Senate Republicans: WA property taxes will skyrocket under bill to remove annual cap

Senate Republicans are opposing Senate Bill 5798, warning it could sharply increase Washington property taxes by removing the long-standing 1% cap. — Thursday (April 9) press conference by Senate GOP in opposition to SB 5978 to increase property taxes. Photo courtesy Carleen Johnson

Senate Bill 5798 removes the existing 1% cap, allowing for potential increases based on inflation and population growth

Carleen Johnson
The Center Square Washington

A year after Senate Democrats promoted – and then abandoned under intense pressure – property tax hike legislation, they are back this session with Senate Bill 5798 that removes the existing 1% cap, allowing for potential increases based on inflation and population growth.

The Senate Republican Caucus expressed opposition to SB 5798 at a Wednesday morning news conference.

“In 2001, voters through Initiative 747 put in place a 1% cap on property taxes, so it’s been in place for more than 20 years,” Minority Leader Sen. John Braun, R-Centralia, said. “In 2007, a judge ruled it unconstitutional, and the governor called a special session, and the Legislature in a bipartisan manner put that 1% back in place, and it’s been in place for a long time now.”

Braun was critical of the bill’s removal of the annual 1% cap in favor of a formula based on inflation and population growth.

“It’s only going to be bound by inflation and population growth, and in recent years, that would amount to about 4-and-a-half percent but can be as high as, a few years back, when it was about 10%,” he said. “Drill down to the individual property owner, and you take the conservative estimate in the fiscal note, and it amounts to about $1,000 per year for an average home, but more realistically, it’s about $2,000 per year.”

Braun concluded, “Property owners have to pass on their costs to renters or they can’t survive, so whether you are a homeowner or renter, imagine how you’re going to handle an additional $2,000 a year.”

Sen. Keith Goehner, R-Goehner, pointed out that higher property taxes will make it more difficult for first-time home buyers to enter the market.

“It will impact home sale prices and the ability for people to get into a home,” he said, noting financing will be a greater challenge with rising home prices and escalating property taxes.

Sue Wise, a local realtor, said skyrocketing property taxes will crush prospective clients.

“There’s a lot of people who have been scrambling to buy a house, and some have been successful,” she said. “Now that they’ve gotten in comes the question: will they be able to keep their house?”

Gina Carlson with Olympia Master Builders said the bill should be a concern for everybody.

“It’s a nonpartisan disaster,” she observed. “People being driven out of their homes and out of this state. I find it incomprehensible that something like this can even be brought to the table.”

During a later Wednesday media availability event, Democratic leadership was asked about potential property tax hikes.

“We are obviously very sensitive to making sure people aren’t priced out of their homes,” Senate Majority Leader Jamie Pedersen, D-Seattle, said, noting that SB 5798 includes a property tax credit for low-income seniors and disabled veterans.

Pedersen questioned the numbers given by Senate Republicans at their news conference.

“I would be very surprised, even if on very expensive houses like in Sen. Dhingra’s and my district [Seattle], that property taxes would go up $1,000,” he said.

Pedersen noted that the vast majority of people’s property taxes come from local taxes and levies, such as fire districts and locally approved school measures, which will not be impacted by the bill.

The Center Square asked Braun about the likelihood of Republicans stopping SB 5798.

“It’s entirely possible,” he said. “This is the third year we’ve fought this, and each year, including this year, you see the stack of people who signed in against this.”

When the bill received a hearing in the Senate Ways & Means Committee on March 31, more than 43,000 people signed in to oppose it, the highest number of sign-ins for any bill in the history of the Legislature.

“The people of the state of Washington have spoken up and said no, this is wrong,” Braun observed.

Meanwhile, the other chamber is considering its own version of a property tax hike in the form of House Bill 2049, which aims to increase the state and local property tax growth limit, potentially raising the cap from 1% to 3%, to address funding for K-12 education and community safety.

Asked if Gov. Bob Ferguson has tipped his hand one way or the other on the property tax proposals, Braun answered, “He hasn’t committed himself anymore in private than he has in public. I would like to think that he understands the regressive nature of the property tax and what that will do to people across our state, but he has not committed himself yet; I wish he would.”

This report was first published by The Center Square Washington.