Nov. 30, 2007

Dear friends and neighbors,

At that time, I immediately called for a special session and we also asked Washington Attorney General Rob McKenna to appeal the decision. The governor then said no to a special session.

I sponsored and co-sponsored three bills during the 2007 session and signed onto a bipartisan bill -- all of which would have reinstated the I-747 limit. Unfortunately, the majority party blocked our efforts to move those bills forward.

On Nov. 8, the Washington State Supreme Court upheld the lower court ruling, saying voters didn't understand what they were voting for.

P.S. I'd also like to welcome our newest 18 District state representative, Jaime Herrera, who was sworn into office yesterday. Please read more about Rep. Herrera below.

High property taxes are of great concern to the people in the 18th District (and throughout the state). Many homeowners are at their limit and some are just barely hanging onto their homes. So when the courts threw out the 1 percent levy limit that voters approved in 2001 through I-747, I knew we must act to uphold the will of the people.

Within hours after the State Supreme Court ruled, I stated that a special session should be called to reinstate the provisions of I-747. It took the governor 11 days, but she finally agreed to call the Legislature for a one-day session. That session was held yesterday, Nov. 29, when legislators were already scheduled to be in Olympia.

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. But, that doesn't solve the problem.

'1 percent should mean 1 percent!'
Legislature fails to address local governments' 'banked capacity'

Under current law, any local government that does not levy an increase in any year could "bank" that amount for a future year, allowing them the opportunity for future increases greater than 1 percent. Some cities, counties and special taxing districts have stockpiled that banked capacity, which means that even though the Legislature has 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, I wrote and introduced House Bill 2418, which would require voter approval before local governments could use their banked property tax levy capacity.

On the House floor, I moved that this be brought directly to the House floor for a vote. The majority party defeated the motion, 59-35.

Because we didn't address this issue, the limit is not truly 1 percent. With this previous banked capacity, the local governments that want to raise their taxes by more than 1 percent can do an end-run around the limit we just passed. They will be able to use that capacity and go to increases of 6 percent, 10 percent, perhaps as high as 35 percent. We should have prevented that.

A $400 property tax rebate vs. risky, expensive deferral plan

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 have directed government to give money back to property owners, rather than take more from them. Unfortunately, the majority defeated our motion to bring this bill to the floor for a vote.
 

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.

And under the program, the state would file 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 make it difficult for them to accept a better job in another part of the state.

The difference between proposals
Our proposal would give money back to homeowners. Their proposal would take more money from homeowners.

Rep. Herrera comes to the position of state representative with experience in the areas of health care, education, veteran affairs, social security, Medicare, and Medicaid. She worked on these issues and others as a legislative aide for U.S. Rep. Cathy McMorris-Rodgers (R-WA 5th). She also served as an intern for Sen. Zarelli here in Olympia in 2004.

Rep. Herrera grew up in a family of six children and graduated from Prairie High School in 1996. She has a bachelor's degree in communication and political science from the University of Washington.

She was sworn into office yesterday afternoon, and arrived in Olympia just in time to vote during the special session.

I look forward to working with Rep. Herrera on issues facing the 18th District.