City governments on the Eastside are eyeing warily another move by professional initiative promoter Tim Eyman that aims to limit increases in property tax revenue.

The Suburban Cities Association, of which the cities of Issaquah and Sammamish are members, has announced that it will opposed Eyman’s initiative, know as I-1033.

The Lower Property Taxes Initiative 1033 says that the growth rate of state, county, and city general fund revenue cannot exceed inflation and population growth.

Any revenue collected above this limit would reduce the amount of property taxes paid by residents.

Should such a law come into effect, Sammamish would be impacted more than most cities in the state, as without a large retail sector it relies so heavily on property taxes for its revenue.

Councilors and city managers have for many years spoken of the importance of diversifying the city’s revenue stream, to avoid the potential catastrophe that would result from the successful passage of initiatives just like this one.

Opponents, and there are many, say that the I-1033 will essentially lock in the dramatic cuts of the recent state budget as an enforced benchmark for future spending.

Education, business and health care advocates have mobilized following the development of the initiative, with some saying it could create a “permanent recession.”

I-1033 was based on an initiative passed by voters in Colorado, which was later overturned.

The initiative would make it illegal for state and local governments to spend more than what they spent the year before on services like schools, parks, police, fire, or hospitals.

A month ago Eyman and co-sponsors Jack Fagan and Mike Fagan submitted a petition to Olympia with 315,444 signatures in support of the initiative, more than the 241,153 he needed to ensure I-1033 would be placed on the November ballot to be voted on by Washingtonians.

According to Eyman, I-1033 would bring back the fiscal discipline of Initiative 601, which was passed by voters in 1993 and which similarly limited government revenues.

He said that I-601 was a great success for the state, and only faltered when the legislature began making amendments, leading to the deficits of 2003 and 2009.

But according to City of Sammamish Financial Services Director Lyman Howard, I-1033 could put limits on local government that would make it difficult for them to provide the basic minimum of services that residents now expected.

Howard gave a presentation to the Sammamish City Council last month on just what I-1033 would do to the city’s revenue picture.

Although astutely aware of the repercussions that the passage of I-1033 could have for the city, Howard was careful not to indicate a preference for or against the initiative.

“I don’t want to get out ahead of the council,” he said. “They make the policy.”

In the past, the city council has invited presentations from groups for and against initiatives like Transit Now, and school bonds, ahead of taking an official position opposing or supporting them.

At the moment, there is little movement among councillors to take their own official position on I-1033, however according to Howard they are not likely to form a policy on the initiative more than three months out from the November ballot.

“It’s still early. I wouldn’t imagine that they would move to make a formal policy on it until late September or October,” he said.

Reading between the lines it is clear to see city accountants in places like Sammamish see Eyman’s latest initiative as a direct threat to their ability to keep service provision on pace with consistent growth.

Howard did say that one of the troubling elements of I-1033 was that allowable increases in revenue were linked not to the Consumer Price Index (CPI), but by the Implicit Price Deflator (IPD), a measurement which includes national statistics such as gross domestic product.

Historically, Howard said, the IPD had been a lower figure than the CPI.

In recent years it has even been a negative figure, meaning that government’s operating budgets would decrease.

“Given we are in a growth mode, this could prove difficult for us,” Howard said. “Given the growth element, we’re building services as we grow. This will have less impact on cities that are already built out.”

Howard said that the expansion of the Town Center will require a further increase in the cities operating budget, to provide services like police, and that such an expansion would be difficult to fund should I-1033 become law.

Mayor of Sammamish Don Gerend said that previous Eyman initiatives 695 and 747 had both hurt the city, and questioned why there was a need for another revenue restriction when property tax caps were already in place.

Gerend was concerned that the initiative was poorly worded, and that it froze budgets during a period of economic downturn.

“Often the best time to do city projects is during a recession,” he said. “We have seen that in Sammamish, with the good prices we have received for project bids. And it is also a good way to stimulate the economy when it needs it the most.”

Gerend said that he hadn’t heard of a single city official in favor of the initiative.

“It’s not that we want to spend money hand over fist,” he said. “But we want to have some flexibility.”

Traditionally measures like this one are popular with homeowners, particularly in cities like Sammamish, where high value properties result in large property tax numbers.

However according to Sammamish homeowner Mike Collins, I-1033 was not generating a lot of interest locally.

Collins, who is a member of the Sammamish Homeowners Association, said that he, personally, did not believe Eyman’s proposal would benefit the homeowners it claimed to aid.

“Taxes are required to fund the services demanded by citizens,” he said. “Eyman’s work appears to just move dollars from one pile to another, causing way too much unproductive work for little benefit.”

Collins added that the Sammamish Homeowners Association does not have a formal policy on the initiative.

Permanent Defense, a project of the Northwest Progressive Institute, was founded in February of 2002 in response to Eyman’s Permanent Offense, the committee and website he formed to promote a number of initiatives all geared toward reducing government’s ability to generate revenue.

“For over a decade, our common wealth has been threatened and attacked by right wing initiatives designed to paralyze our communities and wreck government,” states the Permanent Defense web site. “Tim Eyman has tried to make this approach sound reasonable by including a provision that exempts inflation and population growth from the limit, but the reality is that the whole concept of contrived, artificial limits on revenue is completely unreasonable to begin with. In practice such limits have been utterly unworkable. Other states, like Colorado, have imposed them and seen their quality of life suffer drastically as a result.”

Opponents of Eyman’s initiative also point to the dire state of the financial affairs in California as being partly the result of citizen initiatives that have demanded expensive programs but made it difficult for governments to raise the money necessary to provide them.