Lawmakers limit hikes in property taxes

Published 10:22 pm Thursday, November 29, 2007

OLYMPIA — State lawmakers and the governor kept their word Thursday by restoring a cap on property tax hikes erased by a Supreme Court decision three weeks ago.

Meeting in special session, the Legislature, by an overwhelming majority, passed a bill to reinstate the 1 percent limit on annual increases approved by voters in 2001.

Gov. Chris Gregoire signed the legislation Thursday night. The law took effect immediately.

She called the special session in the wake of the state Supreme Court ruling that invalidated Initiative 747, the voter-backed measure establishing the cap.

“This bill makes things exactly the way they were prior to the Supreme Court decision,” said Rep. Christopher Hurst, D-Enumclaw. “It will do nothing more and nothing less.”

House Bill 2416 passed by margins of 86-8 in the House of Representatives and 39-9 in the Senate. Democrats cast all 17 of the negative votes. Sen. Darlene Fairley, D-Lake Forest Park, whose district includes part of Snohomish County, was one of the dissenters.

In a day of debates, Democrats opposed to the cap and Republicans who tried unsuccessfully to pass additional tax-limiting measures said they will pursue tax reforms when the 2008 session begins in January.

Gregoire said that conversation should continue.

“I hope this special session does not suggest in any way to the people of Washington that we’re done,” she said after signing the bill into law.

Thursday’s nearly 12-hour session provided Republicans and initiative author Tim Eyman of Mukilteo reason to smile.

When the court threw out the initiative, they immediately launched a very public campaign urging the governor to summon lawmakers back.

“What a great day. We are actually re-enacting the will of the people,” said Rep. Barbara Bailey, R-Oak Harbor, during the debate on the bill.

She sought to counter those who argued that restoring the cap restricts the ability of local governments to raise money to pay for public services.

“There is nothing in this bill that will limit local government or taxing districts to meet the needs of the people,” Bailey said. Elected leaders who make the case for a larger increase will get support from voters, she said.

Thursday’s greater intrigue and source of more impassioned debate surrounded a second bill approved by the Legislature and signed by Gregoire.

It allows some homeowners to defer paying up to half their annual property taxes. The program will apply to people or families with a total income of $57,000 or less and have owned their home for at least five years.

The amount deferred cannot exceed 40 percent of the owner’s equity and must be repaid with interest; those dollars will be recouped by the state when the property is sold or changes possession.

This bill cleared the Senate on a 27-21 vote and the House by a 55-39 tally.

Supporters said this program provides a grace period for those facing an imminent threat of losing their home because they can’t afford to pay their taxes. Sen. Steve Hobbs, D-Lake Stevens, disagreed.

“All it does is let the homeowner pay part of their property tax with the state’s credit card. They have to pay it back with interest,” said Hobbs, one of three Senate Democrats to oppose the bill.

Reporter Jerry Cornfield: 360-352-8623 or jcornfield@heraldnet.com.