Tax scheme sneaky and maybe permanent
June 12, 2008 · Updated 4:18 PM
Editors at The Seattle Times called it a sneaky tax that silently does its work in collecting more property taxes.
Down in Vancouver, editors of The Columbian wrote, Is it too much to ask (that voters be told what they need to know about a proposed tax)?
No, they were not writing about the way the Port of Bremerton quietly evaded the voters right to put the port districts new property tax on the ballot.
Instead, the dustup centers on a change made to state law (effective July 22) governing property tax lid lifts and the belated opinion of the Department of Revenue that the new law does not say what the legislators thought it said.
In King County, determining the effect of the new law is important, since voters approved ballot measures which may mean something entirely different from what they meant when the county council adopted them in early May and hardly any voters knew it before casting their votes in August.
It may even be important closer to home, since Bremertons city council adopted a ballot measure by resolution on Aug. 8 that its voters will approve or reject at this years general election.
Bremertons ballot measure resembles the type the new law turned upside down.
Previously, a particular kind of lid lift that only cities and counties could propose was of limited duration unless the ballot measure specifically made it a permanent increase in the maximum-authorized levy dollar amount.
The new law gives all taxing districts that can impose regular levies the power to propose this different kind of lid lift, and also makes the increase in the levy lid permanent unless the ballot measure specifically says it is of limited duration.
If we are fortunate, the worst that will happen here in South Kitsap is the addition of more misunderstandings to what some people believe about the way property tax lid lifts work.
We have not yet had any experience with the new kind of lid lift. The fire district lid lift approved by our voters last year was an ordinary temporary lid lift that increases the authorized levy in the first year and allows this increased amount to be used to calculate the allowable levy in the next five years.
Once the six-year duration of the fire districts voter-approved increase in levy authority ends, the districts allowable levy drops down to what it would have been with no lid lift at all.
Such ordinary lid lifts of limited duration should be easy to identify, but the new kind will be a little harder not because they are inherently sneaky or bad, but because the ballot measures and ballot titles may not be written clearly.
Unless the legislature confuses matters even more while trying to adjust the law during the next session, the new kind of lid lift should be identifiable by looking for two distinct things.
First, see whether the ballot measure states a specific number of years in which the increased levy authority would exist.
A permanent levy lid lift has no limited duration, so only a temporary lift must mention a number of years when it would be in effect.
Second, do not be misled by a completely different statement that mentions a number of consecutive years but refers to levy increases occurring in each of those years.
A voter-approved increase above what is allowed by Initiative 747 in each year of up to six consecutive years is what the new law allows.
If there would be such an increase in each year, then the lid lift under the new law is permanent unless the ballot measure specifically says otherwise.
If the people who draft the ballot measures and the ballot titles do their jobs competently, we may be able to focus on the merits of future lid lift propositions rather than worry about whether they are permanent or temporary.
The authority to make smaller annual increases over a period of up to six years, rather than one big increase in the first year of the six, is what should make the new law attractive to both the tax payers and the taxing districts.
Most of us despise having a big jump in our tax bill from one year to the next, since it is harder to fit the increase into our budgets.
Yet, the ordinary lid lift whether permanent or temporary requires a bigger increase in the first year, since the levy lid in subsequent years would increase by only the amount allowed under I-747.
If voters agree that total revenue is not keeping up with increased costs, the new law would allow them to approve a slightly higher limit on annual levy increases to catch up with rising costs for a few years.
And, if voters become dissatisfied, they can simply reject the next proposition and force government to get by on the smaller annual increases allowed without voter approval under I-747.
Robert Meadows is a Port Orchard resident.