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Orcutt says revenue
department wrong
Kalama
Republican to propose legislation to settle interpretation, address
consequences of Senate Bill 5498
State Rep. Ed Orcutt (R-Kalama) said today that he will
introduce legislation to correct a mistaken interpretation of property
tax legislation passed this year that would result in permanent tax
increases on Washington homeowners and businesses.
A recent interpretation of Senate Bill 5498 by the Department of Revenue
(DOR) says all levy lid lifts are permanent unless expressly noted as
temporary.
“There’s a serious problem
when the Governor’s Department of Revenue is interpreting the
legislation to say that a property tax increase brought to the voters is
permanent – unless expressly stated as temporary,” said Orcutt,
Republican leader on the House Finance Committee. “The governor and the
Department of Revenue need to think twice and side with the taxpayer
before there’s a rush to make levy lid lifts permanent.”
Under current law, taxing districts (e.g. counties, cities, fire
districts, library districts) cannot increase regular property tax
levies by more than 1 percent each year unless a majority of voters
approve a levy lid lift. Other special purpose districts’ lid lifts,
such as fire districts’, were limited to one year. Senate Bill 5498
changed the law to allow those districts to ask voters to approve lid
lifts for up to six consecutive years. A lid lift can be “permanent,”
allowing the higher levy amount to become the base on which future
increases are calculated, or "temporary," which has a limited life and
goes away as if the levy increase never happened.
Orcutt believes the DOR interpretation is wrong. “The legislation
requires taxing districts to state the specific purpose for the levy lid
lift, which I believe makes it a limited purpose tax and therefore
temporary. Now, DOR says these temporary tax increases will never go
away -- something they never brought up when the Legislature considered
Senate Bill 5498.” Orcutt added that under DOR’s interpretation,
taxpayers no longer get to decide how their money should be used.
Orcutt will propose legislation in the 2008 session to fix the problem
created by DOR. “Homeowners are already near the breaking point on the
amount of property taxes they pay. Because of the DOR interpretation
lawmakers should act quickly to protect taxpayers,” Orcutt said.
Orcutt added that if the department’s interpretation is allowed to stand
he’s concerned citizens may not know what they’re voting on next time a
levy lid lift is on the ballot. “Voters may raise their taxes if they
can be persuaded that there’s value to the community and can hold
government accountable. However, they may not realize they’re voting on
a tax that will never go away.”
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For more information, contact:
Bobbi Cussins, Public Information Officer: (360) 786-7252
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