OLYMPIA — As legislators struggle to agree on how to fund schools, roads and government services, a pair of state lawmakers are throwing another tax proposal into the mix.
Two state representatives Tuesday introduced a bill that would lift the 1 percent cap on local property tax levies.
Voters approved the 1 percent cap in 2001 via Initiative 747. In 2007, the state Supreme Court struck it down – and lawmakers and then-Gov. Chris Gregoire reinstated it that year in a special session.
The cap, which can keep property tax revenue growing at a slower rate than annual inflation, has been cited by King County as a reason for cuts to services like law enforcement and road maintenance. King County is even considering releasing people arrested on felony drug and property crime charges so it can cut jail costs.
HB 2255 would replace the 1 percent property tax cap with a formula tied to inflation and population growth. It would allow an increase as high as 5 percent, according to the bill.
The proposal is sponsored by Reps. Larry Haler, R-Richland, and Ross Hunter, D-Medina, who chairs the House Appropriations Committee.
In a statement supporting the bill, the Washington State Association of Counties argued that the cost of essential public services increases by 3 percent and 5 percent every year.
But it’s far from certain that lawmakers will have the stomach to lift the property tax cap this year. Legislators are already pondering a statewide transportation package that includes an 11.7-cent per gallon gas tax hike.
And then there are the multitude of proposals to change the local property tax levy system that helps fund education. The Supreme Court called for changes in its 2012 McCleary decision.
Senate Democrats have proposed a capital-gains tax to help pay for education. Senate Republicans have proposed a levy swap that would increase taxes in “property-rich” areas like the Puget Sound region to compensate for “property-poor” areas elsewhere.
On Monday, Democratic lawmakers presided over a “people’s hearing” for citizens to talk about the need to pass their budget proposal. The budget plan includes a tax on some capital gains, eliminates some tax exemptions and raises part of the business-and-occupation tax. Organized by Washington United for Fair Revenue, teachers, nurses, home health-care workers and others spoke about the need for a fairer tax system.
Democratic House Speaker Frank Chopp of Seattle, Senate Democratic Leader Sharon Nelson of Maury Island and Hunter, among others, listened to people from each of the state’s 49 legislative districts speak.
“I pay my fair share in taxes . others should pay their fair share too,” Shazia Anwar, a 45-year-old caregiver and member of SEIU 775, told those gathered.
But while Republican lawmakers have supported the gas tax hike and levy swap proposal, they’ve pushed back against the idea that new revenue is even needed for the 2015-17 budget. And GOP lawmakers have called the capital gains tax too volatile to count on.
Rep. Drew Stokesbary, R-Auburn, tweeted after Monday’s event that despite being a member of both the House Appropriations and Finance committees, he hadn’t heard of it beforehand.
“Makes it seem political,” wrote Stokesbary, “not policy oriented.”
