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Tuesday, March 27, 2007

Democrats 4 Eyman

posted by on March 27 at 10:10 AM

UPDATE: Rep. Hunter called to say I misunderstood our conversation this morning. He’s right. Hunter said it’s likely the courts will reinstate Eyman’s I-747. As for the House Democrats, Hunter says he just doesn’t know. However, the Dems are taking up the 747 bill this week in caucus, a bill that never made it through committee. I have edited my original post to correct the record.

State House Finance Committee Chair Rep. Ross Hunter (D-48, Medina) just told me the Democrats may enshrine Tim Eyman’s 1 percent cap on property taxes on the books.

Tomorrow afternoon, the Democratic House caucus is taking up a bill to do just that.

(Eyman’s 747, which handcuffs local governments from keeping pace with inflation, stalling the ability to provide services, was tossed by a KC superior court judge last year.)

Says Rep. Hunter, who’s heading up the discussions: “I don’t know what we’re going to do. We might reinstate 747. We might not. I don’t know. I think it’s likely the court will reinstate it.”

I understand that Dems feel compelled to do something about property taxes. Indeed, the poorest homeowners pay 6 percent of their income in property taxes (seniors are particularly hard hit) while the richest bracket pays 2.8 percent. Certainly, this doesn’t seem like a fair system. But, considering that Eyman’s system has been in play for 5 years now, it hardly seems like 747 is the fix.

Nervous that the Dems were still interested in codifying 747, I wrote this column in last week’s Stranger.

RSS icon Comments


Isn't the real issue with the increase in property taxes based on assessment rather than rate? If your home is reassessed at a 10% annual increase, even with a 1% cap, you'll still be paying 11% more year-over-year.

Or am I wrong on this?

Posted by DOUG. | March 27, 2007 10:12 AM

I don't have an opinion on the numbers, as I am not versed enough in the situation to comment, but for the reporting: I do find it funny that Josh's posts on the rainy day fund (ie, a spending decision) show only opponents using language like "having [their] hands tied when doing the budgeting."
In this post, the issue is about taxation, and now Josh's reporting gets into language like "handcuffs local governments" and "stalling the ability to provide services" So mandates about how the government collects money are handcuffs, but spending isn't?

Josh, Just jumped out at me as I reviewed the last few days posts. Peace.

Posted by torrentprime | March 27, 2007 11:04 AM

Doug, I think you're right, at least for some of the variations of this proposal. And that taps into the same source of anger that Eyman struck gold with in the car tabs debate: people don't like paying more taxes, but they really hate being lied to. And they know what their house or car is worth, so when they see an assessment where the government is overvaluing their property to a ridiculous degree just to extract more taxes, it really pisses them off.

Capping property (and sales) taxes would be a good way to make a switch to an state income tax more palatable; if you're going to get into constitutional amendments anyway, you might as well go go for the whole package and try to get the state on a more progressive base. Many of the people who oppose a state income tax do so because the (rightly) suspect that it would be in addition to all the existing taxes; establishing it as part of a mechanism that freezes or repeals some of the other taxes is the only way it would get enough support.

Posted by Joe | March 27, 2007 11:11 AM

What a crappy idea.

Posted by Will of Horse's Ass | March 27, 2007 11:13 AM

We need a state income tax. It seems that if you don't own real estate, you're completely disenfranchised from the political process. I'm sick of our state (and city's) dependence on a regressive sales tax, and the disproportionate attention paid to the needs of the property-owning class.

Posted by demolator | March 27, 2007 11:26 AM

RE: Update

Wow, someone in Olympia reads SLOG!

Posted by elswinger | March 27, 2007 11:32 AM

dmolator @5, it isn't just the "property-owning class".

Renters pay property tax too. They are just unaware of it (mostly).

Landlords pay property tax, just like everyone else. When the property taxes go up, do you think they just absorb the added costs? No. They use it as an excuse (completely justifiably) to raise the rents to cover the increase in taxes. So renters pay property tax indirectly through higher rents.

Posted by SDA in SEA | March 27, 2007 11:38 AM

"Taxes are the price we pay for civilized society" Oliver Wendal Holmes (US Supreme Court early 1900's)

Posted by Andrew | March 27, 2007 11:50 AM

Right. What I meant was that renters don't have the ability to elect their landlords. The state doesn't pay attention to renters in the same way that it does to property owners. It's just a fact.

Posted by demolator | March 27, 2007 11:50 AM

I don't get this idea that houses are overvalued by the tax assessors to increase revenue. The assessed value of my house (assessed by King County) is far below what houses are going for in our overheated market. It actually looks on par with what the real value increase of the house would be minus the housing bubble. That seems about right to me.

I do wish it were politically possible to shift property tax burdens onto wealthy homeowners by giving each person a property tax deduction equal to the median value home in their area, and then adjusting the tax upwards for all real estate value above the median. That would protect the largest asset of many middle class homeowners, even during a runup in prices or for seniors on a fixed income, while maintaining revenue and ensuring that multi-property landlords paid their fair share.

But with tax politics as they are in this state, with even the estate tax under assault, it's probably futile to ever hope for this kind of sanity on property taxes.

Posted by Cascadian | March 27, 2007 1:15 PM

I should add that one drawback of the system I just mentioned is that it could potentially screw renters who would end up paying the additional costs for their multi-property landlords. But arguably the lower cost of home ownership at the entry level might draw more renters to buy, offsetting the problem.

I can also see this encouraging lower-cost condos, because condos below median value would not be taxed on their value alone. This would also discourage people from speculating on flipping condos for a profit, as buying more than one would eventually incur taxes that are avoided with a single property.

The ideal that the government should encourage is one-property ownership of moderately sized homes or condos that increase urban density. Better property tax policy, drafted by someone smarter than me, could help do this.

Posted by Cascadian | March 27, 2007 1:24 PM

Sounds great! Cap property tax to dry up funding for schools and social services, then watch as your neighborhood slowly goes to hell, which in turn will lower your property value, thereby lowering your property tax. It's win-win!

OK, so I'm exaggerating a bit. Maybe.

Posted by Dougsf | March 27, 2007 3:01 PM

When Josh says he "misunderstood," he trying to avoid admitting that he misquoted someone.

Posted by Editor's Note | March 27, 2007 5:53 PM

Josh is a doofus. It's part of his little guy charm.

Posted by Miss Manners | March 27, 2007 6:53 PM

While we're at it, the federal tax code should have the mortgage interest tax deduction for second homes removed. Joe sixpack may have a cabin out at the lake, but he doesn't have a mortgage on it. That's a tax break for the rich if I ever saw one.

Posted by Joe | March 27, 2007 8:18 PM

Hunter is on Drugs.

That said, he probably thinks RTID will pass too.

Sad, very sad.

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