Taxpayer Initiatives Threaten Revenues.

Recent initiatives in the states of California and Washington could reduce important sources of stare and local government revenues. Last November, a grassroots taxpayer campaign in the State of Washington known as "Initiative 695" helped eliminate that state's motor vehicle excise tax and replace it with a flat $30 fee. The success of that initiative has encouraged some California lawmakers to attempt to eliminate California's vehicle license fee. The fee taxes all motor vehicles at 2 percent of the vehicle's current market value. The revenue from the fee, which is collected by the state, is distributed to local governments based on population. California local governments receive $4 billion annually from the fee; it comprises about...