PART OF SON OF 695 IS A REALLY BAD IDEA

Tim Eymans brilliant packaging, organization and promotion of citizen initiatives has given hope in the struggle to contain the growth of government. Son Of 695 is on target except for the element that would bring the inequitable property tax provisions of Californias Proposition 13 to Washington. This would render a burdensome property tax system even worse. This is a really bad idea and heres why:

The current Son-of-695 draft would limit assessed value increases to 2% annually on individual properties until they change ownership -at which time the property would be reassessed at current value. This sounds good on the surface to those people who (mistakenly) believe that they will never move from the house they live in now. Unfortunately, this simple-minded, short-sighted, and selfish view neglects to consider:  People move for many reasons: Children leave the nest. Couples need more room when starting a family. Older people may want to downsize when children leave. Still older homeowners, widowed persons, and the infirm may want to move to a condo, a rental apartment, or a rest home.  People move involuntarily: A change of employment, life situation, or income may force someone to move.  Later buyers of property (of any kind) will find themselves paying more in taxes than other identical properties. Renters will find themselves paying higher rents depending solely on when the last owner bought the property. This arbitrary distribution of taxes will apply to commercial property as well.  This results in massive inequities between taxpayers regardless of income or ability to pay. Worse yet, taxes avoided by properties that havent changed hands will be shifted to those that have.  You may think that you will come out ahead. However, (ignoring the negative impacts on your children, your parents, and your friends ) consider - after 15 years, the effect of Proposition 13 was that only 43% of homes had not changed hands. These were under-assessed by up to a factor of five. This means that property taxes on two identical properties would differ by 500%! Is this a rational approach to taxation? Absolutely not!  This approach is probably unconstitutional in Washington. Why jeopardize the other parts of a hard-earned initiative effort?  When voters realize the inequities and unintended consequences of this part they will defeat the entire initiative.

This feature must be dropped. Instead, the existing 106% limit on overall property tax increases must be reduced to 102%, and/or some other viable, fair and realistic feature.

Paul Telford Citizen Activist, Olympia Former Chair, Reform Party of Washington

-- Paul Telford (telfordp@olywa.net), December 23, 1999

Answers

Fine- YOU sponsor an initiative limiting it to 98% of last years. The INTENT, Paul, is to decrease the size of government.

-- Mark Stilson (mark842@hotmail.com), December 23, 1999.

That's nice Mark. Well we really screwed a lot of people, but hey, we had good intentions!

Heck, want to make government smaller? Since we spend so much on education why don't we just kill off 3/4 of all the kids in the state. Then we can lay off a whole bunch of teachers and sell off most of the schools!

There's a difference between intending to do something and then actually doing what you indended to do responsibly. As Paul points out, the Son of 695 would be amazingly unfair to a lot of people. Is that what you intend to do?

-- Patrick (patrick1142@yahoo.com), December 23, 1999.

The intent of this tax was for the war effort,when the war (refering to the 2nd world war)ended this tax was to be repelled but it wasn't,I suggest that the goverment cut back on thier wages and see if they can live in their so called budget.I know that can't or won't because they are so use to get their way.I-695 ccause some people to lose their jobs but isn't time that goverment take a hold of the budget,and realize that the working man is getting tired of tax and spend.People need to rely on them selfs instead of the goverment.

-- Bruce Dix (dixbutch@aol.com), December 23, 1999.

Patrick,

You really don't get it....."Heck, want to make government smaller? Since we spend so much on education why don't we just kill off 3/4 of all the kids in the state. Then we can lay off a whole bunch of teachers and sell off most of the schools!"

Try using the same amount of money as tax breaks for home schooling or private school choices and you could still lay off a whole bunch of teachers and sell off most of the schools.

You think throwing more money away on Education is a good idea? Public education is not getting better, it's getting worse.

Public school teachers managed to teach my son he wasn't all that bright. At 23, he is just now overcoming some of the constraints of public education and realizing just how intelligent he is. I should have kept him away from that environment.

My answer to the problem was to get more involved with his school, be a volunteer. It was a waste of time. Politics between teachers and admin were taking up more time than education. Angry teachers are not usually good teachers.

Bad teachers should go away and find something else to do. Good teachers, with proven results, should create and operate private schools.

As long as it comes from tax payers pockets, you're all for it!

-- Marsha (acorn_nut@hotmail.com), December 23, 1999.

