‘Meaningful’ Property Tax Relief Promised
Lawmakers on Wednesday made sure that property taxpayers will keep a modest tax cut, at least for now, but the partisan fight over more meaty reductions was just warming up.
Democratic Gov. Gary Locke and leaders of the Republican-controlled Legislature pledged to work toward “meaningful” property tax relief. But “meaningful,” a favored word this year, means something different to each of the parties.
Locke and minority Democrats in each House want to put $100 to $200 back into taxpayers’ pockets through a reduction in the state’s share of the property tax, using part of a revenue surplus to finance the proposal. They also want a voter-approved constitutional amendment giving them the power to steer the entire tax break to homeowners, rather than sharing it with business.
Republicans don’t like that idea. Instead they are proposing something far more extensive: a bill to limit tax rate and assessment increases, both at the state and local government levels. They say the measure would save the average homeowner hundreds of dollars a year in the future.
Democrats say it would be a reckless assault on already strapped local government budgets.
In a news conference Wednesday, Locke also cautioned that Republicans’ zeal to slash property taxes could go too far, eating up surplus revenue needed to finance a promised $200 million cut in the state business and occupation tax. Senate budget chief Jim West, R-Spokane, scoffed at the notion, saying “there will be money for the B&O reduction.”
Two developments Wednesday moved the property tax debate forward:
The Senate sent the governor House Bill 1417, to extend a 1995 property tax cut - about $18 a year for the average homeowner - through this year. Locke said he would sign the bill.
He vetoed an earlier version because the reduction would have been permanent. The Legislature got around the problem by requiring a voter referendum this fall on whether to make it permanent, which Locke cannot veto.
In debate prior to the 30-17 vote, Senate Majority Leader Dan McDonald, R-Bellevue, called it a “down payment” toward big tax relief, and Sen. Jim Hargrove, D-Hoquiam, called it “a crumb” for working people. Hargrove and other Democrats said the $65 million a year cost of the measure will eat up surplus revenue needed to grant serious relief to homeowners, a view shared by Locke. The measure passed on a largely party line vote.
The Senate Ways and Means Committee, voting 11-10, approved for possible floor action next week SB5212, a measure to put new limits on state and local property taxes.
It passed after Sen. Shirley Winsley, R-Tacoma, reluctantly sided with her party despite misgivings about the bill’s impact on local government budgets. The proposal, which the GOP House embraces, would limit growth in annual property tax collections to the rate of inflation, now about 3 percent. Currently, collections can grow by 6 percent a year plus the value generated by new construction. The bill would cut in half the amount of new construction that could be included in the calculation, and would allow property owners who suffer dramatic increases in their valuations to pay the higher tax gradually over several years.
xxxx On the Internet: http://www.wa.gov for the state of Washington’s home page. http://www.leg.wa.gov for the state-run Legislative Service Center.