E-newsletter from Rep. Mike Armstrong - 12th Legislative District

State Representative Mike Armstrong - 12th Legislative District

Olympia Office:
426-A Legislative Bldg.
P.O. Box 40600
Olympia, WA 98504-0600
Phone: (360) 786-7832

Toll-Free Legislative Hotline
1-800-562-6000
Website
www.houserepublicans.wa.gov/Armstrong

Committees:
Appropriations Subcommittee on General Gov't and Audit Review (Ranking)
Rules (Alternate)
State Government and Tribal Affairs
Transportation

SPECIAL SESSION UPDATE Nov. 30, 2007 Dear friends and neighbors, It's been 17 months since a King County Court initially threw out Initiative 747, calling it unconstitutional. The initiative, approved by voters in November 2001, prohibited taxing districts such as the state, cities, counties, fire districts and library districts from increasing their tax levies by more than 1 percent a year without voter approval. The King County Court decision was appealed. Unfortunately, the Washington State Supreme Court upheld the ruling on Nov. 8, saying voters didn't understand what they were voting for. Nonsense! Voters clearly knew what they wanted -- protections against higher property taxes! From the first day I-747 was overturned, my House Republican colleagues and I have called for reinstatement of the 1 percent limit. We called for a special session in June 2006 when the court first ruled. Unfortunately, the governor refused. We introduced several measures during the 2007 legislative session to reinstate the 1 percent limit. At each step, the Democrat majority blocked our bills. Finally, the Supreme Court ruled this month. Again, we called for a special session, along with the citizens of Washington. It took the governor 11 days, but she finally decided that we were right, and called a special session to address the property tax limits. The special session was held yesterday in Olympia. This e-newsletter provides an update of the results of the special session. I'm very pleased that we were able to move forward on this issue. However, more needs to be done to protect our homeowners in the 12th District. I will continue working on your behalf to ensure the property tax protections you need and deserve. Thank you for the honor of allowing me to serve you! Rep. Mike Armstrong 12th Legislative District ELECTION YEAR RESTRICTIONS P.S. Due to upcoming election year restrictions, this will be my last e-newsletter to you until December 2008. State law restricts legislators from sending more than two mailings in the 12-month period beginning on Dec. 1 of the year prior to their election to office and extending through Nov. 30 following the election. This restriction also includes e-newsletters. So after the end of this week, I will not be allowed to send you e-newsletters, such as this one, until Dec. 1 of next year. Communication with you is very important to me. Although I will not be allowed to initiate written communications with you using state resources (with the exception of the two allowed newsletters), I am allowed to respond to communications initiated by you. So I encourage you to write or e-mail me at any time you have questions or comments, and I will be glad to respond.

Reinstating the 1 percent levy limit of I-747 High property taxes are great concern for our folks in the 12th District. This last year, we've watched as assessments have increased by 100 percent or more. So when the courts threw out the 1 percent levy limit that voters approved in 2001 through I-747, I knew we had to act right away. I was ecstatic that the Legislature was called into special session so that we could address the property tax issue now -- BEFORE local governments approve their budgets -- so that we could ensure the 1 percent levy limit stays intact. With a vote of 86-8, the House of Representatives yesterday approved House Bill 2416, reinstating the 1 percent property tax growth limit adopted by voters in Initiative 747. The measure also makes the changes retroactive to 2002, meaning local taxing districts will not be able to collect back taxes from the time the initiative was first put into place.

'One percent means one percent!' Legislature fails to address local governments' 'banked capacity'
	While reinstatement of the 1 percent levy limit is a victory for taxpayers, I am still concerned that the Legislature failed to provide another necessary protection against "banked capacity." Under the law, if a taxing district (local government) does not levy an increase in any year, it can "bank" that amount for a future year, allowing it the opportunity of increases greater than 1 percent. Some cities, counties and special taxing districts have stockpiled that banked capacity, which means that even though we have now adopted a 1 percent levy limit, they are still able to use that capacity, resulting in increases higher than 1 percent. To address this issue, House Republicans introduced House Bill 2418, which would require voter approval before local governments could use their banked property tax levy capacity. Unfortunately, majority Democrats did not allow our bill to have a hearing during the special session. When the voters approved the I-747 limit, they wanted 1 percent. I believe 1 percent means 1 percent. Yet, under the bill the Legislature adopted yesterday, banked capacity could mean levy increases larger than 1 percent. It's my hope we can address this issue in the 2008 session which begins Jan. 14.

A $400 property tax rebate vs. risky, expensive deferral plan
What's the difference between the philosophy of Republicans vs. Democrats on the property tax debate? It can clearly be outlined when comparing two bills proposed in the special session. The Republican proposal - Tax rebate (House Bill 2419) Real property tax relief is when you get to keep more of your hard-earned money. House Republicans proposed that a $400 rebate go to all residents who paid property taxes on their primary residence in 2007. Our plan would direct government give money back to property owners, rather than take more from them. Unfortunately, the Democrat majority refused to allow our bill to move forward.
The Democrat proposal - Tax deferral plus interest (Senate Bill 6178) Majority Democrats proposed and passed a bill that would allow homeowners with a household income of less than $57,000 - the state's median income - an opportunity to defer up to 50 percent of their annual property-tax bill until they sell their homes. The homeowners would have to pay interest on the deferred taxes based on the federal rate, which is currently around 7 percent a year. While the 1 percent limit is necessary and prudent, this proposal is not. This is tax deferral, NOT tax relief. Those who enter this program will have to pay the money back -- with INTEREST. In some parts of the state, a 10-year deferral on a $295,000 home at 7 percent interest (this is a variable rate which could be higher) means that you would have to come up with more than $31,000 to pay the state when you sell your home. Under the program, the state has a lien against your home. When you sell the home, the taxes are due, PLUS interest. That could mean that equity built in your home goes to the state of Washington. I am very concerned that this program will take advantage of people who can least afford it and could result in more people losing their homes. The difference between proposals Our proposal would give money back to homeowners. Their proposal would take more money from homeowners. That's the difference.

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