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State lawmakers consider changing property tax cap

House Democratic budget negotiators speak with the media ahead of a vote on a supplemental budget deal, Tuesday, March 29, 2016 in Olympia, Wash. From left to right: Pat Sullivan, Kristine Lytton and Hans Dunshee. Lytton says that both Republicans and Democrats have proposals to end the 1 percent property tax limitation during the 2017 session. (AP Photo/Rachel La Corte)

Democrats in Olympia have a plan to remove a barrier that has prevented local governments from increasing their property tax. And they aren’t alone.

“Even the Senate Republicans concur that the limiting 1 percent property tax (cap) is hurting our local governments,” Representative Kristine Lytton told KIRO Radio’s Dave Ross. “They have it in their new state property tax proposal — that eliminates the cap.”

Related: Can Seattle really stomach more taxes?

The Democrats, however, are currently moving their own proposal through the House Finance Committee that Lytton chairs. That proposal, House Bill 1764, would alter how property taxes in Washington can be raised — setting it at population plus inflation, with a 5-percent cap. Anything beyond a 5-percent property tax raise would have to go to a vote of the people or be done through council member action.

Washington currently has a cap on property tax hikes — 1 percent annually. But with both Republicans and Democrats proposing budget options, Lytton points out, it seems the state’s 1-percent cap could be coming to an end.

“We actually have bi-partisan support in the House,” Lytton said. “The Senate Republicans, in their tax proposal, they are raising property taxes – it’s a massive property tax increase. And they are eliminating the 1-percent cap … realizing it is a problem.”

“(The committee) heard a lot of compelling testimonies, from our counties in particular, around public safety … that we needed to move forward with helping our local county governments who rely on property taxes,” Lytton said about the House bill. “That it was time to move beyond the Tim Eyman 1990-era policies that suppress the good work that our local communities can do to provide public safety.”

Why raise the property tax cap?

The proposals to remodel the tax structure in Washington also come as lawmakers are tasked with fully funding education in the state. Both Republicans and Democrats are trying to find ways to accomplish the steep financial task.

“I recognize that our state’s tax code is regressive,” Lytton said. “It’s upside down. It’s limiting our local governments in many ways, but I also know that people strongly dislike property taxes. It will be a heavy lift. I want to have this option available for us as we move through the legislative process.”

Lytton said that HB 1764 will move out of committee soon and continue through the House process in Olympia.

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