How does the court ruling affect me?
Seattle Times staff reporters
In a decision that could affect every property owner in Washington, the state Supreme Court today struck down voter-approved Initiative 747.
Here are the answers to some frequently asked questions:
Q: 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. Those voter-approved levies are the chief reason property-tax bills are going up, King County Assessor Scott Noble has said.
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 court strike down I-747?
A: A 5-4 majority of the court 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.
Q: Will my property taxes now 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 2008 budgets.
Q: Would there be any limits on property taxes?
A: Yes. Referendum 47, which I-747 supplanted, is now 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, 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 the 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.
Noble has said 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 has said.
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 last year, Mike Gowrylow, spokesman for the state Department of Revenue, estimated property taxes in 2006 were about 5 percent lower than they would have been without the initiative.
That assumed every eligible jurisdiction has increased property-tax collections by 1 percent since I-747 passed and that each one would have raised collections the maximum allowed by R-47 otherwise.
