d-
BB-

What happens if you dont get a relatively modest tax rollback like Eyman is suggesting, and get something even more Draconian?

717 Full text 1/7/00 Gerald D. Schaefer 508 Carl Way Aberdeen, WA 98520 360/533-4632 Shall the state property tax levy be reduced by 15% and then phased out, additional levy limits be imposed, and certain homeowner tax deferrals provided? Ballot Measure Summary: This measure would reduce the 2001 state property tax levy by 15%. The emergency reserve fund would be revised and unobligated revenue made available for gradual elimination of the state property tax levy. No increases in the state levy would be permitted. Local property tax increases would be limited to the inflation rate, except with voter approval. The duration and frequency of levies would be further limited. Financially eligible homeowners could defer property tax payments. -----------------------------

According to the Everett Herald, this may make it to the ballor box.


-- Craig Carson (craigcar@crosswinds.net), July 06, 2000

Answers

Craig:

On the whole, this seems to be a much more reasonable approach. I have not studied this one in detail but this is actually not a bad proposal, and one that I believe was considered by the Legislature. It was proposed by Republicans, and could not overcome the Democratic control of the Senate and the split in the House. The difference is that the state levy it cuts is actually revenue of the state, and does not define the state to include every other government within the state.

The state property tax levy they are talking about is the state levy that used to be considered the source of the state school funding. It is no longer tied to the schools, and the state has more revenue than they need from this and other sources to pay the amount they are required to pay for each student.

So this proposal would SUBSTANTIALLY reduce the property tax paid by each property owner, since the state levy is $3.60/1000 and would be entirely phased out and the average levy rate is about $14.00 it would be a 25% tax reduction - and the best part is no local services get cut at all.

This provision, "Local property tax increases would be limited to the inflation rate, except with voter approval. The duration and frequency of levies would be further limited." is actually much more reasonable than I-722, since it puts the control on the levy amount rather than the taxable value. Local governments can deal with that one, and local voters can approve increases if they want to. I-722 would actually make the taxing authority unavailable to the local government even with voter approval for the regular levy needed for ongoing operating costs, by reducing the taxable value below the real market value.

If this is going to the ballot, it may be seen as an alternative to the Eyman proposal and get the endorsements of all the "good government" groups.

-- dbvz (dbvz@wa.freei.net), July 06, 2000.

Craig,

While cutting all of the state property tax might not be the best idea in the world, because relying almost entirely on sales tax is relatively dangerous (due to fluctuations in the economy), this is the right way to do it. Over a period of years, so that government can adjust gradually, as opposed to the middle of a biannual budget cycle a la 695. Plus, this initiative hits only the state.

722, on the other hand, plays on the resentment of people towards the state government, but has its biggest impact on local taxation districts that are funded entirely by property taxes.

-- BB (bbquax@hotmail.com), July 06, 2000.

I went to the 717 website (www.yeson717.com), and although I have no objection to lowering property taxes, I did not agree with all that I read on their various web pages.

With regards to the state surplus, they make the claim that the highest priority is lowering property taxes.

I disagree. The highest priority should be the elimination of the gasoline tax. The next highest priority should be the elimination of sales taxes on prescription drugs.

Another priority would be to use the surplus to help finance a parallel network of tolled roads. Conceivably, this might increase the surplus, as the tolled roads might even be profitable.

-- Matthew M. Warren (mattinsky@msn.com), July 07, 2000.

Matt wrote: "I went to the 717 website (www.yeson717.com), and although I have no objection to lowering property taxes, I did not agree with all that I read on their various web pages."

Did you expect to? I don't agree with everything either, but it is still a bettor proposal than 722.

-- dbvz (dbvz@wa.freei.net), July 07, 2000.

"Did you expect to? I don't agree with everything either, but it is still a bettor proposal than 722. "

Actually, I was thinking of voting for both........

zowie

-- (zowie@hotmail.com), July 07, 2000.

Isn't it a fact that unless we enact a tax refund, that a "tax rollback" is a misnomer given the tax base in the State is expanding. If I have the math right, we could freeze taxes and as long as population of taxpayers increases year over year, government institutions and agencies have a rising revenue stream. If we are going to educate the public, I believe it is important to frame the dynamics of how tax revenues are growing, so that capping tax increases doesn't appear Draconian.

-- Richard Lanzner (rdotcom@elsitio.com), July 08, 2000.

