FEBRUARY 10, 1997
Relief and local control are goals of Republican property tax plan
by Rep. Kathy Lambert, 45th District
Republican proposals in the state Legislature would not only reduce taxes immediately but, more important, would also provide long-term protection for all Washington property taxpayers by establishing limits on the growth of tax rates, as well as giving local voters more control over future property tax increases.
If each element of the Republican property tax relief package is approved and signed by the Governor, the owner of a $110,000 home would save $2,000 over the next 10 years. In fact, a person who purchased such a home this year would save $8,000 over the life of a 20-year mortgage.
Our package offers both immediate and long-term relief to the overburdened property taxpayers of Washington, as well as greater control over future increases. Twice this session, the Legislature has adopted legislation giving immediate relief by continuing the 4.7 percent reduction in the state property tax levy that was enacted in 1995. Property owners benefited from that reduction last year. But unless that reduction is continued, the tax bills property owners receive in February will automatically increase.
First, both the House and Senate adopted a bill making the state property tax reduction permanent. Unfortunately, new Gov. Gary Locke vetoed the measure claiming he will support only another temporary one-year cut.
Undaunted, the Legislature acted again. This time, we approved continuing the 4.7 percent reduction for this year to prevent an increase in the property tax bills going out in February. But we also included a referendum clause allowing the voters of Washington to decide whether to make the state property tax cut permanent.
But this is just the first step in the Republican property tax relief effort. It is vital and had to be addressed quickly, because the counties are preparing to send out this year's property tax statements within a couple of weeks.
However, we are now moving ahead to address the more important issue--long-term relief to protect property owners from the steady increase in property tax rates. Our plan is simple: Set a stricter limit on state and local property tax levies, limiting the annual increases in tax rates that can be imposed, unless approved by a vote of the people.
Currently, there is a 106 percent limit on all non-voter-approved levies. This allows each taxing district to increase its levy by six percent each year without seeking voter approval. When the value of new construction is added, the average annual increase has historically been about eight percent.
While that levy limit made sense due to the double-digit inflation at the time it was enacted nearly 20 years ago, it no longer provides any protection for taxpayers. For a long time now, government entities have been routinely imposing property tax levy increases that are two or three times greater than the rate of inflation. In fact, at the current eight percent average rate of increase, property taxes have been nearly doubling every eight years. Our plan would stop such excessive growth in property taxes by limiting all levy increases to the rate of inflation or six percent, whichever is less, unless approved by a vote of the people.
Given today's inflation rate of about three percent, our proposed levy limit would cut property tax rate increases in half. Combined savings from these reforms would be $47 next year on a $110,000 home, growing each year to a savings of about $176 in five years. The total reduction in state property tax revenues would be more than $1 billion over the next five years.
Finally, we are also considering reforms that protect homeowners from huge, unexpected increases in their assessments. Such a limit on individual assessments would spread the effects of sudden valuation increases over several years, providing property taxpayers even greater relief.