Republican legislative leaders today called on Gov. Christine Gregoire and their Democrat counterparts to convene a special session of the Legislature if the state Supreme Court does not move quickly to reinstate the property tax limits set forth in Initiative 747.

A King County judge earlier this month sided with activist groups and declared the voter-approved measure unconstitutional. The GOP lawmakers say if the Supreme Court does not agree to an expedited review on the motion for a stay of the lower court ruling, lawmakers should hold a one-day special session to quickly re-establish the tax-limit measure into law.

“Not only has this ruling threatened every homeowner with a budget-killing property tax rate hike, it has also created a huge temptation for local governments to raise property taxes while the door is open,” said Sen. Mike Hewitt, R-Walla Walla. “Toss those two elements together and you have a recipe for taxing people right out of their homes.”

“The people spoke clearly in 2001: don’t raise our property taxes more than 1 percent a year unless you come to us for approval first. We owe it to them to step forward and restore the 1 percent limit as soon as possible,” said Rep. Richard DeBolt, R-Chehalis. “A special session is the quickest way to shield taxpayers without having to wait for the Supreme Court to act.”

Initiative 747, approved by nearly 58 percent of voters in 2001, limits increases in regular property tax levies to 1 percent per year without voter approval. Increases in regular levies were limited to 6 percent annually without voter approval until voters approved I-747. Since its approval, I-747 has saved taxpayers approximately 1 billion dollars.

The King County court ruling lifts the lid back to a maximum 6 percent, opening the door to property tax increases that could total anywhere from $27 million to $225 million next year.

Attorney General Rob McKenna has filed a motion for direct review of the case before the state Supreme Court. He also has stated his intention to request a stay of the trial court’s order, thus preserving the 1 percent limit pending the Supreme Court decision on the appeal.

Republican leaders say they support McKenna’s decision to appeal and request for a stay. Swift action by either the court or the Legislature would address a dilemma facing local governments, which already are working on their budgets and need to know how much to expect in tax collections.

“We shouldn’t expect cities and counties to put their budget work on hold for a month or two while they wait to see if a stay is granted – not when they need to get tax statements ready and prepare their budgets for next year. And what if a city or county gambles and raises property taxes up to 6 percent, only to have the Supreme Court overturn the lower court’s decision, as we expect it will?” asked DeBolt. “Re-establishing the I-747 limit through legislation would give local governments even more certainty than a stay, and potentially much sooner.”

“Governor Gregoire has said she will work with the Legislature to reach a “compromise” on this issue,” Hewitt pointed out. “But homeowners don’t want a compromise, especially one that could mean tax hikes of 3, 4, 5 or 6 percent. What they want is some reassurance that they won’t be stuck with a huge property tax increase in the near future.

“The Legislature has the ability to step in and quickly reinstate I-747,” Hewitt said. “People are nervous about the King County decision, and they want someone to step in and save them from this looming train wreck. If the courts don’t act quickly, we should.”

Legislators may call themselves into special session, if a majority in each chamber agrees, or the governor may issue the call for lawmakers to convene at the Capitol.

“Property taxes literally hit people ‘where they live’ – it’s the only tax that can cause someone to lose his or her home, and that makes emergency legislative action appropriate,” said Rep. Ed Orcutt, R-Kalama, who serves as Republican leader on the House tax policy committee. “It’s unsettling that the governor and Democrat legislative leaders are talking about siding with the King County court. Any move away from the 1 percent limit will violate the will of the voters and will allow for even larger tax increases.”

"This is an urgent issue, both for homeowners and for local governments," said Sen. Mike Carrell, R-Lakewood. "The King County decision threw a cloud over everyone and left us with a host of unanswered questions. That makes it hard on everyone, including local governments as they are building their budgets. What we need are answers, and we need them soon."

Besides allowing for a jump in property taxes, the lower court’s ruling will have lawmakers and the authors of ballot measures trying to guess what judges might do after policies have been adopted and the laws have been passed, DeBolt added.

“The technicality on which the judge based her ruling stands to cripple the ability of citizens to exercise their constitutional right to initiative and referendum, and the ability of legislators to make laws. That’s reason enough for the Supreme Court to uphold I-747,” said DeBolt.

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