Washington Constitution Article VIII - State, County and Municipal Indebtedness
Here is a summary of Article VIII – State, County and Municipal Indebtedness of the Washington State Constitution:
Washington Constitution – Article VIII: State, County and Municipal Indebtedness
Purpose:
This article regulates how much debt the state, counties, cities, and other municipal entities may incur and under what conditions. It aims to protect public finances by limiting debt and ensuring responsible borrowing.
Key Sections and Provisions:
Section 1 – State Debt Limitation
The state may borrow money only for specific purposes like repelling invasion, suppressing insurrection, or defending the state in war.
Other debts must be approved by a three-fifths vote of each house of the legislature and a majority vote of the people.
Total state debt is limited to a percentage of the average of general state revenues over a set number of years (specific limits have been updated via amendments).
Section 1A – Debt for Housing
Allows the state to issue bonds for low-income housing, including for veterans, with public approval.
Section 2 – Municipal Debt Limitation
Counties, cities, towns, and school districts may not incur debt exceeding 1.5% of their taxable property value without voter approval.
With three-fifths voter approval, they may incur debt up to 5%.
Section 3 – Loan of Credit Prohibited
The state cannot loan its credit or become financially involved in private interests.
Exceptions exist for public purposes, such as port districts or economic development (as clarified in later amendments).
Section 4 – Special Assessments
Municipalities may issue bonds backed by special assessments on benefited property (e.g., for local improvements).
Section 5 – State Ownership of Stock Prohibited
The state cannot subscribe to or be an owner of stock in any company, association, or corporation, directly or indirectly.
Section 6 – Public-Private Partnerships (Added Later)
Amendments allow certain public-private partnerships (like port or energy development), within set boundaries.
Section 7 to 9 – Further Clarifications and Exceptions
Includes provisions for economic development loans, guarantees, and revenue bonds under specific conditions.
For example, Section 9 allows the state to issue bonds payable from specific funds (like gas tax revenues for highways), not general state revenues.
Overall Intent:
Prevent excessive government debt.
Require voter oversight for large public debts.
Limit the use of public credit for private gain.
Allow certain exceptions for public benefit, especially with constitutional amendments.
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