July 26, 1999
Reform measure sought to limit tax increases to inflation
A new study by the Washington Institute Foundation of the state's 39 counties and 21 major cities shows that most are not following the provisions of a major tax limitation law passed by voters two years ago.
In 1997, by a nearly two-to-one margin, Washington voters passed Referendum 47, a measure to cut the state property tax and to limit local property tax increases to the rate of inflation, which is just .85% in 1999.
The study, titled "Property Tax Relief in Washington: Referendum 47's Second Year," was authored by Vice President for Research Paul Guppy. It takes a comprehensive look at how well the tax limitation promised by Referendum 47 is actually working. The results of this recent study show that:
- Twenty-five counties (64%) did not implement the inflation limit. Elected officials in these counties instead used the law's escape clause and identified a "substantial need" to raise taxes higher. This represents a 13% increase in the number of counties exceeding the inflation limit compared to last year.
- Twelve of the cities surveyed (57%) increased their property tax collections above the rate of inflation. Seven of these, including Seattle, increased collections by the maximum-allowed 6% over the previous year.
- Fourteen counties and nine cities, however, did implement the full Referendum 47 reform. They held their increases in property tax collections to the inflation rate of .85%. Eleven of these counties and six of the cities held taxes to the inflation limit in 1998 and 1999, thus providing two consecutive years of maximum tax restraint for their citizens.
- At the state level Referendum 47 provided $297.9 million in state property tax relief so far and will save taxpayers a further $2.3 billion over the next six years.