State budget office reports on fiscal impact of 3 ballot measures. Washington Research Council analyzes I-1433 (minimum wage)

The Spokesman-Review gives a brief overview of the nine statewide measures on the November ballot, reminding us to share some information on some of them. Here’s the S-R summary:

[Voters will] have a chance to approve or reject new laws that would impose stricter gun safety or raise the minimum wage on initiatives that gathered enough signatures to go directly to the ballot. They can impose a new tax on carbon emissions or ask Congress for an amendment to the U.S. Constitution that would limit campaign contributions, two ideas first presented to the Legislature but ignored by lawmakers. They can tweak the system that will redraw congressional boundaries in 2011. 

And they can offer their advice to the Legislature on two changes to tax law earlier this year.

The Office of Financial Management, as required by law, analyzes each measure and prepares a fiscal impact statement. OFM finds three of them have a quantifiable fiscal effect. Here are the summary estimates. The links take you to the full impact statement, not to the initiative.

Initiative 1433:

Initiative 1433 would increase state revenues, and state and local government expenditures, during the next six fiscal years. State revenues would increase due to employers making Unemployment Insurance Trust Fund tax payments on higher wages. State General Fund expenditures would decrease in the first four fiscal years, but increase in the fifth and sixth fiscal years. Expenditures from all other funds would increase in each fiscal year. Increases exceed any decreases in State General Fund spending resulting from the initiative. Local school district expenditures would increase. Other local government expenditure impacts cannot be estimated.

Initiative 732:

During the first six fiscal years, state General Fund revenue would decrease by a net amount of $797.2 million. This results from implementing a new carbon tax, reducing the state retail sales tax rate by 1 percentage point and reducing certain manufacturing business and occupation taxes. The Working Families Tax Exemption Program would be funded. Sales tax revenue for the state Performance Audits of Government Account would decrease by $8.9 million. Local tax revenue would increase by $156.1 million. State expenditures would increase by $37.4 million.  

Initiative 1464:

During the first six fiscal years, the estimated net new revenues to the state General Fund from the repeal of the nonresident retail sales tax exemption is $173.2 million. The estimated net impact of transfers and expenditures from the state General Fund is $171.5 million. Of this amount, $165.0 million represents transfers from the state General Fund to the Campaign Financing and Enforcement Fund for the Democracy Credit Program. Revenue for the Performance Audits of Government Account would increase by $279,000. Local tax revenue would increase by $67.3 million.  

We’ll doubtless hear much more about all of these after Labor Day. 

For a detailed assessment of I-1433, we recommend this special report released yesterday by the Washington Research Council. The WRC concludes:

If voters approve I-1433, the state will continue to be among the highest minimum wage states (though not the highest, given recent changes in other states). 

…employer groups have called I-1433 a “blunt instrument.” Indeed, it includes no exemptions, it doesn’t differentiate between firm sizes or locations, it doesn’t allow for a training wage for young people or those new to the labor market, there is no tip credit, it doesn’t preempt cities from enacting ever higher local minimum wages, and it doesn’t take into account the fact that the economy in much of the state may not be able to bear such a high minimum wage (nor does it give the state an opportunity to suspend the increases should the economy falter). By contrast, the minimum wage and paid sick leave mandates that some Washington cities have enacted have included some exemptions or based the requirements on business size.

Further, by mandating paid sick leave, the initiative requires employers to increase compensation over and above the minimum wage increase. By mandating this one specific benefit, the initiative ignores the possibility that employees might prefer higher wages or other types of benefits (like retirement, flexibility, or scholarships) to paid sick leave. The paid sick leave mandate could result in the cancellation of some of those nonmandated benefits.

Read the whole thing. And, though it’s not a statewide measure, Seattle’s proposed scheduling law also gets a thorough review by the WRC here. Lately, it seems that the route to a statewide ballot initiative is paved by Seattle’s public policies. So it’s worth watching.