Washington residents may have thought they clamped a tight lid on property taxes when they approved Referendum 47 in November.
In reality, the lid is loose.
“It’s going to be an absolute nightmare when tax bills go out and people say, ‘I voted for tax reform. What happened?”’ predicted Sharon Stern of the Spokane County Assessor’s Office.
Most cities, towns and other taxing districts in the county will increase their 1998 property tax collections by about as much as they did each year before the referendum became law. An escape clause written into the referendum makes that possible; sponsors thought the fear of bad publicity would make politicians reluctant to use it.
Under the law that voters approved by a 2-1 margin, governments can automatically increase their property tax revenue from one year to the next by no more than the inflation rate. This year, that’s 1.9 percent.
The escape clause allows governments to go as high as 6 percent if they cite a “substantial need.”
No such justification is required of governments representing fewer than 10,000 residents.
Every fire and cemetery district in Spokane County ended 1997 by voting to take the maximum 6 percent increase this year.
The same thing happened in seven of the county’s 10 cities and towns.
The Spokane City Council voted unanimously to collect about 4 percent more than last year - about twice the rate of inflation.
However, most Spokane homeowners will pay lower property taxes this year than last because the city paid off some voter approved debt and will stop collecting special taxes used to make the payments.
The county library district voted to take 3 percent more than last year.
All of which makes Spokane County commissioners and the Millwood Town Council look like masters of restraint. They stopped at the 1.9 percent limit.
“We don’t need any more money. We’ve got plenty of money,” said Mayor Jeanne Batson of Millwood, where a paper mill shoulders much of the tax burden.
Officials for other local governments said they had no choice but to increase taxes more than the inflation rate.
Spokane City Manager Bill Pupo said the city’s “substantial need” is to pay 26 police officers.
The recruits were added in 1993 with the help of a federal grant. This year, the grant expires, and the city alone must pay the officers’ wages.
Valley Fire District and Fire District 9, which serves northern Spokane County, rely on voter-approved special levies for huge portions of their budgets.
The rates for the 1998 levies were set long before the November election, based on the assumption that money from regular property taxes would continue to increase at a pace faster than inflation.
Before they put 1999 levies on the ballot, commissioners for both districts will have to make a tough choice, said District 9 Chief Bob Anderson.
“Obviously we either have to increase the special levy (request) or exceed the Referendum 47 cap,” Anderson said. “It’s not like we have some other pot of money that we can go to.”
The situation is similar at the county library district, said Director Mike Wirt.
Voters in 1996 approved a $7.6 million bond to build new libraries and upgrade computers.
But without taking the maximum tax increase this year, the district wouldn’t have enough money to staff the libraries and operate the computers, Wirt said.
As Stern fears, voters may be disappointed in the referendum’s results.
But at the very least, the referendum makes it difficult for governments to collect more money without drawing notice, said Dick Davis of the Washington Research Council in Seattle.
“What was an automatic (tax) increase is being debated and discussed,” said Davis. “The voters are paying closer attention, the media is paying closer attention.”
, DataTimes MEMO: This sidebar appeared with the story: REFERENDUM 47 The measure placed additional restrictions on annual increases in property tax collections. But that doesn’t include increases attributed to new construction.