The Washington State legislature will reconvene Thursday for a one-day special session. Lawmakers plan to reinstate a one-percent cap on property tax increases that was thrown out by the Washington Supreme Court. But minority Republicans are already calling the Governor’s bill “a sham.” Olympia correspondent Austin Jenkins explains.
The Governor’s bill is short — just a page and a half. It sets a one-percent cap on the amount taxing districts can increase property taxes each year without voter approval.
Governor Chris Gregoire, a Democrat, says her bill fixes what the Supreme Court undid when it tossed out Initiative 747 earlier this month.
Chris Gregoire: “I think the people of the State of Washington made it clear when they passed the initiative what they wanted and they wanted the cap. And so I think it’s responsible on our part to reinstate the cap.”
But Republican lawmakers are crying foul.
Don Benton: “It’s really not a one percent limit.”
Don Benton is a State Senator from Southwest Washington.
Don Benton: “A true one percent limit is a bill that would eliminate banked capacity.”
Banked capacity is Olympia-jargon for stored-up taxing authority.
Here’s how it works. Let’s say a taxing entity — like a fire district — doesn’t increase taxes the maximum amount allowed in a year. It can then save that unused taxing authority for use at a later date.
When times get lean, that fire district can tap its banked capacity and raise taxes beyond the one-percent cap.
Again Senator Benton.
Don Benton: “If the goal is to require that any levy increase in excess of one percent require voter approval, and I hope that’s the goal, then the Governor’s bill doesn’t do the job.”
But the Governor’s bill does address the biggest concern — banked capacity that’s been stored up since 2002 when the one-percent cap went into effect.
The Governor’s bill says taxing districts can’t go after back taxes they feel they’ve lost in the past five years.
King County Assessor Scott Noble, a Democrat, says that’s important to protect taxpayers. But he disagrees with Republicans who say the bill needs to go further.
Scott Noble: “If you get rid of all banked capacity, you’re forcing districts to do one of two things — or maybe both. Use all their banked capacity as fast as they can or take their absolute maximum property tax levy each and every year so as not to be penalized and lose any of it.”
Expect to see Republicans try to make hay of the banked capacity issue during the one-day session. But since Democrats have healthy majorities, the Governor’s bill should carry the day.
In addition to the one-percent cap, Governor Gregoire will ask lawmakers to pass another property tax measure. It would allow families that make less than $57,000 a year to defer a portion of their property tax payments until they sell their home.