"There's a difference between intending to do something and then actually doing what you indended to do responsibly. As Paul points out, the Son of 695 would be amazingly unfair to a lot of people. Is that what you intend to do? " Actually, I believe that EVERYONE will benefit by decreasing the overhead costs of government. If some benefit more than others, I can live with that.

"I think we have more machinery of government than is necessary, too many parasites living on the labor of the industrious." Sir Francis Bacon (1561-1626) English philosopher, essayist, statesman

-- Mark Stilson (mark842@hotmail.com), December 23, 1999.

Paul

As you know from our many e-mail exchanges, the "son of 695" group has very carefully considered you comments and have rejected them because:

(1) You are playing the "class envy" card similar to the one used with I-695 that "it's not fair for someone driving an older car to pay the same amount as someone driving a new car." You call limiting property valuations simple-minded, shortsighted, and selfish. Your basic information comes from the ultra liberal Public Policy Institue of California (a long time enemy of Prop 13).

(2) California's Prop 13 method of limiting property valuations and thus taxes has proven effective and continues to be effective in controlling property taxes. If it were not effective, it would have been repealed long ago. Recent polls show it to be very popular with California taxpayers.

(3) You have refused to recognize that EVERYONE benefits when property valuations are limited. Those who have recently sold their property have enjoyed tax relief and will continue to enjoy it with a new purchawse. The new property owner essentially gets an "insurance policy" against rapidly increasing property valuations and property taxes.

Property taxes have been doubling every 7 to 9 years since 1944. "Son of 695" will defuse this "property tax time bomb" and limit growth of government. The US Supreme court recently upheld Prop 13 by a vote of 8 to 1. The WA constitution allow tax credits and exemptions as long as they are uniformily applied. "Son of 695" is uniformily applied to all property.

-- RD (Monte) Benham (rmonteb@aol.com), December 23, 1999.

Benham and others:

It is good to see some discussion of this issue, finally. You still have not addressed all the equity issues I raised in the "Text" thread, some of which are also in the Paul Telford question above. I am still looking for the answers to those questions Monte. What you wrote above does not even begin to deal with them.

"(1) You are playing the "class envy" card similar to the one used with I-695 that "it's not fair for someone driving an older car to pay the same amount as someone driving a new car." You call limiting property valuations simple-minded, shortsighted, and selfish. Your basic information comes from the ultra liberal Public Policy Institue of California (a long time enemy of Prop 13)." Not true. Class envy is a different issue than simple fairness. Two homes in the same neighborhood, with the same value, paying wildly different tax amounts for the same services is not tax equity, as required by OUR state constitution. Address the issue. While you are at it, address the problem of business property that may not be sold, ever. Big business like Boeing could be paying property tax on their holdings at 1999 values (+2%/year) for the next hundred years. The services they need will be paid for by everyone else.

"(2) California's Prop 13 method of limiting property valuations and thus taxes has proven effective and continues to be effective in controlling property taxes. If it were not effective, it would have been repealed long ago. Recent polls show it to be very popular with California taxpayers." California did it by a constitutional amendmant, that is not possible in this state by initiative. "They did it in California" is no arguement. Property taxes are already controlled here by I-695. They can not increase without a vote of the people, an an aggregate basis. What you are trying to do is control taxes an an individual property owner basis, and that causes many equity issues. Valueation is the method used to equitably distribute the tax burden on individual propoerty owners. When you tinker with that, you destroy the equity of the system. I already asked this, with no answer, but I ask again:

What to you do about the property owner of property under valued by 20% or more, that is discovered by the assessor to be under valued? Currently the assessor revalues to the current market value, but does not try to collect the taxes that should have been paid in prior year. The owner of the under valued property that is revalued sees this as a huge increase in property taxes, even though he is just paying what he should have ben paying all along. From the point of view of everyone else, they get a tax break because their under valued neighbor is finally paying his share. Remember that the total tax is already limited, so the value just determines how much each owner pays of the total.

"(3) You have refused to recognize that EVERYONE benefits when property valuations are limited. Those who have recently sold their property have enjoyed tax relief and will continue to enjoy it with a new purchawse. The new property owner essentially gets an "insurance policy" against rapidly increasing property valuations and property taxes." And you refuse to recognize that everyone loses by this proposal. Over time, the level of all service will be drasticly reduced (not just restrained from growth), and the inequities of who payes for those services will get worse and worse.