........and then again, maybe not!

zowie

JJJSusan Paynter JSPORTS JBUSINESS JNATION/WORLD JART & LIFE JCOMICS & GAMES JOPINION JCOLUMNISTS JGETAWAYS JNEIGHBORS Sort: dateJrank Query Help Browse by date J Tax-cut initiative backers miss deadline by 4 minutes Saturday, July 8, 2000 By ANGELA GALLOWAY SEATTLE POST-INTELLIGENCER CAPITOL CORRESPONDENT OLYMPIA -- I-5 gridlock appears to have jammed a tax-cut proposal right off the November ballot. Saying they got stuck in traffic, backers of the property tax reduction measure rolled into the Secretary of State's office yesterday four minutes after the deadline for submitting petitions. Initiative sponsors had until 5 p.m. Friday to deliver the 180,000 signatures from registered voters required to get their proposals on the fall ballot. To make up for duplicate and invalid names, most sponsors shoot for more than 200,000. Six campaigns said they turned in well over 200,000 on time. Backers of the property tax measure, Initiative 717, say they, too, had plenty of signatures. But state officials said "no dice." According to the Secretary of State's office, workers locked the door precisely at 5 p.m. State officials said it was 5:04 p.m. when a frustrated and cursing Tim Nank came banging at the door.

-- (zowie@hotmail.com), July 08, 2000.

Zowie,

That looks like bad timing and bad news to me. Having a more reasonable alternative to 722 could have helped defeat it.

Richard,

1. Growth in population results in new construction, and new sales and property taxes etc. - but that is all revenue needed to provide the additional services needed by these new people, homes and businesses. Some areas grow faster than others, and that growth in taxes should be exempt from tax limitations.

2. Inflation in the tax amount collected from the current tax payers of an area needs to be evaluated in terms of constant value dollars. If the buying power and income levels are increasing, taxing at the same dollar amount as last year is an effective revenue cut for local governments. If they can't buy as much service for the public with the same money, they need to cut services, staff, and capabiltiy. The national IPD does not reflect the local increases in the cost of services and the inflation in incomes. The local CPI is closer. So if the tax on existing tax payers does not increas above the local CPI, I don't believe that should be considered a tax increase in terms of constant value dollars.

P.S. Don't try to sell a freeze on taxes with the old "fixed income retiree" excuse. I support tax credits and exemption programs for retirees, but that does not provide a justification for the same treatment for everyone else.

-- dbvz (dbvz@wa.freei.net), July 08, 2000.

d- We've had this discussion before.

If you are talking increases in responsibilities do to increase in population growth, that ought to fund itself through the increase in the tax base caused by more sales and more houses, etc. I'll concede you that one. A constant levy (dollars per thousand) oughjt to yield the additional revenue required for the new people. In the REAL world, where you get economies of scale, you would expect the per unit cost of providing services to come down under these circumstances, actually.

The additional money needed for inflation offsets certainly ought not to require higher tax rates. As inflation occurs, revenues will automatically go up. A 10% annual increase of the value of a dwelling (not uncommon in King County) will automatically yield 10% more money each year, without raising rates, because the assessed valuation goes up. Similarly, a 5% increase in the cost of TVs will generate 5% more dollars in sales tax, even without an increase in the sales tax rate.

You insist on saying that the tax rate also needs to go up. It does not.

Moreover, if you did need to keep increasing the tax rate each year, ultimately no one would have any after tax income, since the total amount you earn is a bounded variable (100%) and your after tax pay (100%-tax%) isn't, if tax% must increase constantly.
Eventually, tax% equals 100% in that scenario.

the craigster


-- (craigcar@crosswinds.net), July 08, 2000.

Craig wrote, "You insist on saying that the tax rate also needs to go up. It does not."

Read my comment again. I said nothing about the tax rate. I am talking about the constant value dollars generated by the rate times the base. If the dollars do not increase more than the CPI (whatever is happening with the rate and the base) it generates the same effective revenue, and should support the same services for the existing population (but not the new additions), and should not be considered a tax increase. That was one of my objections to 695, which defined a tax increase as an increase in the dollars generated OR an increase in the tax rate. In effect it would have required a loss in revenue over time in constant value dollars. I think we actually agree on how it works.

P.S. This is why restrictions on the revenue generated make more sense than artificial adjustments in the taxable value, or other adjustments to the base. From the point of view of the local government, they need some stability in the revenue on a constant value basis. From the point of view of the individual, the issue ought to be the equity of the distribution of the necessary tax - in other words the accuracy of the values assessed for the property tax, and the equal enforcement of the sales tax on all retail sales for the sales tax, etc.

-- dbvz (dbvz@wa.freei.net), July 10, 2000.

"So if the tax on existing tax payers does not increas above the local CPI, I don't believe that should be considered a tax increase in terms of constant value dollars. " If what you are saying is if the tax monies generated don't increase above last years, adjusted for the CPI, we agree. If what you are saying is that if the INCREASE in tax rates doesn't exceed the CPI, we do NOT agree.

the craigster

-- (craigcar@crosswinds.net), July 10, 2000.

Craig,

We agree.

-- dbvz (dbvz@wa.freei.net), July 10, 2000.