Property tax back on table

OLYMPIA – It’s a staple of Tim Eyman’s political broadsides that many Democratic lawmakers are eager to stamp out his ballot measures. In protest, he once showed up to a hearing shackled, his mouth duct-taped, and dressed in a Guantanamo Bay style orange jumpsuit.

Olympia this week will feature an even more unusual spectacle: a Democratic governor and Democratic legislative leaders not just supporting an Eyman measure, but embracing it and making it their own.

On Thursday, state lawmakers will meet in a rare special session to revive Eyman’s Initiative 747, a 2001 ballot measure that capped taxing districts’ total property tax increases at 1 percent a year unless voters OK more. Critics argue that it hamstrings fire districts and other services, holding their budgets below the rate of inflation.

Earlier this month, the state Supreme Court declared the measure unconstitutional. Lawmakers, prodded by Republicans and Gov. Chris Gregoire, intend to restore it.

“It’s an election year coming. They looked at how voters felt about taxes and read the election year tea leaves,” said Sen. Mark Schoesler, R-Ritzville.

Some Democrats question the wisdom of rushing to re-impose the limit.

“To just codify what Tim Eyman designed, which most of us thought was a dumb idea,” said Rep. Alex Wood, D-Spokane, his voice trailing off in frustration. It doesn’t make sense to handcuff fire districts, cemetery districts and other local governments’ budgets, he said, at a time when gas prices and other costs are rapidly rising.

“Why don’t we do a 1 1/2 percent cap?” he suggests. “Anything but what he designed, so it’s our plan instead of saying Tim Eyman’s running the state.”

Wood vividly remembers another Eyman measure, I-695, his “$30 Car Tabs” measure, that was also thrown out by the high court. Democratic House members were meeting to figure out whether to cap the licensing fees, perhaps at $150 or $200 a year. Instead, then-Gov. Gary Locke famously announced that $30 license tabs were here to stay.

Locke “cut the feet out from under us,” Wood said.

Still, he concedes that the measure – already blessed by Gregoire, Senate Majority Leader Lisa Brown and House Speaker Frank Chopp – will pass Thursday.

“Pretty obviously, they’ve made the decision,” Wood said.

On Monday at the state Capitol, Gregoire defended her decision to call the special session and restore the tax limit. She said she knows that some Democrats have heartburn over it.

“To those that feel that way, I would say to them, come with me to town hall meetings across the state,” she said. “You can feel the nervousness of people … that they’re literally going to (be) run out of their homes.”

After five years, governments have grown used to working under the cap, she said. And voters strongly supported it.

“I know it’s not without controversy,” she said. “Not much that we do here is without controversy.”

Rep. Timm Ormsby, D-Spokane, said that for years Democrats have been trying to provide property tax relief for people who need it.

“The special session is not the result of pressure to be politically expedient,” Ormsby said. “The Supreme Court ruling is what it is, but there was no doubt that the Legislature would reinstate the will of the people. We have to be responsive.”

Initiative 747 won’t be the only thing on the agenda Thursday. Senate Democrats, led by Brown, are also pushing for a partial property tax deferral for households below the median income: $57,000 a year. It’s patterned after an existing program for senior citizens and people with disabilities who have incomes of $40,000 or less.

The back taxes would be due – plus interest, a variable rate that Gregoire says is currently 7 percent – when the home is sold.

Gregoire said she expects about 7,500 people to take advantage of the deferral the first year. The state would make up the roughly $3.5 million in deferred local taxes, she said.

Brown has also said she hopes to see other legislation early next year to make taxes fairer for low- and moderate-income people.

Rep. Don Barlow, D-Spokane, says the current I-747 debate is a “no-win situation.” Government needs enough money to provide services, he said, but property taxes “are continuing to go up and up and up.”

He said he’ll vote to restore the cap.

“I think it’s something that we need to do,” he said, “and probably the sooner the better.”