Property Tax Relief in Washington
Are the Counties Implementing Referendum 47
1999-08
Two years ago voters overwhelmingly passed Referendum 47, a measure to limit local property tax increases to the rate of inflation (.85% in 1999) unless officials can show a “substantial need” to raise taxes higher.
To assess how well the new reform is working, the Washington Institute Foundation conducted a study of property tax increases at the state level, in the counties and in 21 major cities around the state. This Policy Note examines the study results for the counties.
For our study, we examined whether Washington’s 39 counties implemented the Referendum 47 reform by limiting their increases in property tax collections to inflation (.85%), to the traditional 6% increase, or to some level in between.
Our survey found that 25 (64%) of the counties did not implement Referendum 47’s inflation limitation, representing a 13% increase in the number of counties not applying the limit compared to last year. The overall results are shown in the bar graph on page 2.
This group is almost evenly divided between the 13 counties that increased property tax collections by the maximum-allowed 6% and the 12 that increased collections by a percentage amount falling between .85% and 6%. Elected officials in these counties exceeded the Referendum 47 limit and chose not to follow the level of tax limitation recommended by voters.
The remaining 14 counties (36%) did implement Referendum 47’s inflation limit in setting their increase in property tax collections over the previous year. This represents an 18% decline in the number of counties fully imple-menting Referendum 47 compared to last year.
Eight of these counties adopted the inflation level of .85%, a slight decline from the 10 that adopted the inflation limit last year. The six remaining counties adopted a 0% increase, one more than the five that adopted zero increases last year.
Eleven counties consistently imple-mented the inflation limitation on property tax increases in 1998 and in 1999. In each of the two years the reform has been in place the citizens of these counties have received the full benefit of Referendum 47 property tax limitation. Three of these counties (Garfield, Pend Oreille and Whatcom) did more, holding their property tax increases to 0% both last year and this year, thereby providing maximum tax relief to their citizens.
King County continued a downward trend in the level of increased property taxes it has adopted over the last three years, dropping from a 6% increase in 1997 (before Referendum 47 passed), to 5.08% in 1998, then to 4.5% in 1999. Some King County Council-members pressed for full compliance with Referendum 47’s 1999 inflation limit of .85%. A supermajority of eight members, however, was sufficient to pass an ordinance citing the required “substantial need” to increase tax collections to the higher level.