Initiative 747 is Trimming Back Property Tax Increases
2002 - 09
Initiative 747 is the latest property tax limitation law enacted by the people of Washington. The measure passed in November 2001, receiving 57.5% of the popular vote, gaining a majority in every county except King and Whitman. It requires the state and local governments to limit increases in their regular property tax collections to 1% a year, unless voters approve a larger increase. Under certain conditions, local officials can also tap other taxing authority to impose larger tax hikes.
Washington Policy Center has completed a statewide survey of all 39 counties and 22 major cities to see how effective Initiative 747 has been in restraining tax increases. We published the findings in a new Policy Brief, "An Assessment of Initiative 747 Property Tax Limitation." The results of the study are summarized here.
At the state level, Initiative 747 is saving Washington residents $50.8 million in 2002, compared to the amount of increase that would have been imposed under the old law. These tax savings will grow dramatically in future years, as annual tax increases level off compared to what they would have been under previous law.
At the local level, our research finds Initiative 747 is saving Washington taxpayers millions more. Survey results show that 34, or 87%, of counties, adopted increases of 1% or less in their regular property tax collections for 2002. Twelve of these counties adopted zero increases, holding the tax burden flat from 2001 to 2002. This is the highest number of counties to adopt a zero increase since we began conducting tax surveys five years ago.
Holding tax collections flat or nearly so results in a tax cut for many property owners, as the limited tax burden is spread among a growing tax base.
Five counties exceeded the 1% limit. Officials in Clallam and King counties chose increases of 1.59% and 1.47% respectively, higher than the Initiative 747 limit, but below the inflation rate for this year.
Adams and Mason counties adopted increases of 3.34% and 5% respectively. While these tax increases are well above 1%, they are low by traditional standards. They indicate how much the budget culture in county government has changed over the last five years.
San Juan County stands out in adopting a 17% increase, the highest of any county, by drawing on banked taxing authority it reserved in past years.
In most of the state Initiative 747 is working as voters intended. The reasons for its success are two-fold. First, the measure itself does not provide much maneuvering room, reflecting the distrust many citizens feel toward local officials. Second, Initiative 747 is only the latest in a series of messages voters have sent through the ballot box in recent years. Each time a measure to reduce taxes or limit their growth has appeared on the ballot it has passed. Initiative 747 is changing the culture of public spending in most counties and major cities, resulting in significant tax savings for the people of Washington state.
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