In 2001 Washington voters approved Tim Eyman’s initiative 747. It limited annual property tax increases to 1%. After the state Supreme Court ruled the measure unconstitutional, the legislature approved a revised version in 2007 and then-Governor Gregoire signed it.
In Lincoln County, farming country west of Spokane, the limitation initially wasn’t a big factor, says Commissioner Scott Hutsell. With the help of increased sales taxes and new construction, the county could raise enough money to provide services. And then the Great Recession hit and the downward budget slide began.
“It started out slow," Hutsell said. "It was like you were down $20,000 the first year and then $40,000 and then $80,000. And now, that gap has been widening and widening.”
It’s not to the point where the county has to declare bankruptcy or anything that drastic. But Hutsell says the trend is not a sustainable one.
“I explained to someone the other day we were going to get $33,700 more than we did in 2016. But just our risk insurance, the insurance we pay for, vehicles, liability, our buildings and stuff, it went up $40,000,” he said.
Hutsell supports identical bills, one in the House, one in the Senate, that would replace the 1% annual property tax limitation with increases tied to inflation and local populations. And so does Nanette Konishi, mayor of Rosalia, a town of about 600 in northern Whitman County, about halfway between Spokane and Pullman, She says the town’s budget is fine. But its deteriorating infrastructure is not.
“One of the big mistakes that was made in years past is we had a lot of really good people on councils who just didn’t want to burden their constituents with new taxes and new increased rates on things like water and sewer,” Konishi said.
That means the town has fallen behind on replacing on things like old water lines. She says raising property taxes by more than 1% a year won’t bring a lot of new money to Rosalia, but it would provide enough certainty to allow the town council to plan ahead and do things like fixing infrastructure.
“We’ve got a city full of old buildings that are valuable to us because of their history, but maintaining them isn’t inexpensive,” she said.
She will be paying attention to the progress of the two bills. Past attempts in the legislature to change the 1% limit have failed. But a group of legislators is trying again, with the blessing of people like Konishi and Hutsell. The first bill will get a hearing this morning in the House Finance Committee.