What Is It?
The Ultimate Fiscal Initiative is an election plan that would allow Washington voterrs to choose the state’s budgets in elections every two years. Voters would get to choose their preferred taxing and spending plans from alternatives proposed by the legislature and other political entities or factions.
What Are the Problems?
There are two major problems this plan would address:
1. Legislative Gridlock. Political parties are too partisan. Each is so entrenched in its own political, economic and social dogma that sensible compromise is too often impossible — and, as a result, nothing important gets done except for unfair and onerous tax burdens with underfunded schools and other vital public needs.
2. Conflicting Initiatives. On almost every election ballot voters are presented with various initiatives for either (1) limiting taxes or (2) increasing spending. These are always separate, stand-alone measures. They are one-sided because they only affect spending or taxing, not both. Therefore, there is a natural conflict; that is, voting for increased spending while also prohibiting or limiting taxes. There is no requirement that these dueling initiatives be compared or reconciled.
Conflicting Initiative Problem
During the last two or more decades voters have been confronted with a steady stream of fiscal initiatives, mostly instigated or inspired by Tim Eyman or other tax malcontents, limiting certain taxes.
At the same time or in the next election initiatives for new social programs or increased school funding are voted in without considering the cost or what revenue increases would be necessary to fund new or expanded programs. A steady stream of disconnected, contradictory fiscal initiatives — one for lowering taxes and another mandating spending — have led voters to approve initiatives to expand service while also approving cuts in taxes needed to fund services they approved in the other initiative.
Unfortunately, because of myopic voter tendencies, conflicting initiatives often are adopted. It’s popular to oppose taxes on the one hand while at the same time favoring government spending on health, education and other benefits or services. It is the age old political/fiscal dilemma we are all painfully aware of, well-summarized by author and financial journalist Philip Coggan in his book Paper Promises1:
…as nations, we borrow money because the taxes we are willing to pay rarely match the public spending we wish to see. 1:
Of course, on the state level borrowing is not available on the scale or in the way that it is for nations. States in the US generally have to balance their budgets. Thus: the dilemma.
It’s easy, though naïve, to say to the legislature, “Keep my taxes low, but don’t cut any programs or services I like — just go figure out how to pay for them.” Voters have to do this in the blind hope that the state can fill gaps through elusive efficiencies and belt tightening, or the magical cutting “waste.”
When voters are presented with only the option of cutting taxes (and who doesn’t want to cut taxes?) without being presented — at the same time — the question of how that tax cut might force cuts in essential state services or programs, these measures often pass, putting the state in a fiscal bind
The other side of fiscal initiatives is just as bad. Voters approve — sometimes overwhelmingly — measures calling for increased spending for services (school class sizes, teacher salaries, training, etc.) without any information or consideration about how much this will cost or how it will be paid for
This grotesque, piecemeal form of direct democracy is senseless. It leads to mismanagement of the state’s budget because this way voters only get to consider a narrow, one-sided slice of the total fiscal pie.
So if voters are to be asked — as they have repeatedly in election after election — to manage isolated parts of the budget why not give them the whole picture and the whole bundle and allow them to consider and decide comprehensively both taxes and spending, i.e., both revenue and programs.
Take some examples from our ordinary business or family lives: No sound business manager could successfully run a company without being able to manage both income and expenses. If a business could only decide parts of one side of its budget it would surely fail. A family too has to consider both its income and expenses in making rational decisions to buy, let’s say, a refrigerator or a new car. Most people carefully weigh their needs and the advantages of a purchase against their income and abilities to handle loan payments. No one can make intelligent financial decisions based solely on isolated parts of the cost side or of the income side of their finances.
So when voters are repeatedly presented with one-sided initiatives pertaining to parts of the state’s budget — either on the taxing or spending side — it is no wonder inconsistent results come about. Voters are far more likely to approve reasonable and appropriate tax measures if they can see exactly how they are to be taxed and what they are getting for their money. Similarly, they are less likely to approve expensive programs if they know what they will cost and if they are required to authorize revenue to cover that cost.
Every year it seems the state is faced with another severe budget dilemma, worse than ever before. It is ensnared in the net of fiscal initiatives or mandates that have put large parts of the budget off-limits.
There are many political commentators who are not enamored by the initiative process, including political scientists. Voters have on occasion irrationally adopted or rejected measures against their own self-interest. Initiatives often spark massive media campaigns. But, if voters are required to consider comprehensive two-sided specific budget proposals – proposals that must meet specific standards for content, clarity of costs and benefits and balance – irrational self-inflicted initiative injury would be unlikely.
