House approves property tax cap

Published 2:00 pm Thursday, November 29, 2007

OLYMPIA — Few lawmakers were willing to stand in the way of property tax caps on Thursday, with the Democrat-dominated House voting overwhelmingly to reinstate a voter-approved initiative thrown out by the courts.

On an 86-8 vote, the House passed a bill requested by Gov. Chris Gregoire that restores the provisions of Initiative 747. That initiative, sponsored by anti-tax activist Tim Eyman, capped annual increases of certain property tax collections at 1 percent.

Many minority Republicans, even those who thought the bill didn’t go far enough, supported the measure. A GOP amendment to wipe out old, unused taxing capacity that some local governments have saved up was not even allowed a vote.

“I feel kind of like the Lone Ranger here,” said Rep. Geoff Simpson, D-Covington, who said he opposed the bill because it would starve local government services.

The vote sent the measure to the Senate, which also needs to approve a deferral program for those making less than the state median income — the other half of the Democratic majority’s two-pronged property tax reform package.

Gregoire, who requested both bills, hoped to sign them into law by day’s end.

Rep. Chris Hurst, D-Enumclaw, sponsored the bill reinstating I-747. He was one of many lawmakers who said the Legislature needed to re-enact the will of the voters.

“I can’t go along with changing what the voters did,” Hurst said.

Voters approved I-747 in 2001, but the state Supreme Court threw it out on technical grounds earlier this month. The ruling, which came just days after voters displayed a penny-pinching mood in the statewide election, prompted Gregoire to call the special session.

The measure would take effect immediately when signed into law.

Eyman criticized lawmakers just after the session got under way Thursday morning, saying Democrats weren’t going far enough to limit property taxes.

Millions of dollars in unused taxing capacity — which Eyman unsuccessfully tried to wipe out with an earlier initiative — also should be repealed, he said.

“Gregoire and the Democrats don’t care about the taxpayers. They’re pretending to care about taxpayers,” Eyman said.

Democratic leaders dismissed that complaint, but said the issue could be part of a deeper look at property taxes expected once the Legislature returns for its regular session in January.

Democrats, however, already appeared split on just what those reforms would look like.

House Speaker Frank Chopp, D-Seattle, said the 1 percent cap would be a closed issue once the special session finishes its work. But Senate Majority Leader Lisa Brown, D-Spokane, didn’t rule out more changes.

“When we come into a new legislative session, all the property tax proposals will be on the table,” Brown said.

Thursday’s second bill, the tax-deferral program for lower-income homeowners, was modeled after an existing plan for seniors and the disabled.

It would allow homeowners making less than the median state income — presently about $57,000 — to put off paying up to half of their yearly property tax bill until their home is sold.

State dollars would replace what local governments normally would get, and the state would get repaid with interest when the property changes hands. There are some conditions for participation, and the state expects about 7,500 people to take part in the first year.

Sponsoring Sen. Claudia Kauffman, D-Kent, said the deferral program gives homeowners a “grace period.”

Republicans, however, said the plan is an overall tax increase because participating homeowners will have to repay the taxes with interest. They also called it akin to predatory lending, since the state would hold a lien against the home.

Instead, House Republicans wanted to offer homeowners a $400 property tax rebate. But Republican bills weren’t getting hearings during the session, following Gregoire’s request to limit the debate to the two Democratic property tax measures.

Some Democrats and activists on the political left have been unhappy with the entire special session, saying it amounts to a politically calculated cave-in that gives a victory to anti-tax forces.

Sen. Craig Pridemore, D-Vancouver, was one of the leading dissenters. He’d hoped for a temporary reinstatement of I-747 or other measures, but was resigned to losing that battle as the frantic session began Thursday morning.

“I think this is a knee-jerk process and the chaos around here reflects that,” he said.