Property tax relief is still nominal at best

With the annual notice from the county assessor comes the annual caveat: higher home valuations don’t necessarily mean higher property taxes.

Oh, your property taxes will go up when you get the bill in February 2007. But don’t blame the assessor; you get to take the credit yourself. That’s because islanders – rightly, we believe – this year voted to tax themselves more (to the tune of $51 million) to bring local public school buildings up to snuff and add technology to the classrooms.

The fact that the assessor this week says island homes are worth 15-19 percent more than they were this time last year is incidental; your next property tax bill will be a function of the higher taxes approved by island voters themselves.

Ongoing confusion over this fact has been exacerbated somewhat by Initiative 747, the 1 percent property tax limitation imposed by Washington voters in 2001 and recently struck down by a King County judge. Many Washingtonians understood the initiative to mean that increases in their individual property tax bills would be capped at 1 percent each year, when this was never the case. As long as their neighbors were willing to vote for new bonds and levies, the cap was nominal.

While lamenting the property tax burden, Evergreen State folk might someday also consider revenue-neutral tax reform to shift it in a more progressive direction.

When he ran for governor two years ago, King County executive Ron Sims touted a novel tax reform plan for Washington. The plan included a state income tax on top earners coupled with relief from property taxes on the first $100,000 of a home’s valuation. Sims earned more derision than votes – “conventional wisdom” deemed a state income tax politically impossible, and therefore unworthy of serious thought – but it was precisely the kind of innovative thinking needed.

The alternative is the predictable and maddening circle in which the the state’s property owners find themselves today, which goes like this:

Washington voters impose property tax limits on all local jurisdictions; local residents find those limits too restrictive, and vote to tax themselves more to pay for specific services. Washington voters complain that property tax limits aren’t working – why else would their taxes be going up? – and demand that new limits be imposed; those new limits are in turn breeched by local voters, and the burden falls again on property owners. Repeat.

At best, the 1 percent property tax limitation has had a decelerating effect on the revenue of a few agencies unable to get more funding past the voters; at worst, it has widened the chasm between “have” and “have not” communities, those who could afford to pay more in taxes versus those who have watched their schools and municipal services erode away.

There’s already talk in Olympia of reimposing the 1 percent property tax limitation via the Legislature, and Washington (and even Bainbridge) may well support that. But in any community – like this one – with pocketbooks deep enough to work around it, such a cap means next to nothing.

More than easing the burden, Washingtonians need to redistribute it.

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