Eyman turns attention to property taxes

OLYMPIA — Mukilteo’s Tim Eyman hopes to take another whack at Washington’s property taxes, cutting local tax bills by an estimated $550 million a year if voters go along with his 2004 initiative.

The initiative would mean an average annual savings of $255 for homeowners and commercial property owners combined. Local governments said the tax rollback would knock a huge hole in local budgets across the state.

An earlier Eyman-led tax revolt, Initiative 747 in 2001, severely restricted the growth of the property tax, but Eyman said Monday that his latest effort would go further, cutting some local property taxes by 25 percent.

The new proposal, aimed at the fall statewide ballot, would exempt voter-approved levies such as special school levies from the cuts.

Eyman estimates his plan would save taxpayers — and cost local governments — roughly $550 million a year. The average annual savings would be $255 on an average tax bill of $3,432, he said, citing Department of Revenue statistics.

"It ain’t chump change," he said in an interview.

The average homeowner paid $2,001 in property taxes this year; the total take was $6.3 billion, up from $1 billion in 1980. The revenue agency said Eyman’s initiative would trim the average homeowner’s tax bill by $177 a year. When commercial property is added, the average savings is $255.

The local property tax accounts for about three-fourths of an average homeowner’s property tax bill. Eyman is targeting the half of the local levy that is not directly approved by voters. That accounts for about 36 percent of the total property tax bill.

Eyman abandoned earlier plans to target the state government’s share of the property tax, which is earmarked for public schools. That plan would have cut taxes about $350 million a year, roughly the same amount legislators raised the gasoline tax.

In an e-mail going out to his supporters on Tuesday, Eyman calls the new plan a "smart, balanced, reasonable proposal that voters will enthusiastically embrace."

Steadily growing local property taxes are the problem, not the state-collected school tax, he said. "During these tough economic times, families and senior citizens are really struggling. Taxpayers deserve more relief than the original proposal offered …

"More tax relief, a bigger boost to the economy, with no impact on school levies and concentrating on the biggest culprits causing the problem — that’s the right approach."

Eyman said the 2003 Legislature held the line on taxes while throwing tax incentives at the aerospace industry, but did nothing to relieve property owners. Even with tax limits, property tax bills continue to mount and drag down the economy, he said.

"This has been building up for two decades," he said.

Eyman said he will send out solicitation letters and e-mails this week. All contributions will be used for signature-gathering, including paid solicitors, and he and co-chairmen Jack and Mike Fagan of Spokane will ask backers to provide salary money later in 2004, he said.

Eyman and his political action committee, Voters Want More Choices, will have until July to collect about 250,000 voter signatures to earn a place on the November ballot.

Critics said the new Eyman plan would hurt financially strapped local governments, which already are having trouble paying for criminal justice costs, fire protection and other services.

"If you vote for Tim Eyman’s initiative, there will be service cuts, no question about it," said David Goldstein, a Seattle software designer who ran a tongue-in-cheek initiative to have voters declare Eyman a "horse’s ass."

Goldstein and initiative activist Steve Zemke said they will sponsor a rival initiative to create a $30,000 "homestead exemption." This would exempt the first $30,000 of value of a household’s primary residence from taxation.

Eyman called that "an unconstitutional fantasy that ain’t going to happen." The homestead exemption would require legislative and voter approval as a constitutional amendment, he said.

Bill Vogler, executive director of the Washington Association of Counties, said counties rely on the property tax for 47 percent of their budgets, on average. He estimated that cities use the tax for about 20 percent of their budgets.

The Eyman initiative would eliminate $180 million from county general fund budgets and $85 million from road funds, Vogler said.

Counties have been tightening their belts for years and already are having real trouble providing the level of services people demand, such as police protection, he said. Criminal justice costs are eating up 70 percent of the average county’s budget, he said.

Eyman declined to talk about how local governments would cope with his initiative.