

It's pretty sad that our state's future is being threatened like this, one year after Washington overwhelmingly rejected Initiative 1033. The corporate lobbyists responsible for this year's rash of me-first measures evidently weren't paying attention when they drew up their schemes, because voters were very clear in saying, No way! We don't to become the next Colorado!

We've got a major fight on our hands, and a lot of work to do if we're to save our common wealth from destruction. Again.

POSTSCRIPT: Schmudget has additional reaction to OFM's analysis.