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Property tax reform on the fast track


Sequim Gazette

If Sequim-area property owners have their way, the tax collector's bag won't get any bigger no matter how much the house is worth. The would-be tax reformers are getting a hand from state Rep. Jim Buck, R-Joyce, who drafted a constitutional amendment and is seeking co-sponsors in the House and Senate.

I'm hoping somebody will take this seriously, Buck said.

The state constitution must be changed before property value assessments can be limited in a way similar to California 's Proposition 13.

Shelley Taylor, who helped organize a taxpayers' meeting in Sequim last month to discuss taxing alternatives, said she was pleasantly surprised at the support she's gotten from the area's legislators.

Buck said he expects to pre-file the draft legislation in the House Dec. 20. That means it can be introduced the first day of the legislative session Jan. 9 and will have a better chance of receiving a required public hearing, Buck said.

"I'm really blown away by the response," Taylor said. "Of course, we still have a huge uphill battle."

The bill must pass both the House and Senate by a two-thirds majority. Then voters must approve it with a simple majority in the November general election before the governor can sign it into law.

"Any constitutional amendment is a tough sell," Buck said. "To be successful, our proposal will need a unified bipartisan coalition of constituents and legislators to make it happen."

For that reason, it does not include a property valuation rollback - setting property values at some prior date. Doing that would take away money school districts, fire districts and other local governments had counted on in their budget process, he said.

"It is doubtful that we could get the necessary two-thirds majority in each chamber if the proposed amendment included a rollback of taxes," Buck said. "We do not want to disrupt the vital services citizens have a right to expect. Our primary goal in advancing the Predictable Property Tax Amendment is to provide property owners long-term and knowable valuation stability."

Though Taylor said there are some who still wish for a rollback, she and others must be content with the political reality to get what is most important - a way to predict one's property tax bill from year to year.

Buck said he heard from many constituents about the issue of tax reform and predictable increases.

"(Tax reform) has been an almost constant undercurrent for 12 years," Buck said. This proposal is the only one now on the table, he said. Since 1997, voters have voiced their discontent with property taxes by approving several initiatives aimed at reducing property taxes within Washington. Voters first approved Referendum 47 in 1997 by a 64-36 percent. This referendum made permanent a 4.7-percent reduction in the state levy that was instituted in 1996, reduced the 6-percent limit on annual growth within a taxing district to a growth factor no greater than the annual inflation rate, and instituted a value-averaging plan for individual taxpayers to limit large-value increases. The state Supreme Court found the third provision unconstitutional in 1998.

Voters passed Initiative 722 in 2000 but it was ruled unconstitutional by the state Supreme Court for violating the constitutional requirement that laws deal with a single subject. In 2001, voters passed Initiative 747 58-42 percent. The measure requires state and local governments to limit property tax collections within each taxing district to 1 percent per year, unless the voters approve additional levy increases.

Although current law limits the amount of property tax money that can be collected in a taxing district each year to a 1-percent increase, some individual property owners have seen their bills spike double digits in recent years. That's because escalating property values in some areas - like around Sequim - end up shouldering a bigger percentage of the taxes collected, even though the total collected is nearly the same as before, said County Administrator Dan Engelbertson.

The state constitution has a "uniformity clause" that requires all properties to be valued equally, based on their assessed values - determined by the market value of similar properties. The Clallam County Assessor's Office revalues properties annually by computer and every six years with an onsite inspection.

With a booming real estate market, property values soar - as do property taxes. That doesn't sit well with many property owners, who see their bills rise dramatically year after year.

"The people need predictability," Taylor said. "The property tax situation is broken."

Though the new law means property valuation will no longer be uniform, Taylor said it would be fairer. If the proposed amendment becomes law, property values would be frozen at the 2006 assessment. Then after, increases would be limited to market value, not to exceed 1 percent each year. New assessments at market value would only be conducted at time of sale or for new construction

--by Leif Nesheim
Gazette staff writer
Published 12.14.05

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