Warning: New taxes will be permanent
August 19, 2007
A change in the state law regarding property taxes has silently transformed what have been temporary tax increases into permanent ones.
We say "silently" because the Legislature, which made the change, did not name what it was doing in the bill title or the bill reports. The change is something every voter should keep in mind as the election arrives Tuesday and more new taxes are proposed in November.
On the surface, Senate Bill 5498 allows fire districts and other special-purpose taxing districts to ask voters for multiyear tax increases. It is the same authority cities and counties already had.
The nonobvious part of the bill changed the old rule that unless a tax levy said specifically it was permanent, it wasn't. Under the old rule, after a levy expired, Washington's 1-percent property-tax limit would be set as if the levy had never happened. If voters didn't renew the levy, their taxes would go down.
Under SB 5498 — a governor's-request bill passed by large majorities in both houses — unless a tax levy says it is temporary, its authority is permanent. So says the Department of Revenue in an official memo to county assessors.
To be deemed temporary, a measure has to say when the tax expires, and it has to limit itself to specific purchases. Otherwise, in the year after the last tax increase authorized by voters, the new tax limit is 1 percent higher. Even if voters don't renew the levy, the taxing authority can keep pushing taxes up — at a slower rate, but still up.
King County Assessor Scott Noble, who drew our attention to this, has looked over the 11 property-tax measures that will be on county ballots Tuesday: two for King County parks, two for Redmond, one for a hospital district and six for fire districts.
"All of them are permanent increases in new levy capacity," he says.
More are coming. The Maple Valley Fire and Life Safety District has announced a ballot measure to raise taxes in 2008 by the increase in property values, and again (but no more than 15 percent per year) from 2009 to 2013.
"It's permanent," Noble says. "In 15 years in this office, I have never seen anything like it."
Noble wonders if legislators who voted for this knew what they were doing. So do we.
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