Politics from the Palouse to Puget Sound

Friday, December 21, 2007

"Washington lawmakers bring back 1-percent cap; Whitman County officials hope Legislature revisits issue during upcoming session"

I missed this before as I was in Mexico when it happened.

The restoration of the 1% property tax cap established by I-747 during a special legislative session last month was a huge victory for the Washington State Republican Party and a huge loss for the Democrats. Even though the GOP is crippled with a historic low number of seats in Olympia, the specter of Dino Rossi winning the 2008 gubernatorial race and sweeping in more Republicans in the House and Senate with his coattails sent the Rats running away from their left-wing environmentalist/big labor special interest base and towards the taxpaying citizens of Washington. Thank God we still have a two-party system in this state.

From the November 30 edition of the Moscow-Pullman Daily News:
Whitman County officials aren't surprised the Washington Legislature reinstated a 1-percent cap on annual property tax increases during a one-day special legislative session.

Gov. Chris Gregoire called for Thursday's special session in Olympia after the Washington Supreme Court ruled Initiative 747 and its 1-percent cap unconstitutional earlier this month.

Whitman County Commissioner Greg Partch said the cap makes it difficult for cities and counties to operate. He hopes the Legislature re-examines the cap when it convenes Jan. 14 and takes the interests of small taxing districts into account.

"I am really hoping during the session they really sit down and take a look at the effects," Partch said. "I think they will realize a lot of people are hurting - 1 percent does not cover it. (Olympia) does not live under a 1-percent cap, but they expect us to. I think it is rather interesting that they lift their caps and do what they want and then they expect local government to bear the brunt."

Whitman County and three nonprofit organizations challenged the constitutionality of I-747 in King County Superior Court in January 2005, claiming the voters were misled by the Voters' Pamphlet. The trial court ruled in favor of the challengers and the Supreme Court upheld the ruling, finding voters were deceived by the initiative and that the Voters' Pamphlet was ambiguous as to whether the effect of I-747 would generally lower the property tax levy limit by 1 percent or by 5 percent.

The ruling meant city and county governments and taxing districts could revert to the - percent limit that was in place before voters approved Initiative 747 in 2001.

Gregoire praised lawmakers for approving the cap and a second property tax relief bill, and said the measures would help soothe Washingtonians' worries about soaring tax bills.

"All of those legislators recognized the literal fear that is out there with regard to property taxes," she said.

Lawmakers were in session for less than 12 hours Thursday, rushing through a pair of bills that minority Republicans sometimes jeered. In the end, the Democrats' robust majorities and the politically touchy nature of tax votes ensured both measures would pass.

The main bill approved Thursday reinstates a 1-percent cap on annual property tax increases, which voters endorsed in 2001 under I-747.

Also enacted was a tax deferral program for people making less than the state's median income, presently about $57,000.

Both measures take effect immediately.

A handful of majority Democrats voted against the property tax cap in both chambers, saying a limit below the rate of inflation hurts local governments that are being squeezed to provide services.

The tax cap bill was "based on a flawed law that never should have been approved by the voters in the first place," said Sen. Jeanne Kohl-Welles, D-Seattle.

Minority Republicans in both chambers seemed generally happy to vote for the tax cap, although some of them - along with GOP governor candidate Dino Rossi and anti-tax activist Tim Eyman - said the measure didn't go far enough.

The 1 percent cap under I-747 "has dampened tax increases. It hasn't stopped them," said Sen. Mike Carrel, R-Lakewood.

Thursday's vote in favor of the property tax cap bill was 86-8 in the House, and 39-9 in the Senate. In both cases, Democrats cast the only "no" votes.

The court ruling on I-747, which came just days after voters displayed a penny-pinching mood in the statewide election, prompted Gregoire to call the special session.

The initiative was sponsored by one of the Olympia establishment's biggest antagonists, anti-tax activist Eyman. It capped annual increases of certain property tax collections at 1 percent, unless voters approved a higher levy.

The property tax cap doesn't stop a homeowner's tax bill from increasing more than 1 percent per year.

Each taxing district affected by the cap can get its 1-percent increase. Some taxes, such as new construction and school levies, also aren't subject to the cap.

The state Department of Revenue estimates the average homeowner's property tax bill has climbed 5 percent per year in recent history.

Eyman criticized lawmakers just after the session got under way Thursday morning, saying Democrats weren't going far enough to limit property taxes.

About $100 million in old, unused taxing capacity - which Eyman unsuccessfully tried to wipe out with an earlier initiative - also should be repealed, he said.

"Gregoire and the Democrats don't care about the taxpayers. They're pretending to care about taxpayers," Eyman said.

Rossi and Republican lawmakers echoed that criticism.

Democratic leaders largely dismissed their complaints, but some said the issue could be part of a deeper look at property taxes expected once the Legislature returns in January.

Democrats, however, already appeared split on just what those reforms would look like.

House Speaker Frank Chopp, D-Seattle, said the 1-percent cap would be a closed issue after the special session. But Senate Majority Leader Lisa Brown, D-Spokane, didn't rule out more changes.

"When we come into a new legislative session, all the property tax proposals will be on the table," Brown said.

Thursday's second bill, the tax deferral program for lower-income homeowners, was modeled after an existing plan for seniors and the disabled.

It would allow homeowners making less than the median state income to put off paying as much as half of their yearly property tax bill until their home is sold.

State dollars would replace what local governments normally would get, and the state would get repaid with interest when the property changes hands. There are some conditions for participating in the program.

Some Democrats and activists on the political left have been unhappy with the entire special session, saying it amounts to a politically calculated cave-in that gives a victory to anti-tax forces.

At a committee hearing earlier Thursday, Washington State Council of Fire Fighters spokesman Bud Sizemore said the 1 percent limit hurts local government.

"The business world wouldn't live with this, and I don't think that we should," Sizemore said.


IN AND OUT: Washington state legislators met in an unusual one-day mini-session Thursday to adopt two property tax relief measures. They convened at 8 a.m. and wrapped up less than 12 hours later despite political skirmishing.

747 FLIES AGAIN: Washington lawmakers reauthorized a 1-percent annual growth limit for property taxes. It was a reaction to the state Supreme Court throwing out similar provisions of Initiative 747 on technical grounds. House Bill 2416 was quite popular, passing 86-8 in the House and 39-9 in the Senate.

DEFERRAL TIME: Less popular was a voluntary program to let some property owners defer paying as much as half of their annual tax bill, to be repaid with interest at the time of sale. The Senate vote on Senate Bill 6178 was 27-21; the House vote was 55-39.

JUST A BEGINNING: House and Senate leaders say the broader issue of property tax equity and the needs of local government will be aired at the upcoming regular session.

GOVERNOR'S ROLE: Gov. Chris Gregoire, a Democrat locked in a potentially tough bid for re-election, called the special session and happily signed the bills Thursday night.

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