How does rejection of I-747 affect me?
Seattle Times staff reporter
In a decision that could affect every property owner in Washington, King County Superior Court Judge Mary Roberts on Tuesday struck down voter-approved Initiative 747.
Here are the answers to some frequently asked questions:
Q: Just what is Initiative 747?
A: It's a Tim Eyman-sponsored measure, passed by voters in November 2001, that limited property-tax growth to 1 percent a year.
Q: My property taxes went up more than 1 percent this year. Doesn't that violate Initiative 747?
A: No. The 1 percent limit doesn't apply to individual property-tax bills. It's a limit on the annual increase in total regular property-tax collections by the state and local governments.
That 1 percent limit doesn't apply to property taxes approved by voters, which King County Assessor Scott Noble says now account for about 40 percent of the average property-tax bill. Those voter-approved levies are the chief reason property-tax bills are going up, he says.
Q: If voters passed I-747 in 2001, why are the courts just now getting around to ruling on its constitutionality?
A: While many attorneys said the initiative raised constitutional questions, no one formally challenged it until 2005, when Whitman County, one of only two counties in the state that voted against I-747, and several statewide organizations filed a lawsuit against it. (King County also voted against I-747.)
Q: Why did the judge strike down I-747?
A: Roberts said the initiative was deceptive. It purported to amend an earlier, voter-approved Eyman initiative, I-722, that had been ruled unconstitutional before I-747 went to voters. Voters were being asked to amend a nonexistent law, she said.
Q: When does the judge's ruling take effect?
Q: The state Attorney General's Office is defending I-747. Does it plan to appeal?
A: Yes. Attorney General Rob McKenna, a vocal backer of the initiative when he was a King County councilman in 2001, made that announcement Wednesday. His office also said it probably will seek to put Roberts' ruling on hold until the state Supreme Court makes a final decision.
Q: If it stands, how will Roberts' ruling affect the typical homeowner? Will my property taxes be higher?
A: That's possible, although not certain. With I-747 out of the way, local governments would be free to set higher property-tax levies when they adopt their 2007 budgets later this year. But you won't see any impact until you get your 2007 property-tax bill next February.
Q: Would there be any limits on property taxes?
A: Yes. Referendum 47, which I-747 supplanted, would become the law again. That measure, approved by voters in 1997, sets looser limits on annual increases in non-voter-approved property-tax collections. For larger jurisdictions, R-47's cap is the rate of inflation — 2.54 percent this year — but that can be increased to 6 percent if two-thirds of the members of a jurisdiction's governing board agree.
Q: Could governments go back now and collect the property taxes that I-747 prevented them from collecting before Roberts' ruling?
A: No. But the ruling could be retroactive in a sense.
Under state law, cities, counties or other local governments can "bank" unused property-taxing authority. Under I-747, for instance, if a government used only 0.5 percent of the 1 percent increase authorized by the law, it could reserve the remainder and use it the next year.
If Roberts' ruling stands, Noble says, it appears local governments could contend they had banked much more — the difference between their actual increases and the rate of inflation — for each of the past five years. In addition to seeking an increase of up to 6 percent next year, they could attempt to raise property-tax collections by that total "banked" amount as well, he says.
"I'm going to have to recalculate the highest lawful levy for every jurisdiction in the county," Noble said Wednesday. "It could be pretty substantial. ... There's a lot of mathematics that's got to be done."
Q: How much money has I-747 saved the typical homeowner?
A: That's impossible to say. No one knows how much local officials would have raised property taxes without I-747. But Mike Gowrylow, spokesman for the state Department of Revenue, estimated property taxes in 2006 are about 5 percent lower than they would have been without the initiative.
That assumes every eligible jurisdiction has increased property-tax collections by 1 percent since I-747 passed, he said, and that each one would have raised collections the maximum allowed by R-47 otherwise.
Glen Lee, assistant finance director for the city of Seattle, says that if city-imposed property taxes had increased in each of the past five years by the 6 percent maximum allowed before 747, the property-tax bill on the average Seattle home would have been $230 higher this year.
Q: What impact has I-747 had on state and local government finances and services?
A: Again, that's difficult to calculate. But Gowrylow says that, if larger jurisdictions had increased their property-tax collections by the rate of inflation each year, and smaller governments had increased their collections by 6 percent, they would have collected an additional $1.1 billion cumulatively over the past five years.
Kurt Triplett, King County Executive Ron Sims' chief of staff, says I-747 forced the county to trim $137 million from its budget over the past five years, cutting spending on parks, human services and health care.
If Seattle had increased property-tax collections by 6 percent each year, Lee says, it would have an additional $50 million in revenue this year. The city's annual budget is about $768 million.
In the fall of 2001, Seattle's Lee says, the city cut the budget for all departments supported by the general fund by 4 percent. Library hours were reduced. New park openings were delayed. "We took police officers off the street," he says.
But the impact of I-747 can't be separated from the economic tailspin that also contributed to the city's budgetary woes, Lee adds.
Q: What are the state and local governments planning to do as a result of the judge's ruling?
A: Wait to see what happens next.
Eric Pryne: 206-464-2231 or firstname.lastname@example.org
Susan Gilmore: 206-464-2054 or email@example.com
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