Tag Archives: property tax

Braun: Tell the majority “NO” on higher property taxes

OLYMPIA – A Democrat-sponsored bill that could dramatically increase Washington’s property taxes will receive a public hearing in the Senate Ways & Means Committee at 4 p.m. Monday, March 31. The public is encouraged to sign in CON, testify against the bill, and/or submit written testimony opposing it.

Senate Bill 5798 would remove the 1% cap on the annual rate at which state and local governments can increase property taxes without voter approval. A similar bill in 2024 proposed tripling the cap to 3%, but SB 5798 goes even further—tying increases only to inflation and population growth, with no limit, which could result in annual hikes far exceeding 3%.

Local governments support the bill because it would let them collect more money. However, current law already allows them to exceed the 1% cap, if their voters approve—a fact not advertised by the bill’s advocates.

Senate Republican Leader John Braun, R-Centralia, strongly opposes the bill, stating:

“This policy would blow the doors off everyone’s property taxes. Had this been in effect over the past decade, Washingtonians would be paying double what they pay now. If the state or local governments want to raise property taxes beyond the 1% cap, they can already do that—they just need voter approval. That’s a critical check against excessive government growth. I’m opposed to this effort to bypass the will of the people to take more of their money.

“Washington is in the middle of a housing crisis. Homeowners and renters alike are worried about rising costs pushing them out of their homes. Larger annual property-tax hikes under this policy could lead to more foreclosures and evictions. It would also force many homeowners to sell, increasing demand for rental housing and driving rents even higher.

“Renters often think policies affecting property owners won’t touch them, but that’s not true. Landlords will have to pass tax increases on to their tenants. And if the Democrats also succeed in imposing rent control on our state , many rental-property owners—unable to recover their losses—will sell, taking those homes off the rental market permanently.

“Everyone should be concerned about this bill. If both state and local governments fully exercise the authority granted under SB 5798, property taxes could rise by 8% or more each year. The compounding effect of this tax policy over multiple years will result in billions of dollars in new property tax.”

Using unexpected revenue to reduce taxes

With state tax collections and projected revenues continuing to rise (see chart), I have proposed using up to $1 billion of unexpected tax dollars coming into the state to smooth next year’s transition to Washington’s new education-funding system.

While more than 70 percent of state taxpayers will see a net property-tax decrease once reforms are phased in, the new K-12 funding system has the entire state slated for a tax-rate increase of $0.81 per $1,000 assessed value in 2018.

Creating an equitable and long-term education funding system for our state required a great deal of compromise. Anything more than a short-term property-tax increase necessary to transition between funding systems was not my preferred method.

Ultimately, a one-year increase was necessary to reach a bipartisan agreement.

Every year our state’s chief economist issues quarterly, four-year revenue projections. My proposal would use 75 percent of the unexpected revenue growth – the amount that exceeds the June 2017 forecast – over the next four years to reduce the impacts of the $0.81 state property-tax rate increase in 2018.

The most recent quarterly forecast anticipates another $500 million coming into the state under the current tax structure (again, money beyond what was forecast in June), which would reduce the current $0.81 rate increase to less than $0.50 per $1,000 of assessed value.

With the Legislature having already passed a budget that balances and provides property tax relief for a majority of our state over the next four years, this approach would provide us with an opportunity to amply fund state government and reduce the short-term impact on working families and people with fixed incomes.

Use unexpected tax revenues to reduce short-term property-tax impacts

With state tax collections and projected revenues continuing to rise, Sen. John Braun says he’s willing to use up to $1 billion of unexpected revenue to smooth next year’s transition to the new education-funding system lawmakers adopted in June.

While more than 70 percent of state taxpayers will see a net property-tax decrease once reforms are phased in, the Legislature’s overhaul of the K-12 funding system has the entire state slated for a tax-rate increase of $0.81 per $1,000 assessed property value in 2018.

“Creating an equitable and long-term education funding system for our state required a great deal of compromise,” said Braun, R-Centralia, who serves as chair of the Senate Ways and Means Committee and a member of the education funding negotiating team. “Anything more than a short-term property-tax increase necessary to transition between funding systems was not my preferred method. Ultimately, a one-year increase was necessary to reach an agreement across the aisle.

“Having heard similar concerns about property-tax increases from the governor and my Democratic colleagues, I expect we will see bipartisan support for this legislation.”

Every year state government issues quarterly, four-year revenue projections. Braun proposes using 75 percent of the unexpected revenue growth – the amount that exceeds the June 2017 forecast – over the next four years to reduce the impacts of the $0.81 state property-tax rate increase in 2018. The total offset to the state property tax would be capped at $1 billion.

“With the Legislature having already passed a budget that balances for the next four years, this would provide us with an opportunity to fully fund state government while reducing the impact on working families and people with fixed incomes,” said Braun.

Beginning in 2019, under Washington’s new education funding system, a school district’s local levy will be limited to a maximum of $1.50/$1,000 of assessed property value, up to $2,500 per student. Braun said more than 70 percent of state property owners will have a lower tax rate between 2019 and 2021 than they do now, even if all school districts fully utilize local levy capacity. The amount of people receiving property tax relief would grow if school districts used only a portion or none of their locally allowable levy.

Once this year’s education-funding reforms are phased in school districts will receive the same or more money in state funding alone as they currently take from state and local taxes combined.