Last November voters approved I-960 to require a two-thirds legislative vote to raise taxes and simultaneously approved making it easier to pass school levies. When the Supreme Court ruled I-747 unconstitutional, the governor called a special session and in one day, the legislature passed a measure to reinstate the 1 percent cap on general property tax levies, citing “the will of the people.”
At the start of a new year and a new legislative session, how should we read the tea leaves to understand what Washingtonians are thinking about taxes and the role of government?
First, voters like the idea of more accountability from government. Unfortunately, they bought Tim Eyman’s glib fib that I-960 would provide it, and voted to hand a small legislative minority virtual veto power over key spending provisions. Voters showed greater common sense when they endorsed a simple majority for school levies. The disconnect between the two votes indicates that the electorate was more attracted to accountability claims for I-960 than to its practical effects.
The public also is concerned about property taxes. Overall, property tax growth has been modest in Washington state. Some voters who can reasonably afford it do complain about their property tax bill. They need to be reminded of the many ways they benefit from the public goods and services those dollars help provide. But the reality is that individual bills can still be too high for some, and low and moderate income homeowners are not protected from property tax bills that are beyond their means.
As for “the will of the people” to cap property tax levies, let’s remember that it was a small majority of the low number who voted in an off-year election, in 2001, to approve I-747. Since then we’ve learned that it systematically underfunds local services like fire departments, EMS, libraries, and parks by setting the cap at less than inflation. We’ve also realized that I-747 does nothing to address the real inequity in the property tax system: the wealthiest pay less than 3 percent of household income in property taxes, while the least well-off homeowners (the bottom 40 percent) pay twice that or more.
When it comes to taxes, we need real reform that makes the system more fair – but also assures that it generates enough revenue to fund important services.
Just as real circuit breakers protect a home from electrical overload, a tax circuit breaker would limit property taxes to a reasonable percentage of household income. The Washington State Budget & Policy Center has a proposal that would make the system more equitable and provide, in the tangible form of a check in the mail, a 12-15 percent property tax rebate for the least affluent 40 percent of homeowners. Wealthy households would see a small increase in property taxes, which is appropriate given the low percentage of household income they currently pay, and their ability to pay.
Creating a new Working Families Credit would begin to address the broader inequity in our state’s tax system as a whole. Low-income families currently pay 17 percent of their household income in combined state and local taxes — five times more than the wealthiest households pay. Washington State should join 23 other states and create an easy to obtain, refundable tax credit for working families. It would give lowerincome families an economic boost and help to balance out the higher share of income they pay in sales and gas taxes. One in eight tax filers would be eligible. Like the circuit breaker, the Working Families Credit would be tangible evidence of government’s commitment to start balancing the tax scales.
If the public doesn’t hear about ideas like these, they will vote for the next shortsighted, slash-and-burn proposal. Voters want real solutions, but they’ll support a bad idea over no idea. If elected officials don’t take the lead with good ideas, voters are likely to continue passing harmful initiatives — especially when the consequences come in the form of deteriorating parks, shortened library hours, and longer waits for EMS.
Washingtonians value publicly funded services and are aware of the need for additional investment in key sectors like public transit, education, health and long-term care, affordable housing and the environment, but there are limits to how much low and moderate-income families can be expected to contribute. Passing a circuit breaker and a Working Families Credit are two steps elected officials can take to demonstrate in a visible way that government can act to make the tax system fairer, while maintaining adequate funding.
Sign up at http://www.wataxfairness.org to get more details on both proposals and find out how you can help move these and other innovative ideas! |