Legislative Deadlock
The other problem that has bedeviled the legislative process is the partisan divide that has led to deadlock ever since the landmark decision of the Washington Supreme Court in McCleary v. State3. The court held in that case that the State was failing in its primary duty to fund education under article IX, section 1 of the Washington Constitution.
Five years have passed and a solution continues to evade our partisan divided legislature. As noted in the Seattle Times Education Lab article by Claudia Rowe of August 7, 2016:
Washington spends more than $10 billion every year on its public schools. Nevertheless, the Supreme Court found in 2012 that our state has long failed to cover the actual cost of K-12 education, and demanded an improvement.
The writer charitably characterized the legislature’s performance as “sluggish” in spite of a $100,000-per-day fine levied by the court. The fine has totaled $36,000,000 but has not induced the legislature fulfill its constitutional duty.
If the legislature is unable to find a solution after five years it is time for us to find it for them.
This dilemma is likely a manifestation of a fundamental problem with the system of representative democracy. The classic theory of representative democracy does not match actual practice. That is: most voters as a general rule — not all, but most — do not base their votes on candidates’ issue positions. They often don’t know what the positions of various candidates are, don’t follow politics or don’t care, maybe being more interested in sports or business. Politicians, in turn, are quite adept at evading issues; giving high sounding, vague, generic and ambiguous explanations when questioned. Nor, by the way, can they be counted on to do what they said they would do if elected. Voters, by-and-large, do not or cannot carefully consider a candidate’s stand on policies, programs or economic or social issues. This often results in people voting for politicians they would not have supported if they had followed the candidates’ issue positions and leads to unpopular policies. Voter decisions are often dominated by identity politics and the cult of personality, the so-called “character issues.”
The idea that voters vote on candidates’ issue positions is called the “folk theory” of democracy — and it is a myth according to political scientists Christopher H. Achen and Larry Bartels in their recent disillusioning book Democracy for Realists4. The folk theory of democracy, as taught in most civics classes, is that voters compare a list of their beliefs with the those of candidates and vote accordingly. Bartels and Achen have soundly exploded that theory based on detailed statistical analysis. They point out that voters are often divided on the basis of race, class, religion, locality and party loyalty. This is called “identity politics”
The divide between urban and rural voters is particularly stark and hard to explain. The difference in political leanings seems to have little to do with differences in the benefits and burdens of political, economic, social and fiscal issues affecting those respective populations. We often see voters clearly voting against their own self interest. All of this tends to produce either unpopular results or gridlock or both. Election and legislative results often do not reflect the actual views of voters if they were surveyed or required to consider specific political decisions. In fact, again, according to Bartels and Achen, there is evidence that voters tend to modify or accommodate their own views with those of their favored candidates. So it is not always politicians following the will of the voters; it is the voters following the will of the politicians.
In view of this phenomenon we would have a better functioning and more responsive government if issues — particular programs and government services and specific tax plans — were presented to voters instead of candidate personalities and perceived character flaws. They should be forced to — or confined to — make the policy choices, separated from personality, character or amorphous leadership issues.
The Two-Sided Initiative Solution
In the past the Governor and factions in the legislature or others suggested that voters approve essentially a balanced, two-sided initiative, that is taxing tied to spending. The proposal that has been made is that a sales tax increase be presented with a corresponding express requirement that it be applied to pay for and avoid cuts in education and other programs. This one-time, partial two-sided appeal to voter approval is an acknowledgment of the good sense, practicality and, indeed, the necessity of presenting both sides — spending and taxing — in every fiscal initiative. We should just adopt this approach and make it uniform in all elections. It is the final logical step forward by submitting budget initiatives to the people every two years.
So let’s face the reality and the inevitability of conflicting fiscal initiatives, legislative gridlock and unrepresentative results of representative democracy and open up the whole process to the voters. Allow — and really require — the people of the state of Washington to consider and decide a comprehensive fiscal policy package, one that includes the entire budget, both taxing and spending, in all initiatives affecting the budget.
I proposed this idea some 15 years ago and others have since then too. This is the only way for us to get out of this annual budget quandary and end the partisan squabbling, gridlock and impractical compromises. We can do this sensibly by enacting a constitutional amendment that would require that competing budgets be presented to the voters every two years. That would also outlaw all other fiscal initiatives and would let the people choose what taxing and spending alternatives they prefer.
