|
Taxes: Truth and transparency lacking
By Rep. Ed Orcutt
Property taxes are very
complicated –- and the issue of multi-year lid lifts is no exception.
Worse than their complexity is the interpretation and implementation of
those laws by local governments. And what you don't know not only can
hurt you, it can devastate your finances.
Lid lifts allow taxes to increase above the state's 1 percent limit upon
approval by voters. They once were limited to single-year increases.
However, in 2007 the Legislature authorized them for up to six years
with
Senate Bill 5498.
The passage of multi-year lid lifts was bad enough, but the
Department
of Revenue's (DOR) recent interpretation of the legislation further
confused the issue. The agency deemed all lid lifts to be permanent unless the
ballot specifically stated they were to be temporary.
A bill DOR has proposed to clarify intent does little to clarify
anything –- especially impact on homeowners. It addresses whether a lid
lift is permanent or temporary. But DOR's strategy is to keep permanent
any single-year lid lift unless the ballot states that it will be
temporary -- changing only multi-year (two- to six-year) lid lifts to be
temporary unless the ballot states they are permanent.
The House Finance
Committee just passed a measure they say will correct the problem.
House Bill 2554 would make all lid lifts temporary unless the ballot
states that it would be permanent.
But a problem would still exist with this bill. Some lid lifts
already have been approved since SB 5498 passed. And more may be approved soon. It is quite
likely that voters expected these lid lifts to be similar to excess
levies which are approved for a set period of time and then expire.
Districts must then come to the voters to ask for the levy to be renewed.
But these levies are even more complicated than the excess levies – and
could be far more costly to homeowners. A permanent lid lift would never
go off the books. And if the districts came to ask for another
lift, it would be added to the previous one instead of
replacing it. And those lid lifts which are temporary would still
reset back to what they would have been if districts were held to the 1
percent limit, so it would never completely expire.
Many of those lid lifts were passed with no mention of whether or not
they would be permanent. In testimony by the Washington Fire
Chiefs, it was made clear that fire chiefs and fire
commissioners met with attorneys who agreed with the DOR interpretation.
But did they tell that to the voters? No.
The solution? Require that any lid lift already passed be
considered temporary unless the ballot stated that it would be
permanent. That's the retroactivity clause in my bill,
House Bill 2627. The fire chiefs
and fire commissioners are fighting this. Even if they had only intended
the lid lifts to be temporary, they could use the DOR interpretation to keep them
permanent – after voters approved them. This decision could be made six
years after voter approval.
Simply put, fire commissioners didn't tell voters all the details –- and
now appear to be trying to hide it after the fact. This is for the
district's
benefit -- and to the taxpayers' detriment. They are actively opposing the
property tax protections I am seeking for the taxpayers -- protections
that the Legislature has weakened ever since Initiative 747 was enacted.
Taxpayers need to tell local fire chiefs, fire commissioners and
legislators that any bill without retroactivity is unacceptable.
Legislators need to add the retroactivity clause to HB 2554 -- or pass
HB 2627 -- in order to have truth and transparency in taxation.
# # #
Editor's note: Rep. Ed Orcutt,
R-Kalama, is the ranking member on the House Finance Committee. He
represents the 18th Legislative District and is a leader on property tax
issues in the Legislature.
For more information, contact:
John
Sattgast, Senior Information Officer: (360) 786-7257
|