Solving a dilemma of their creation | Cornfield

Funny how things change around here in the turn of a calendar year.

Back on Feb. 16, 2017, I wrote, “This may surprise you, but one thing legislative leaders and the governor agree on is that new taxes are needed to help cover the state’s unpaid tab for public schools.”

Now, 370 days later, the one thing Democratic and Republican lawmakers agree on is the need to reduce the very tax they wound up increasing.

We’re talking about the property tax. Last June, at the end of a gnarly session, lawmakers and Gov. Jay Inslee boosted the state’s portion of the rate by 30 percent to a flat $2.70 per $1,000 of assessed value. It marked the largest one-time rate increase in state history.

Since then, Washington’s fit economy seems to have gone on steroids. Monthly tax collections are exceeding forecasts by tens of millions of dollars. Much of this extra revenue is being deposited in reserves that can’t be touched unless a super majority of the Legislature votes to do so.

Which brings us to the present, where lawmakers are literally tripping over one another with schemes to use those reserves to roll back the whopping hike they bravely imposed without a public vote.

Republicans want to do something this year for property owners shocked, horrified and enraged by what they saw when their tax bills arrived.

Do not count on them succeeding.

First, it’s a Republican idea, and members of the Grand Old Party are in the minority in the House and the Senate.

And it’s not simple to do. Some pay their taxes through their mortgage, others write one check in April, and still others pay it in installments in April and October. The state Department of Revenue and county assessors would need to sort out how to handle each situation.

With only two weeks left in the legislative session, easy is the route the majority party will travel.

Democrats in both the House and Senate want to lower the rate at least in 2019 to somewhere around $2.37 per $1,000 of assessed value. They would buy it down by pulling roughly $400 million from restricted reserves, which is about 25 percent of what is expected to be available in this budget cycle.

But House Democrats want to reset the bar at a lower rate permanently. Their budget extracts $1 billion in reserves to bring it down in 2019 and 2020. Then they want to enact a tax on capital gains and use this stream of revenue to offset the need to allow the property tax rate to return to the current levels.

Getting enough Republican votes to access the reserves for one year of relief shouldn’t be extraordinarily tough. Doing it for two years will be a harder sell though not impossible. It is an election year, and it is hard to imagine many lawmakers in either party want to hit the campaign trail without having done something.

Capital gains is another story. Even if it passes in the House, Republicans and probably some moderate Democrats in the Senate are not likely to embrace it given all the dough piling up in state coffers.

But who knows. No one envisioned that months after their grueling negotiations on increasing the property tax, lawmakers would be debating the best means of bringing it down.

Political columnist Jerry Cornfield can be reached at 360-352-8623, jcornfield@heraldnet.com and on Twitter @dospueblos.

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