This also eliminates any voter apprehension about setting off runaway taxation by adopting a progressive income tax. Income tax initiatives have failed because wary voters suspect that once the income tax door is opened the legislature would be freed to go on a taxing spree, imposigng a flood of higher taxes. A recent letter from a reader published by the Seattle Times aptly expressed typical voter cynicism and mistrust in these words: “… when the bureaucracy is in place the sky is the limit.” But under the Ultimate Fiscal Initiative proposal that could not happen. Runaway taxes could not happen because there is a limit: the voters themselves. They would always have the last say every two years. The legislature could only propose not impose.
The Rules and Mechanism
My 2001 editorial proposed that just two budget choices be put on the ballot along with a “none-of-the-above” choice and if none-of-the above won the legislature would reconvene and propose two modified budgets for a second election. That is just one way to do it. Another way would be to simply limit the initiative to two plans, a Democratic and Republican plan and let voters choose between them.
What I now suggest is that more than two budgets could be put on the ballot, for example one by the Governor, two or more by the legislature and another by initiative Petition, all meeting specific criteria. My present formulation allows a citizen initiative proposal to be included on the ballot through the regular petition process. So the Tim Eyman people, for example, could propose their plan if they got enough signatures. All of the proposed budgets that meet the requirements and standards for a proposed budget initiative would be put on the ballot every two years. Voters would then rank their choices in order of preference and the budget that came out on top under ranked-choice voting rules and procedures would be adopted.
If voters are to have their say, as they have in election after election in the past, on isolated, one-sided parts of the budget (a senseless system we are now stuck with) a far better and more democratic and reasonable thing to do is to give them a range of complete budget choices. Voters should be freed from choosing in isolation separate taxing or spending resolutions.
I have drafted a complete constitutional amendment in appropriate legislative format, that would accomplish this. Besides the provisions already described, the draft includes the following menu of fiscal issues that voters would choose from every two year:
1. a provision authorizing any form, system or rate of taxation approved by the voters, including a capital gains tax or a graduated net income tax;
2. a provisions for required initiative content including cost and revenue projections and comparisons;
3. a ranked-choice voting method for choosing among 3 or more proposed budget initiatives;
4. a balanced budget requirement (within the requirements of the state’s existing constitutional debt ceiling);
5. a required “rainy day” or emergency fund;
6. clauses for addressing and adjusting for unexpected shortfalls in revenue and unexpected cost increases in programs and state services. So, for example, the governor could make certain limited adjustments in taxing and spending but could not veto the adopted budget. Any unadjusted shortfall or surplus would be carried forward to the next budget and dealt with so as to again balance the budget.
7. provisions for resolving union and other employment contract conflicts;
8. provisions for required voter pamphlet content, statistical analysis and other information of each budget proposal, such as tax rates, class sizes, salaries of teachers and other government workers — complete costs and benefits information With this information voters would be able to see exactly how much each tax plan would cost them and specifically and as accurately as possible what they would be getting for their money.
9. All other fiscal initiatives for any taxing or spending would be prohibited.
I composed this draft in November, 2011, and sent a copy with a cover letter (example letter included as a separate post) to State Representatives Jinkiins, Lytton, Chopp, Darneille and Hunter and Senators Chase, Brown, Murray, Zarelli and Hewitt.https://cronktalk.org/washington-states-fiscal-dilemma-letters/ I heard nothing from any of these dedicated public servants who always assure us they are listening to us and are responsive to our ideas. No response from anyone. Not so much as “Thank you, but there is no support for this now.”
A copy of the draft of my complete proposed constitutional amendment will be provided upon request of anyone.
I did as much research as possible in drawing up this constitutional amendment. I tried to think of everything, but obviously this is a less than perfect first draft and many of the details probably deserve amendment, but I offer it as a start to implementing this plan. As I concluded in the PI opinion piece:
Such a plan, if carefully drafted, would be far better than the haphazard system plaguing us now. It would let the Legislature do its job — while allowing the people to see the entire picture, expenditures and revenue, and have the final say every two years on how they are taxed and how their money is spent.
Jerome R. Cronk
Shoreline, Washington May 27,2017
1 Public Affairs, 2012 at p. 1
2 269 P.3d 227, 173 Wash.2d 477 (January, 2012)
3 Princeton University Press, 2016