The state Supreme Court killed off Tim Eyman’s Initiative 747 last week. The move was highly controversial and came on a 5-4 vote, but the end result is the same: I-747 is dead.
That initiative limited local taxing districts, such as counties, cities and fire districts, to a maximum 1 percent annual property tax increase without a vote of the people. Now that the Supreme Court has ruled that limit out, jurisdictions are free once again to raise taxes up to 6 percent without a plebiscite. Referendum 47, which I-747 supplanted, is now the law again. It caps tax increases at the rate of inflation — 2.1 percent for 2008 — but could be increased to 6 percent if two-thirds of the jurisdiction’s governing board agree.
For newcomers to Washington that seems like a lot, but in fact the 6 percent limitation was meant to keep taxes down. It was imposed during a era when inflation was running 12 percent annually and property tax increases were skyrocketing.
Politicians didn’t waste any time reacting to the Supreme Court ruling. A quick finger into the political winds showed that the people were against the decision and wanted to retain the 1 percent limit. Even Gov. Chris Gregoire, not known for her thrifty ways, called on the Legislature to reinstate the limit.
The fact is, the 1 percent limit doesn’t make sense in inflationary times such as these. How are local governments supposed to operate, when costs are going up three or four times that fast? Employee wage increases take up more than the added tax revenues every year. The answer, in Island County at least, has been for local governments to promote growth. More houses and businesses mean more tax dollars, but the side effect is more harm to the environment and the erosion of our cherished rural lifestyle.
What has never been tried in these parts is following the I-747 rules and asking voters for more money to keep up with inflation. Political leaders obviously think this is impossible, but they shouldn’t be so sure. What I-747 really said was “trust the voters.” Try it some time, you might be surprised.
