I-1107 Would Harm Public Priorities
Initiative 1107 would significantly reduce state resources in the current fiscal year and in coming years. It would repeal a portion of the revenue increases enacted earlier this year (along with one tax cut) -- increases that played a pivotal role in preventing painful and economically damaging cuts to essential public services. It would add $250-300 million to the fiscal gap faced by the state in the next three years.
Specifically, I-1107 would:
- Repeal a temporary extension of the state sales tax to bottled water;
- Repeal a permanent extension of the sales tax to purchases of candy and gum;
- Repeal a permanent, $1,000 per employee B&O tax credit for local candy manufacturers;
- End a temporary, $0.02 per 12 ounces excise tax on carbonated beverages; and
- Reinstate a preferential B&O tax rate claimed by manufacturers of certain processed foods.
The revenue increases that would be repealed under I-1107 are projected to generate over $100 million per year over the next three years. These measures were necessary in order to avoid some of the worst cuts that were proposed by the Governor prior to the 2010 legislative session. As a matter of perspective, among the proposed cuts that were averted this year, $100 million was equivalent to:
- In health care: all funding needed to maintain maternity support services for women with at-risk pregnancies plus all of the following services for lower-income adults: non-emergent dental, hospice, physical, occupational, and speech therapy, interpreters, vision, hearing, podiatry, and Medicare Part D copays, or;
- In education: all funding needed to protect early learning opportunities for 1,500 three year-olds from lower income families, provide full-day kindergarten in schools with high poverty rates, and continue financial aid for thousands of lower income college students.
The national recession’s ongoing impact on the state budget has already put these services and many others in jeopardy in the coming biennium. Initiative 1107 would make matters far worse, forcing unacceptably painful cuts to public investments in communities, education, health care, and more.
