Chronology of amendments to Init 601

Chronology of Initiative 601 Amendments

This chronology lists the statutory amendments to Initiative 601 that have been enacted since the adoption of the initiative in 1993. Not listed are (1) several instances in which the Legislature authorized state agencies to adopt administrative fee increases that exceed the initiative's fiscal growth factor, and (2) statutory interpretations of the initiative that expanded spending capacity without amending the initiative, such as the interpretations in 1995, 1997, and 1999 that allowed a state sales tax credit to be used, without lowering the state expenditure limit, for the baseball and football stadia and for assistance to distressed/rural counties.


1993: Initiative 601 enacted by the voters. Two sections of the initiative take effect.
1995: The remainder of Initiative 601 takes effect.
1997: Assessments imposed by agricultural commodity commissions are exempted from I-601's limitation on
administrative fee increases. (SB 5514)


1998: Referendum 49 amends Initiative 601 to allow a diversion of Motor Vehicle Excise Tax revenues without
lowering the state expenditure limit, authorizes the MVET distributions to be used to reimburse local governments for state mandates, and "reenacted and reaffirmed" Initiative 601.


1999: State Investment Board is given investment authority over the Emergency Reserve Fund. (SB 6063)
Initiative 695 expands I-601 to require voter approval of increased state and local taxes, fees, and charges.
(The initiative was subsequently held unconstitutional by the state Supreme Court.)
2000: $35 million from interest earnings in the Emergency Reserve Fund are transferred annually to the
Transportation Multimodal Account. (SB 6876)
The maximum level of the Emergency Reserve Fund is changed from 5 percent of biennial revenues to 5
percent of annual revenues. (HB 3169)
The State Treasurer is authorized to reconcile deposits to the reserve funds to reconcile actual revenue
levels with previously forecasted levels. (HB 3169)
The state spending limit is adjusted upward for program costs or moneys that are transferred into the state
General Fund (the "two-way street"). (HB 3169)
New local taxes that are credited against state revenues will result in a downward adjustment in the state
expenditure limit. (HB 3169)


The State Expenditure Limit Committee is established (HB 3169).

75 percent of excess revenue from the Emergency Reserve Fund is transferred to the Student Achievement Fund; the remainder flows to the General Fund. (Initiative 728)

The diversion of state lottery proceeds and state property tax revenues to the Student Achievement Fund does not lower the state expenditure limit. (Initiative 728)


2001: Assessments imposed by the forest products commission are exempt from I-601's limitation on
administrative fee increases. (SHB 1835)


2002: The supermajority vote requirement for the Legislature to increase state taxes or to appropriate money from
the Emergency Reserve Fund is suspended for the 2001-03 fiscal biennium. (SB 6819)

The expenditure limit is not lowered to reflect General Fund transfers to the Criminal Justice Treatment Account and the VRDE Account (HB 2338), or certain transfers to the Multimodal Transportation Account
(HB 2969).

1

www.elc.wa.gov


2003: Transfers from the Emergency Reserve Fund to the Multimodal Transportation Account were suspended
during the 2003-05 biennium (SB 5404).


The Education Construction Fund may be used for higher education facilities preservation and maintenance during the 2003-05 biennium (SB 5401).

2005: The following changes result from statutory amendments in SSB 6078:

Effective April 18, 2005, the requirement of a two-thirds vote in both houses of the legislature to raise revenue or pass a revenue neutral tax shift is change to a simple majority vote in both houses for legislation enacted between the effective date and June 30, 2007.

Beginning with the 2007-09 Biennium, the expenditure limit includes the General Fund-State and “related funds. The “related funds” are the Health Services Account, Violence Reduction and Drug Enforcement Account, the Public Safety and Education Account, the Water Quality Account, and the Student Achievement Account.

Beginning with the 2007-09 Biennium, the fiscal growth factor is changed to the average growth in state personal income for the prior ten fiscal years.

Beginning with the 2007-09 Biennium, only General Fund-State revenue is transferred to the Emergency Reserve Account when the revenue in the limited accounts exceeds the expenditure limit. The amount transferred is proportional to the General Fund-State share of all limited account expenditures.

Starting July 1, 2007, the “two way street” option is eliminated. The expenditure limit will be reduced if the cost of a program or money is moved out of General Fund-State or a related fund. The expenditure limit will be increased if both the cost of a program and ongoing revenue for the program is shifted to General FundState or a related fund.

Beginning in Fiscal Year 2007, the ranking minority members of Senate Ways and Means and House Appropriations Committees are added to the State Expenditure Limit Committee. Four votes are needed for action.

2006: ESSB 6896 made the following changes:

• The Fiscal Year 2006 expenditure limit is calculated based on the limit established at the November
2005 Expenditure Limit Committee meeting and adjusted upward to reflect 2006 appropriations to establish budget reserves in the Health Services Account, Student Achievement Fund, and the new Pension Funding Stabilization Account.

• The Legislature’s authority to increase taxes by a simple majority vote ends on June 30, 2006.

2

www.elc.wa.gov