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Property tax well in danger of running dry

Feb 5, 2016, 3:00am PST written by John Wilson

Like many of you, I vote for taxes to support our schools, low-income housing, libraries and parks and other important public services. As a Seattle resident I want our community to have properly funded public services.

Now that I’m the new King County Assessor, I wear another hat. And I am concerned about our growing reliance on the property tax to pay for these and other vital public services.

In short, I ask how much longer can we go to the well of voter/taxpayer-support for the services we value as important and necessary for our way of life? Put another way, at some point are we placing at risk one or more critical public services by a levy failure because we asked once too often for a jump in property taxes.

There’s some history for this. Back in the late 1970s, voters twice rejected levies for Seattle Public schools. The results were disastrous: laid off teachers, school closures and overcrowded classrooms.

Another risk to over-reliance on the property tax is the problem of affordable housing, and pricing small businesses out of their locations as rents go up to reflect higher taxes passed on by landlords. Economists likely would tell us that taxpayer support for continued special levies is inelastic, that it won’t last forever.

The problem is we don’t know where that tolerance limit is because no one is asking the question. I suggest it is time we do just that: organize a community-wide effort to study of how far we can go depending on property taxes to finance our public services.

The first step would be to educate citizens about the real impacts of our tax system with an emphasis on property taxes. A key part of this would be to consult with a diverse group of leaders (civic, labor, business and public officials) from across the community to help shape the discussion.

Meantime, we have some projects under way in the Department of Assessments to provide more information about the specifics of what taxes people pay. We are mounting an aggressive outreach effort to inform and register older homeowners about the senior property tax exemption.

Recent voter-approved levies in Seattle for parks and transportation will be reflected on tax bills, a significant hit for low-income seniors still in their homes. And we are working hard at the State Capitol to gain passage of a bill to establish an Affordable Housing Tax Exemption to help renters earning no more than 80 percent of area medium income.

To examine whether we can continue to rely on property taxes should not be mistaken for opposition. Washington State has a complicated and largely regressive tax system. Nevertheless, public officials and citizens alike must work within it. We have relied on property taxes to pay for a mix of our needs and wants. Fair enough.

Will this continue to be sensible and pragmatic policy? If not, we should know that — now.