By Paul Guppy, Washington Policy Center’s vice president for research
With so much commotion happening in our national government, it is reassuring to know one effective policy in our state is working every day, quietly and effectively, exactly as planned.
That policy is based on the wise decision voters made in 2001 to enact a 1 percent limit on how much state and local officials can increase the regular property tax each year. This modest tax relief idea was so popular it passed with more than 57 percent of the vote. Later, in 2007, the policy was confirmed in a bill passed by most lawmakers of both parties and signed by Democratic Gov. Christine Gregoire.
The policy applies equally to all 1,200-plus sets of taxing officials in our state. That’s a good thing, because every home and business is taxed by several jurisdictions at once. Some properties are hit by ten different sets of officials, from the state, county, and city to so-called “junior” tax districts for schools, parks, and transit.
It all adds up to the heaviest property tax burden Washington residents have ever paid, and it continues to go up every year.
Opponents of the 1 percent limit predicted the sky would fall. They said police and fire services would go unfunded, health centers would close, roads and bridges would fall apart, crime would surge.
The opposite happened. Today, funding for local budgets is at record highs, and elected officials take more money from us than at any time in history.
The 1 percent cap works well because it applies to only one kind of tax, the regular, or base, property tax. Other fees and taxes are unaffected, and the law even lets officials increase the regular property tax as much as they want, if they ask voters first.
Now some lawmakers want to take away a policy that is working well. One bill, HB 1764, was introduced to repeal the 1 percent limit and replace it with a 5 percent limit, a 500 percent increase in how much officials could raise taxes. That bill didn’t pass, but a tax limit repeal could be written into the budget later in the session.
Why is it that when elected officials feel they are short on money their first instinct is to increase taxes on the people? They seem to think cutting household incomes is more important than making hard decisions about how to spend existing rising revenue. They want to make their public work easier by taking more money from their constituents.
In the next two years state revenues are slated to increase by $2.6 billion, or more than 6 percent, from all sources. Most working families would be delighted with yearly income increases of 6 percent. The property tax limit works as a modest brake on some state and local officials, who, in their incessant quest for more money, act as if the public never pays them enough.
If the property tax limit is pulled back, the resulting burden will fall hardest on the poor, on immigrant families, on hourly workers, and on elderly people living on fixed incomes. What some officials don’t seem to realize is that whenever they raise taxes, they make their jobs easier by making life harder for everyone else.
Washington’s 1 percent property tax limit is one of the most successful homeowner protection policies in the country. Without starving government, it is helping elderly people stay in their homes, helping young couples afford a home, and helping keep at least some housing stock affordable in many communities.
Modest property tax limitation serves the public interest because it shows respect for a clear decision made by the people of our state, one that is proven by experience and was confirmed by a majority of lawmakers of both parties.
The 1 percent property tax limit works; why not leave it alone?
Reach Paul Guppy, vice president for research for the Washington Policy Center, at 206-937-9691 or pguppy@washingtonpolicy.org.