Chief
09-02-2007, 04:19 PM
http://seattletimes.nwsource.com/html/editorialsopinion/2003862784_levyed02.html
On July 22, this page raised the alarm about Senate Bill 5498, which we said had "silently transformed what have been temporary tax increases into permanent ones."
We took a lot of heat for saying that. Legislators, a local think-tank intellectual and an Internet fulminator all declared we were flat wrong about SB 5498, and that it did not silently transform anything. We believe it has, and that the law needs to be restored to what it was. In passing Initiative 747, the voters of Washington imposed a 1 percent limit per year on how much a taxing district can increase its gross collections from existing properties. According to the Department of Revenue, SB 5498 changed how this works.
If a multi-year tax levy ends and is not renewed, the next year's tax is controlled by the limit. But 1 percent above what? The old rule was that unless otherwise stated, it was 1 percent above tax collections had the levy never passed. The new rule is that unless otherwise stated, it is a 1 percent limit on top of the levy.
Here is how it works: Imagine a tax of $100. Increase it by 6 percent a year for six years. In the sixth year, you pay $141.85. Under the old rule, without a new levy the seventh year's maximum tax would fall to $107.21. Under the new rule, it rises to $143.27.
None of this is obvious from reading the bill, which is written in language of classic unclarity. The legislators who insist they did not intend to do this may be believed — though some of them had sponsored other bills at other times that would have made this change openly. But whatever their intentions, the Revenue Department's interpretation stands unless overruled.
In our first editorial, we mistakenly said SB 5498 had been requested by the governor, and we corrected that two days later. Otherwise, we stand by what we said: SB 5498, which was passed by majorities of both houses and signed by the governor, silently transformed temporary increases in taxing capacity into permanent increases in taxing capacity. If that was not what lawmakers meant to do, they should make it their first order of business next year to correct their error.
On July 22, this page raised the alarm about Senate Bill 5498, which we said had "silently transformed what have been temporary tax increases into permanent ones."
We took a lot of heat for saying that. Legislators, a local think-tank intellectual and an Internet fulminator all declared we were flat wrong about SB 5498, and that it did not silently transform anything. We believe it has, and that the law needs to be restored to what it was. In passing Initiative 747, the voters of Washington imposed a 1 percent limit per year on how much a taxing district can increase its gross collections from existing properties. According to the Department of Revenue, SB 5498 changed how this works.
If a multi-year tax levy ends and is not renewed, the next year's tax is controlled by the limit. But 1 percent above what? The old rule was that unless otherwise stated, it was 1 percent above tax collections had the levy never passed. The new rule is that unless otherwise stated, it is a 1 percent limit on top of the levy.
Here is how it works: Imagine a tax of $100. Increase it by 6 percent a year for six years. In the sixth year, you pay $141.85. Under the old rule, without a new levy the seventh year's maximum tax would fall to $107.21. Under the new rule, it rises to $143.27.
None of this is obvious from reading the bill, which is written in language of classic unclarity. The legislators who insist they did not intend to do this may be believed — though some of them had sponsored other bills at other times that would have made this change openly. But whatever their intentions, the Revenue Department's interpretation stands unless overruled.
In our first editorial, we mistakenly said SB 5498 had been requested by the governor, and we corrected that two days later. Otherwise, we stand by what we said: SB 5498, which was passed by majorities of both houses and signed by the governor, silently transformed temporary increases in taxing capacity into permanent increases in taxing capacity. If that was not what lawmakers meant to do, they should make it their first order of business next year to correct their error.