Treating the Symptoms

The Daily News ran a story today about a lawsuit pending against Initiative 747, which voters approved in 2001. I-747 was Tim Eyman's tax-cutting followup to the controversial I-695, this time attacking property taxes and capping them to a 1% increase each year. Not surprisingly, this hasn't been an overly pleasing constraint for cash-strapped counties who have depended heavily on property tax revenues to fill in the gaps left by other tax shortfalls (we'll come back to this later). From the article:

"Initiative 747 is destroying our junior tax districts," Commissioner Jerry Finch said in a telephone interview Friday. "Our junior tax districts are slowly but surely using up all of their reserves. Eventually, they will look to the county for operating money. The county doesn't have it."

Sound familiar?

I have to wonder, however, how much of this bemoaning I-747 is a result of having used higher property taxes to compensate for other tax-related problems? In the case of Pullman, the largest employer and land owner, WSU, doesn't pay a penny in property taxes. Combine this with the hundreds of thousands of dollars we lose in sales tax revenue to neighboring communities, and it's clear that the problem isn't with property taxes. In our case, half of every dollar a resident spends is outside the city. That is a serious problem, and upping property taxes is only treating the symptom.

Now, I'm well aware of the fact that Pullman is a somewhat unique case, and not all of the state's "junior tax districts" are in a similar situation. I must ask though, are all of our communities being as responsible with their spending as is reasonable? The article used only the example of libraries, so I'll stick to that.

"A lack of revenue growth has become a heart-breaking fact of life for the county library system. Even though the library saw about a 28 percent increase in participation in youth programs in 2005, it can't offer anything new or different to kids excited about reading, and that "is very unfortunate for the community," Kirkpatrick said.

Wait a minute, Horton can still hear a Who, right? Holden Caulfield is still depressed and sarcastic, isn't he? What exactly has changed so much that kids aren't going to read books if we don't hike property taxes to make them new and exciting? Are we turning children away from the library these days? Maybe I'm just getting cynical, but this seems like a bit of a leap to me.

I'm certainly not advocating eliminating community programs by any stretch of the imagination, but I think it is wise for us to take a page from the play book of private industry and seriously focus on stretching our existing dollars as far as they will go before holding out our hands for more. Maybe the libraries do need a heaping influx of additional funding to fulfill a community need, but I have a very hard time believing that every facet of Washington government is running with such ruthless efficiency that another tax hike is the only answer.

Is the 1% annual cap on property tax increases too low? Perhaps, but the real question in my mind is if increasing them will actually be solving the problem, or merely treating the symptoms of a more troubling issue.