Spokane’s economy is just starting to peek out of the hole it fell into in 2001. Throughout the last three years of recession, real estate activity has propped up the local economy, as it has in many areas of the state. Now, the Washington state House of Representatives wants to slap a new property tax on homes. You don’t have to be Alan Greenspan to know that increasing taxes is a sure way to collapse economic growth – particularly if you tax its primary support.

The House is proposing to increase the real estate excise tax by 30 percent, which would make it one of the highest in the nation. Technically, it’s a tax against sellers. But everyone knows who pays tax increases – the buyer.

The average home price in Spokane is around $150,000. The tax would mean almost a $1,000 increase in the cost of selling your home. The seller will typically pass this cost along to the buyer by raising the price. Affordable housing is becoming more difficult in Spokane to find.

That can be an overwhelming obstacle for young families still paying off loans for cars and student loans, paying for child care and day-to-day expenses. The fact is, for every 1 percent increase needed for a down payment, the ability to afford a home falls by nearly 50 percent. According to the Washington Center for Real Estate Research at Washington State University, the typical renter has only about two-thirds of the income required to cover the mortgage payments on the typical starter home. The House of Representatives is about to make life even harder for renters who’d like to buy a home.

Increasing the property tax on homes will make homes harder to buy in another way. Sellers will think twice about placing their property on the market knowing that they’ll have to pass the cost of the tax on to buyers. That’s bad news for Spokane where we’ve seen a 35 percent drop in the number of homes on the market since January 2003. The law of supply and demand says as the supply gets smaller the prices will increase. The new tax on homes will just make them even harder to come by, and that isn’t good public policy.

Already middle-wage earners have to drive farther and farther to find homes they can afford. Too many nurses, teachers, firefighters and other middle class families simply can’t afford to live in the communities they serve. Escalating home prices are also making it much harder for those on a fixed income to find retirement homes. When we let taxes drive these people out of our community we lose good neighbors and good friends. We lose the volunteers who make so many community organizations successful. The battle against this new property tax is one we can’t afford to lose.

Pushing seniors and middle-wage earners away from our communities is also hard on business. Shopkeepers, entertainment establishments, grocers and more depend on a thriving client base for their success. If we cannot encourage home ownership in our city, then we will not be able to maintain the entertainment, cultural and other opportunities that a vibrant business community offers.

Spokane’s economy is starting to reawaken. Much of that recovery has been led by real estate. Across Washington, our stirring economy will generate about 7 percent more money for lawmakers to spend on public programs than they had two years ago. Some legislators say that isn’t enough. They want more tax money. The last place they should look for it is in the pockets of folks who’ve work hard and saved their money to put a roof over their heads. Let’s help the Legislature find their property tax idea a new home – the burn barrel.