Property taxes a major issue as Legislature enters final days

The following op-ed appeared in the Dayton Chronicle and Prosser Record-Bulletin during the week of March 5. Note: After this op-ed was published, the Legislature ultimately approved a plan that offered a partial property tax reduction — about $400 million — but does not apply until 2019, after the temporary spike has passed. To enable higher spending this year, Democrats tapped the state’s Rainy Day Fund savings to provide property tax relief. This fund is supposed to be used only for emergencies and catastrophic occurrences.

By Sen. Maureen Walsh, R-Walla Walla

People across the state right now are receiving a rude shock as their property tax bills arrive in the mail. Taxes have skyrocketed in some areas, largely because of a new school-financing system adopted by the Legislature last year. At the same time, the Legislature is sitting on a massive pile of cash it wasn’t expecting a year ago – more than enough to solve the problem.

You might think property tax relief would be an easy decision. But the Legislature is a curious place. We don’t often find ourselves giving money back. Suddenly property tax relief is provoking one of the biggest arguments of our 2018 legislative session.

This new debate is really one of the biggest turnarounds we have seen during the course of a single legislative session. When session started, many assumed it would close with argument on enormous tax increases. But state economists have told us a booming state economy will generate an additional $2.3 billion in tax revenue. We don’t need more money – and the question now is how much we will return to the people.

Republicans have proposed a clean-and-simple $1 billion cut in this year’s property taxes – enough to bring state property taxes back down to last year’s levels. But Democrats hold narrow majorities in the House and Senate, and they want to spend a greater portion of this windfall on new programs.

In the Senate, they have proposed a $430 million reduction that won’t take effect until next year, when the crisis has passed. The House proposal misses the mark even further. It would provide nearly $1 billion in relief, but far too late, in 2019 and 2020 – and all of it would be drained from the state’s Rainy Day Fund, leaving the state vulnerable to financial emergency. To make matters worse, the House also proposes a new income tax on capital gains to provide further reductions in property taxes after 2020 – solving a problem that won’t exist at that point, and paving the way for a general statewide income tax.

The property-tax spike is a one-year problem. Our new school-financing system will replace local levies for basic education with a flat-rate state levy. This will eliminate inequities that shortchanged Eastern Washington school districts and provided greater resources to Seattle and other wealthy areas. By the time this system is fully implemented in 2019, 73 percent of Washington residents will see lower taxes, including nearly all of Eastern Washington.

Unfortunately, the Legislature didn’t have the money last year to do everything at once. We allowed local basic-education levies to continue one more year, in 2018, while the state levy was increased. This is the biggest reason for this year’s property tax increases – as much as 31 percent in some King County communities, where a new transit tax also is a factor. We see the same effect here – in the Kennewick School District, for example, state and local property taxes for education totaled $5.56 per $1,000 of assessed value last year, and $6.56 this year. But next year, all things remaining equal, the maximum rate would be $4.67, and could be less.

The Legislature caused this problem. Now it has the money to fix it – and fix it this year. We need to put the people first, and make property tax relief a top priority.

Sen. Maureen Walsh, R-Walla Walla, represents the 16th Legislative District.