OLYMPIA – City and county governments would be able to approve larger increases in property taxes without asking voters’ permission, under a bill approved by the House committee that oversees tax policy.
On a party-line vote, the House Finance Committee approved a bill that would create a new formula to replace the 1 percent property tax levy lid approved first by voters and later by the Legislature. Under that law, a local government can only raise the total amount of revenue it raises through property taxes by 1 percent a year unless voters approve a higher increase.
Committee Chairwoman Kristine Lytton, D-Anacortes, said everyone hates property taxes but local governments need more revenue to help them meet increased demand for services as population grows. The bill would create a formula that accounts for inflation and population growth that could allow a city or county to increase the amount it collects through property taxes by as high as 5 percent without sending the increase to the voters.
Democrats on the committee cited requests for help from local officials, including county commissioners, sheriffs and prosecutors. Rep. Cary Condotta, R-East Wenatchee, said they already can raise taxes above the 1 percent limit if they can persuade voters.
“I didn’t hear any compelling testimony from taxpayers” asking for an increase, he said.
Rep. J.T. Wilcox, R-Yelm, said lawmakers would be “breaking faith with voters” by removing the 1 percent limit. Voters approved that “lid” in 2001; when the state Supreme Court overturned it in 2007, Legislature held a special session and reinstituted it.
“That was 10 years ago. Times change,” said Rep. Larry Springer, D-Kirkland, who added he voted for the law in that special session. Since that time, the Legislature has taken away some tax revenue local governments used to get, both from liquor and more recently, marijuana, he said.
Rep. Terry Nealey, R-Dayton, said he agreed local governments need some help on the property tax lid, but allowing an increase as high as 5 percent was too much, too fast. “I could probably support a lower number,” he said.
The committee voted 6-5 to send the bill to the full House. If it passes there, it must also pass the Senate, where an identical bill stalled in the Local Government Committee and never came up for a vote.
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