MARCH 3, 1997

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Local News

Tax referendum goes to voters

Veto of B&O tax rollback likely

tax referendum by Jeff Switzer, senior staff reporter
OLYMPIA--Lawmakers voted to send a broad property tax cut to voters this fall, who will then decide whether to approve the $220 million measure vetoed two weeks ago by Gov. Gary Locke.
   Locke, who vetoed the 4.7 percent property tax cut based on the hazy picture of available revenue for spending, may also veto the business and occupation (B&O) tax rollback passed 91-7 by the House. The Legislature last approved such a rollback in 1996. That proposal would save employers over $200 million over the next two years, will help the economy and create jobs, said Rep. Kathy Lambert (R-45th).
   "In 1993, when the governor, then budget chair for the Democrats, pushed through this tax increase, it was with the promise that it would be repealed when the state economic climate turned around," Lambert said. "Well, now it's four years later, our economy is stronger, and the state has a budget surplus. It's time to make good on that promise, repeal the increase and with it, help create even more jobs for our state."
   Locke says he doesn't oppose the rollback, but instead proposes that it begin July 1998 rather than this year. Without targeted tax relief and in advance of the budget, Locke says he isn't inclined to approve the rollback. His budget is expected early this week, and he said there was no reason to approve the B&O measure this month as opposed to next month.

Voters to decide property tax relief
   While Locke favors targeted property tax relief where it is needed most: on modest homes, giving tax credit for the first $29,000 in value, supporters of the referendum are arguing for a more fair measure.
   In addition to cutting the state property tax by 4.7 percent, they also argue for the cap on future annual increases by state and local governments, limiting them to the 3 percent rate of inflation. Washington state's property tax level is 24th in the nation.
   "We are trying to provide property tax that is meaningful, dependable, and fair to all property owners in Washington," said Lambert. "Unfortunately, to this point, the Governor has been unwilling to join us, instead promoting excluding employers and renters from any property tax relief. So, we are letting the citizens have the chance to make their opinions heard on this critical issue."
   The House approved the referendum 60-38 with all Republicans voting in favor, including Reps. Bill Backlund, Lambert, and Dave Schmidt. Rep. Al O'Brien, D-1st, voted against the measure.