Tuesday, September 11, 2012
Engrossed Senate Joint Resolution 8221’s ballot title reads more like the fine print on a loan.
“This amendment would, starting July 1, 2014, phase-down the debt limit percentage in three steps from nine to eight percent and modify the calculation date, calculation period, and the term general state revenues.”
And when voters get to the fine print of the proposed constitutional amendment it doesn’t get any easier to grasp for those who aren’t policy wonks.
So instead of combing the fine print of ESJR8221, let’s take a look at how state Treasurer James McIntire sums up this proposal to gradually reduce the state’s current capacity to borrow from 9 percent of state revenue to 8 percent in 2034.
“This is a sensible idea that helps protect taxpayers, lowers our constitutional debt limit and improves our ability to make investments during hard economic times ... Over the past 10 years we’ve learned that the current constitutional debt limit doesn’t work very well,” McIntire said in TVW’s video voters’ guide. “... Let me be clear, nothing about this measure changes the dedication of property taxes to schools. Furthermore, local school bonds are already guaranteed by the state, so they get the same credit rating as the state. By protecting Washington’s credit rating with this measure you are also helping protect schools from higher borrowing costs.”
The amendment reduces the borrowing capacity starting in July 2014 when it goes to 8.5 percent, 8.25 percent in 2016 and then 8 percent in 2034. In addition, the amount of new debt would be calculated based on the average of the prior six years of state revenue rather than the prior three years, as is the case now.
According to the Washington Policy Center, an independent think tank, this means ESJR 8221 would reduce the state’s debt capacity by more than $1 billion by the 2043-45 biennium from $7.5 billion to $6.5 billion.
This plan, which was approved by the state Senate 38 to 7 and state House 91 to 7, has broad support from Republicans and Democrats.
The change to the constitution would promote fiscal responsibility and would benefit the public over time.
We urge voters to adopt this measure.