POSSIBLE SOLUTIONS

FOR

OUR BROKEN SYSTEM

AND

UNWISE LEGISLATION THAT PERPETUATES OUR PROPERTY TAX PROBLEMS

If you have other solutions to propose, please email us

According to the Washington Policy Center, (a non-partisan, free-market state-based think tank educating citizens on public policy issues facing Washington state), state spending, 25% of the yearly property tax bill, is up 32% over the last four years. "A modest permanent tax cut "would provide fair, broad-based relief to every Washington property owner...stimulate the economy...and give lawmakers the opportunity to rebuild trust with the public." The WPC also suggests phasing out the state property tax over five years. "Tax money to the state treasury is increasing well beyond population growth plus inflation each year. "This would protect taxpayers while maintaining ample revenue to pay for public services."

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THE ANSWER IS TAX CUTS - LOCAL DISTRICTS SPENDING LESS

Controlling increases in property values does not control property tax increases.

Property values do not determine the total tax a taxing jurisdiction levies against a community.

Instead, local officials decide the total amount of money they want to collect from property owners (i.e. $50 million in 2008), then the county assessor partitions this amount among property owners based on valuations. Thus, property values could go down -and taxes would still go up - if local officials still decided they want to collect more money from property owners.

The best way to protect homeowners from high property taxes is for local officials to cut the property tax. It's that simple.

Local officials taking less money from all homeowners means that all homeowners would get a tax cut. Only properties that rose in value much faster than their neighbors’ would pay a bigger tax bill, as a larger share of a declining tax burden is shifted to them. But that also means owners whose property values rose more slowly would see an even bigger tax cut.

The key is not valuations, it's reducing the amount of tax local officials take from us in the first place.

Concern over valuations conveniently distracts the public's attention AWAY from local officials who are increasing property tax every year. Local officials do nothing to explain how the system really works - if homeowners get mad at the assessor, that's fine with them. Instead, if the public ignored the obscure mechanics of how taxes are set and simply sent a clear and consistent message to local elected officials: "Cut my property tax!" officials would figure out a way to do it, and the answer would have everything to do with policy decisions made in council chambers and nothing to do with natural changes in market value.

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Fifty percent of property tax bills go to fund education, creating animosity for school levy legislation Finding other sources to fund education, perhaps a combination of property tax and specifically earmarked sales taxes (sale tax would also capture tourist/visitor dollars) or revising Washington's Lottery.

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Freezing property values.

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THINK TWICE ABOUT CREATING LEGISLATION
THAT PERPETUATES OUR PROPERTY TAX PROBLEMS
DON'T PASS UNWISE LEGISLATION

WHAT DOESN'T WORK

Although deferments and exemptions are in use and give some relief, these bandaids are problematic.

Exemptions pass on the exempted property taxes to all other property owners.

Passing exemptions, homestead exemptions, circuit breakers or deferrals requires monitoring of taxpayer incomes and adds layers of bureaucracy to administrate - which translates into additional costs to property taxpayers.

Passing more “do nothing” legislation such as deferrals - "do nothing" because homeowners rarely take advantage of them - requires the homeowner to pay interest to the state in addition to the state placing a lien on the deferred property. In many instances, a deferral acts as a reverse mortgage which most financial advisers advise against.