Tim Eyman’s Initiative 1033 claims to be helping “struggling working families and fixed income senior citizens” pay their property taxes. Instead it is a wealth transfer scheme that takes sales taxes and other fees and uses them to only pay property taxes. It results in a tax shift putting even more of the tax burden on lower and middle income taxpayers.
Eyman claims I-1033 is the only constitutional way to reduce property taxes. Forget of course that property taxes are already limited by the Washington State Legislature enacting I-747 which the Washington State Supreme Court overturned. That limits overall property tax collections, except voter approved levies, to 1% per year. Also the Washington State Constitution limits the tax per property to 1% of its valuation per year.
Also forget that the conservative Tax Foundation in comparing all states for property tax burden found that Washington State ranked right in the middle at 25 out of 50 states.
To the constitutional issue, Tim as usual is only telling you part of the story. The Legislature has the power to provide special property tax exemptions and has done so for low income seniors and disabled people.
If Tim was concerned about seniors staying in their homes he would increase the Property Tax Exemption for seniors and the disabled and extend it to all taxpayers. It has an income threshold so that people that can afford to pay property taxes do and those that are on limited or fixed income can get help. The current senior exemption is a form of Homestead Exemption in that it covers only one’s principal residence.
This makes sense as there is no reason to give people a property tax break if they can afford a second home or vacation home or investment properties. Initiative 1033 takes the opposite approach in covering all real estate so that the more property you own, the larger your tax rebate.
Tim Eyman has said repeatedly that Homestead Exemptions and circuit breaker legislation are unconstitutional. That doesn’t make it so. It might be true if he wrote the legislation like the many initiatives of his that have been overturned by the Washington State Supreme Court.
However like everything else, there are ways to draft legislation that would pass constitutional muster. The key is that the Washington State Constitution says all classes of property must be taxed the same, meaning commercial and residential property get the same tax breaks. Most other states do not treat commercial and residential property the same.
Here’s one example of a solution that addresses this issue of constitutionality that would benefit both homeowners on their principal residence and small business owners. In the 2008 Legislative session HB 3162 was introduced with 24 sponsors. HR 3162 – Providing a property tax exemption for the first fifty thousand dollars of assessed value of commercial and residential real property.
The bill is short and the main text of interest here is:
“(1) Residential property is exempt from the state portion of the
property tax on fifty thousand dollars of assessed value.
(2) A commercial property owner may apply to the county assessor to
exempt fifty thousand dollars of assessed value for the state portion
of the property tax for a single parcel of property.”
Realize Tim is not looking for solutions to just help those most in need with their property taxes, he is trying to get voters to freeze state spending and spending by all 281 cities and 39 counties in the state and is using his property tax reduction scheme to get you to also swallow his freeze on public services by freezing spending at the current recession level. He is also not looking to help those less well off as he has opposed expanding the Homestead Exemption in Olympia.
Eyman’s property tax rebate scheme is the fatal flaw in I-1033 that should help defeat Initiative 1033. It takes sales tax dollars and other fees paid by everyone and gives it to just property owners. If you don’t own property you get nothing. You will still pay the same taxes as before. It is a tax shift that hurts low and middle income taxpayers, while greatly benefiting wealthy property owners.
It just is plain wrong to tax people that have no property and use those taxes to pay taxes for wealthy property owners, like those who have vacation homes or shopping malls or real estate developers or corporate owners. This is a reverse Robin Hood scheme – tax the less well off and use the taxes to pay property taxes for the rich.
Initiative 1033 is a just another poorly thought out Eyman scheme that will hurt those who have the least while benefiting the wealthy. Vote No on I-1033.