Few property bills alive after legislation cutoff

March 15, 2007

Olympia, WA - A Senate bill that exempts a portion of every homeowner's property from state property taxes is alive after the cutoff for fiscal bills passing out of committee.

Also alive is a bill exempting military veterans from paying certain excess-levy property taxes if their disability was complete and service-related.

But a slew of other property tax relief proposals technically died at the deadline Monday for action on fiscal bills. A few that pack some strong political backing could be resurrected later this session, said House Finance Committee Chairman Ross Hunter, D-Medina.

What the bill cutoff means is that few pieces of tax reform are on the table for lawmakers to consider this year as they move into the final six weeks of their 105-day session. The session ends April 22.

"We want to talk through what our options are," Hunter said Tuesday of House Democrats' plans after the cutoff, which saw more than 50 property tax bills go by the wayside.

Hunter's committee approved three property tax bills - including Republican Rep. Tom Campbell's measure to exempt military veterans from tax if they were left disabled by service-related injuries.

House Finance left for dead such high profile measures as House Bill 2117 and HB 2309 - which seek to cap yearly increases in property tax collections. Those bills were offered after a King County judge struck down the 1 percent cap on yearly tax increases that voters adopted in 2001 with Initiative 747, but many legislators say they want to see if the Supreme Court reverses the ruling in May.

House Republicans, meanwhile, are complaining that Hunter failed to move the 1 percent cap bill forward. The ranking Republican on the Finance Committee, Rep. Ed Orcutt of Kalama, rejected the argument that lawmakers should wait for the Supreme Court ruling.

"The Legislature needs to reinstate this law rather than leave the whole matter up to the court," Orcutt said in a statement. "It is time the Legislature protected the taxpayers rather than wait and see if the courts would. Taxpayer protections shouldn't be left to chance."

Orcutt might have to wait for action - in either chamber.

Senate Majority Leader Lisa Brown, D-Spokane, has made clear that she favors the homestead exemption, which shifts property tax burdens from owner of lower-valued properties to more expensive ones and to business properties. It was the only property-tax measure of significance to pass out of the Senate Ways and Means Committee.

It needs a constitutional amendment approved by voters to take effect, which means a hard-to-obtain two-thirds majority vote in the Senate is needed with at least some support from Republicans.

The homestead exemption's prime sponsor, Democratic Sen. Mary Margaret Haugen of Camano Island, said she thinks there is "a real commitment" from Senate Democrats to pass the bill.

But many Republicans are cool to the idea, even though voters would get the final say. Sen. Joseph Zarelli, R-Ridgefield, said during a hearing this week that average home prices in Clark County are more than $300,000, so he thinks most taxpayers could see their taxes go up within a few years under the homestead exemption.

Zarelli based that claim on a statement from Ways and Means staff that the exemption would lower taxes on properties valued at less than $500,000, while raising taxes for more expensive ones.

Business property also would get more of the burden. And groups such as the Association of Washington Business also have been cool, if not hostile, to the homestead exemption concept.

They say it requires a "split" tax roll, treating business property differently than residential, and that property should be treated uniformly under tax codes.

State Department of Revenue figures show that Senate Bill 5187's homestead exemption could cut tax bills by an average $52 per year for homeowners. That assumes that the exemption is only for state taxes and not for local-government taxes. The average tax cut would climb to $259 if local taxes were exempted, too.

Savings would be $88 for the owner of a home valued at less than $100,000 and $98 for a home between $100,000 and $150,000. But the highest-priced properties would see increases: Homes valued $500,000 to $750,000 would be taxed $8 more on average and those more than $750,000 would pay $150 more.

Bills still alive in the Legislature

A few property-tax bills are alive in the Legislature. The Senate Ways and Means Committee on Monday approved Senate Bill 5187 and its companion, Senate Joint Resolution 8210. The others:

SB 5187 exempts the first $50,000 of value of a primary residence from the state's share of the property tax. SJR 8210 sets up the November statewide vote needed to enact the exemption as a constitutional amendment. Both bills are in the Senate Rules Committee, awaiting a floor vote before the March 14 cutoff.

The House Finance Committee moved a few property-tax bills, too:

House Bill 1369, allowing multi-year levy lifts for all taxing districts.

HB 1515, letting participants in a current-use tax-reduction program transfer land to another current-use program without taxes or penalties.

HB 1102, letting veterans with a service-related total disability qualify for the senior property-tax exemption program with incomes up to $70,000. The bill, sponsored by Republican Rep. Tom Campbell of Roy, also exempts the pay connected to total disabilities from calculations of eligibility.

Those bills await a House floor vote by Wednesday.



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