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Hidden $108 million property tax increase
Do you think it was wise of you to jump all over the governor and the Legislature after they passed the I-747 replacement bill in the special session? I asked Tim Eyman. Isnt the bill a replica of your initiative?
No, he said. They drafted the bill themselves and had to address other things because of the courts ruling they had to deal with. We were consistent and insistent and specific from day one that a one percent cap on property taxes needs to be a one percent cap and their bill has a $108 million property tax increase buried in it.
They put a loophole in the bill, Eyman said, that allows local governments to exceed the one percent without a vote of the people and that clearly is not what the voter wants. The voters dont want loopholes and for governments to ignore the cap. The one percent cap in the Legislatures bill is in name only.
If this is confusing, lets go back to square one. Eymans I-747 passed in 2001, calling for a one percent cap on annual property tax collections per taxing district, other than schools, which at the time were capped at 2 percent under I-722, which was being challenged in the state Supreme Court and ultimately declared unconstitutional. Districts could go higher than one percent but only after running it by the people first.
Because the language of I-747 was based on the subsequently dead I-722, the state Supreme Court said last month, voters were misled into thinking they were only reducing the cap from 2 percent to 1 percent when the pre I-722 limit was 6 percent.
Voiding of I-747 by the court not only put all taxing districts back to where they could increase their property tax collections up to 6 percent, but they could use the taxing capacity they hadnt used under I-747, which would be 5 percent per year.
Eyman wanted to ban the use of the banked money local governments had squirreled away but the Democrats refused. Republicans introduced bills to do it, but in vain.
Also missing in the replacement bill is a fix to a problem called to everyones attention some months back by King County Assessor Scott Noble, a Democrat. Prior to action taken by the Democratic-controlled Legislature at the governors request, temporary tax increases passed by taxing districts were just that and expired after the term they were passed for, such as the recent multi-year levies. Now, its the reverse. They are permanent unless the law says otherwise.
The Legislature is promising property tax reform in the 2008 session, So whats Tim going to do? Hes mailing his 25,000 supporters a message on scarlet paper to be copied and mailed to all the Democrats who voted to block the clean one percent bill (thats all except Rep. Tim Sheldon of Potlatch) plus the three Supreme Court justices who killed I-747. It says the sender doesnt want property tax increases above 1 percent without a vote of the people or activist judges and wont vote for any of them.
Were calling it The Scarlet Letter, he said. Youll probably have to explain what that means. If you havent read Hawthornes The Scarlet Letter, about the scarlet A worn as a mark of shame for committing adultery, you know now what Eyman means.
Eyman is buoyed by the fact that I-960 passed which means everything the lawmakers do in their property tax reform will be under public scrutiny. They cant do this stuff under the radar screen any more, he said.
As for the property tax deferral bill the governor got passed last month, I doubt many people will take advantage of it. Not if their heirs have anything to say about it.
Adele Ferguson can be reached at P.O. Box 69, Hansville, WA 98340.