Effects on San Juan County
if Initiative 747 passes
By Bridget Hudson
EDITOR's NOTE: Bridget Hudson is a junior at Friday Harbor High School. She researched this report as part of her internship with County Commissioner Darcie Nielsen.
Under current state law, growth in the property tax portion of state and local government budgets is limited to the rate of inflation, or up to 6 percent. Proposed Initiative 747 would lower this to 1 percent unless voters approve a higher increase. Because inflation consistently averages above 1 percent, I-747 would cut funding to fire districts, cemeteries, hospital and emergency medical services, school districts, libraries, roads, and ports. The Washington Department of Revenue estimates that total state and local funding losses could exceed $1.8 billion for fiscal years 2002 to 2007. Initiative 747 would further destabilize state and local finances and lead to cuts in funding.
Current Washington law has proven effective at restraining property tax growth. The state and many local tax districts have limited levy increases to the level of inflation or lower, and property taxes as a proportion of personal income have fallen over the past 5 years. Proposed Initiative 747 would replace the limits that are now in place with even lower and less flexible ones, capped well below the historical rate of inflation. Under I-747, state and local governments would have to either cut programs or take dozens of costly measures to the people every year. The uncertainty and long term decline in funding would make it very difficult for local governments to plan for and respond to population growth and changing needs.
I interviewed a few people whose jobs would be directly affected if this Initiative were to pass. I talked to the superintendent of the San Juan Island school district, library director, port representative, fire chief, and county assessor. I’ll focus on two of those interviews.
Mr. Enoch, the superintendent of our schools doesn’t like taxes, but knows this isn’t the way to go about extinguishing them. Everything but the core classroom would go, such as drama, hiking club, photography club, and sports. There would be no class trips and the transportation budget would begin to disappear.
I interviewed Lauren Stara; the library director and she told me she was legally prohibited from expressing an opinion on political issues as the library’s director. But I read a brochure about how different programs would be affected by I-747 and it mentioned the loss of revenues would cut hours of operation, the materials budget and children’s reading program, since library districts rely as much as 90% on property tax revenues.
California passed a proposition similar to I-747, as a result their schools dropped from one of the top 10 in the nation to the 35th. California’s plunge can be traced directly to placing excessively stringent financial constraints on educational spending; Proposition 13 limited local property taxes to 1% of assessed value with inflation increases limited to no more than 2% per year.
Overnight, local governments lost 57% of their revenues. A lesson for us should be that the property tax rate must be constantly monitored and adjusted to reflect the ever-changing economy. The California system was too rigid, by dramatically slashing one revenue source for funding, the dominos start falling. A final lesson is that major changes in the funding system require careful study. California’s improper solutions were due to hasty action.
While few citizens want to see essential services cut, the disproportionately high tax burden placed on middle and low income families by Washington’s regressive tax system has led many to support tax cutting initiatives that hobble state and local government. The anti-tax sentiment that fuels support for these types of initiatives will likely remain high until policymakers seriously address the issue of tax regressivity in Washington State.
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