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GOP pressures Legislature to
approve I-747 property tax lid
Attempt to
close sizeable loophole fails
Score one for the voters
of Washington and one for tax-and-spend Democrats at the conclusion of a
one-day special legislative session in Olympia today. Lawmakers convened
to uphold property tax protections thrown out by the state Supreme
Court, and adopted language to reinstate a 1 percent cap on regular
property tax increases. However, majority lawmakers rejected a
Republican proposal to close a substantial loophole that could result in
double-digit property tax increases for some homeowners.
The stated purpose of the special session was to reinstate the 1 percent
limit approved by voters through Initiative 747 and subsequently struck
down in a 5-4 Supreme Court decision. Republican lawmakers noted that in
order to have a true 1 percent limit, the Legislature also needed to
close a loophole that allows taxing district to tap millions in unused
taxing authority from as far back as 1986. This additional tax authority
is known as “banked capacity.” Voters demanded that banked capacity be
eliminated when they approved Initiative 722, but the court struck down
that measure as well.
House Bill 2416 to reinstate the provision of Initiative 747 passed the
House 86-8. Twentieth District
Reps. Gary Alexander
and Richard DeBolt
supported the bill, but were disappointed that the Legislature left open
the banked-capacity loophole.
“One percent means one percent. The voters were well informed and
decisive about their wishes,” said House Republican Leader Richard
DeBolt. “Without eliminating the banked capacity, we haven’t truly
upheld the voters demand for a one percent limit on property tax
increases. We have put some new protections in place for taxpayers, but
citizens should not be misled to believe their tax growth has been
capped at 1 percent.”
“Today’s session was an appropriate, albeit measured, response to a
clear directive from the voters,” said Rep. Gary Alexander, R-Olympia,
who serves as ranking Republican on the House Appropriations Committee.
“Homeowners are growing weary of rising taxes that are enacted without
accountability. I hope the spirit of this one-day session carries over
to our work next year when we look at how the state is spending the
taxpayers’ money. The Legislature and the governor have increased state
spending by 33 percent in the last four years. Ultimately, you can’t
control taxes if you don’t control spending.”
Alexander and DeBolt voted against a second measure brought to the
Legislature by the governor and majority Democrats. Senate Bill 6178
would allow some families with incomes below $57,000 to delay payment of
half their property taxes. But the measure would place a lien against
the homeowner’s property and require them to pay the taxes owed plus
interest when the house is sold. The rate would be equal to the federal
short-term rate plus two percentage points, which would amount to 7
percent interest charged to homeowners who want to defer property tax
payments in 2008.
“This is not just bad policy, it is a dangerous scheme for homeowners,”
said Alexander. “It robs equity from families who can least afford it.
We’ve spent much of the last year trying to regulate mortgage lenders
who trap homebuyers with this type of credit offer. The government
should not be engaging in this predatory practice.”
Under the Democrat proposal, the owner of a home valued at $295,000 who
defers half their taxes at 7 percent interest for ten years could owe
the government more than $31,000.
“There is obviously a difference between what the voters view as tax
relief – a one percent growth limit – and what the Democrats view as tax
relief, which is pay up now or pay up later with interest,” said DeBolt.
“We need to put the interest of homeowners first. Not the interest
payments of homeowners in the government’s pocket.”
House Republicans offered an alternative property tax relief measure
which would have provided a $400 tax rebate to all homeowners. Under the
proposal the payments would have been issued to taxpayers within 21
days. A vote to bring the bill up for consideration was defeated by
majority Democrats.
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For more information, contact:
John Rothlin, Staff
Director - (360) 786-7254
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