747 Is No More

In response to the state Supreme Court’s decision overturning I-747, Gov. Chris Gregoire sent the following statement:

“I know that voters must be disappointed by the court decision to overturn I-747. As we know, voters approved I-747 by a wide margin in 2001.

“As Governor, I am asking the state, counties, cities and all other taxing districts to assure me that they will not increase property tax levies for their upcoming budgets as a result of the court decision. In addition, I will be asking the Legislature, in January, to work with me to thoughtfully reinstate a property tax cap.

“We heard loud and clear on Tuesday evening that voters are concerned about their tax burden. I believe that it is our responsibility to move quickly, recognizing taxpayers’ concerns and reinstating the will of the voters. “

Joe Turner from the News Tribune in Tacoma points out that “a cap” doesn’t mean the governor wants “a 1 percent cap.”

One of the things I asked Eyman this morning is the Legislature responds with anything other than the exact limits of 747, would he then launch a new initiative for 2008. Eyman answered:

“Sure, but it will only be more restrictive.”

He said legislators and others who want something higher don’t get that the 1 percent cap is the compromise position. He said there are a lot of taxpayers who want property tax reductions and local government types who want more than 6 percent per year.

All this stems from the State Supreme Court agreed with a lower court decision that Initiative 747, which limited local government property tax increases to 1 percent plus new construction, was unconstitutional.

The 5-4 decision means local governments can, if they’ve got the political guts/nerve to do it, increase property taxes by 6 percent next year. Tim Eyman, who authored the initiative, said they also could go back all the years the 1 percent law was in place and collect the 5 percent for each year they didn’t get while an unconstitutional law was in place.

I spoke to several legislators. Eyman said House Speaker Frank Chopp, D-Seattle, is the only one who matters and he believes Chopp will get the limits of 747 back into law.

State Rep. Sherry Appleton, D-Poulsbo, said she hopes the Legislature doesn’t jump in as the “hero” on this the way it did when Initiative 695, which reduced car tab fees to $30, was ruled unconstitutional.

“What my hope is that the Legislature won’t just jump in without thinking about it,” she said.

She said the court’s decision was good for cities and counties, “because they’ve been suffering with that 1 percent limit.

She acknowledged that with the governor up for re-election and with her party so far in control in the Legislature, the party would be risking their political lives by doing anything other than taking its own action to reinstate the 1 percent standard.

“That’s true. Part of why people are elected is to show courage and leadership,” she said. “This is one time where we have to be very careful. I don’t think it’s an easy thing to do.”

State Sen. Derek Kilmer, D-Gig Harbor, said he would support legislation that would put 747’s limits back in place.

“There is a legitimate concern about property taxes and I’m sensitive to make sure that people who’ve worked hard and play by the rules don’t get taxed out of their homes,” Kilmer said.

The senator said state legislators can help local governments at the same time by “not jamming” them with new rules without giving them the means to enforce them. ”If there’s a proposal before the legislature that we want local government to do something, it should be important that we provide the funding to do it,” he said.

Bremerton City Councilman Will Maupin said he doesn’t think the decision will have any impact on his city’s 2008 budget process. The council has on its agenda Wednesday a resolution to set the 2008 property tax levy in accordance with 747.

“I would be very surprised at this point that we would want to do anything different than that,” he said.

He said the news probably arrived too close to the city’s budget deadlines. “Besides that, we just got a clear message from the people that they’re really unhappy with their tax situation,” he said.

Bremerton voters Tuesday overwhelmingly turned down the city’s request for a property tax hike to beef up park improvements. “With the mood people are in right now I don’t see us doing anything other than the 1 percent increase,” he said.

In an e-mail Eyman sent this morning, he wrote:

“We’re in for absolute chaos. For six years, local governments (counties, cities, ports, library districts, fire districts, cemetary districts, parks districts, etc.) have been held to a 1% levy each year. Since I-747 no longer exists, local governments now suddenly have the unused taxing authority that they’ve accumulated over the past six years (5% per year — 6% instead of 1%). That means that each local government now has the power to jack up property taxes 30% this fall without a vote of the people (I-747 required voter approval — now that I-747 is overturned, voter approval is no longer be required). Every local government knows that if they don’t take advantage of the situation and unilaterally increase taxes using this unused taxing authority, the Legislature in 2008 might take that authority away.”

I also got comments from State Reps. Christine Rolfes and Kathy Haigh, who both like the 1 percent cap, state Sen. Phil Rockefeller, who is open to some wiggle room in whatever happens in Olympia and Bremerton Mayor Cary Bozeman. I’ll post those later and will continue to update this entry.