"Property taxes have been doubling every 7 to 9 years since 1944. "Son of 695" will defuse this "property tax time bomb" and limit growth of government. The US Supreme court recently upheld Prop 13 by a vote of 8 to 1. The WA constitution allow tax credits and exemptions as long as they are uniformily applied. "Son of 695" is uniformily applied to all property." My property taxes have not doubles every 7 to 9 years, and no one else I know is in that situation. If you are talking about total property taxes, that may be true because of new construction and new people paying taxes on new homes and businesses. That is not the problem "son" is intended to address. For property taxes to double every 7 to 9 years, assessed value would need to double and that is not happening unless people build, or their property was under valued to start with. The constitutional prblem with "son" is the Washington Constitution, not the federal. Prop 13 was able to deal with the California constitutional issues by a constitutional amendment. You can't do that by initiative in Washington. The Washington constitution allows the legislature to provide credits and exemptions uniformly applied. "son" is not providing a credit or exemption, it is not proposed to be done by the legislature, and it will not be uniformly applied. Deal with that.

These are just a sample of the issues that still need to be addressed. When are you going to deal with the real issues?

-- dbvz (dbvz@wa.freei.net), December 23, 1999.

Everyone that I talk to praises California's Prop 13. It's what Washington has needed for years!

-- Kristina Meagher (meagher@3-cities.com), December 23, 1999.

d'

"My property taxes have not doubles every 7 to 9 years, and no one else I know is in that situation."

You obviously have not been paying attention to your property tax bills. Let's face it "you work for government and use every opportunity you can to confuse, and otherwise wage a war of fear and terror on taxpayers. You want more taxes because your job depends on them.

If you don't believe that property valuations have driven higher taxes, then you should have no problems with "son of 695."

-- RD (Monte) Benham (rmonteb@aol.com), December 23, 1999.

d,

I doubt my neighbors would lie. Please see

http://www.harstiner.com/news/taxtriv.html

Note this is a private page, maintained by a neighbor. With no affiliations that I know of.

-- Marsha (acorn_nut@hotmail.com), December 23, 1999.

This is classic. Ask a legit question about the initiative, Monte all the sudden starts talking about a terror war and working for the government. How about you just answer the questions posed to you instead of changing the subject and avoiding the issues? You're the one that wants to overhaul our taxation system, you should at least be willing to explain why, instead of running and hiding when somebody asks tough questions.

I'll pose another one. Given the fact that the Washington State Supreme Court struck down Referendum 47's value averaging provision (with a unanimous decision no less), what makes you think that Son of 695's similar (but farther reaching) provision will be successful? Why would the court reverse itself when its last decision dealing with this issue was unanimous, and clearly laid out that properties must be valued equally?

I'll be waiting for your response Monte. And don't pull that fear and terror nonsense, that act's getting old.

-- Slappy (slappy@slappy.slappy), December 23, 1999.

Paul,

As a senior Citizen, I want to remind you of one group you left out in your comments. That is my "senior" group. I am facing losing my home because my taxes are too high for me to pay and after 28 years in my home, I am taxed out of it. When was your last pay increase? My last tax increase was 14% this years taxes and it has averaged 12% per year for the last 28 years.

-- Jim Labyak (jimlab@msn.com), December 23, 1999.

d-

"My property taxes have not doubles every 7 to 9 years, and no one else I know is in that situation."

You need to do the math.

If there was NO INCREASE IN VALUATION and the tax went up by the 601 allowable of 6% per year the tax would be 1.06^8 or 1.60 times the original in nine years. Obviously, it wouldn't take much of an increase in assessed valuation to get to a doubling, particularly if the increase in assessed valuation was early in the nine year period. A modest 15% increase in the third year would yield 1.06^2* (1.15)*(1.06)^7 , about 1.94 times the original tax. With compound interest, it gets real ugly as you approach a decade, even under prop 601. With annual increases in valuations of 5-10% in some areas, I have no doubt that there are real horror stories out there.

-- (craigcar@crosswinds.net), December 23, 1999.

Bruce, the MVET was first enacted in the early 30's. A) the war was about a decade away, and B) even if the war was on, the state didn't really need to raise funds for the war effort. That was the federal government's job.

Marsha, thanks for the unrelated rant. My education example was just a way of showing that even if you have the most noble of intentions, you can still make a VERY bad decision in trying to implement it.

-- Patrick (patrick1142@yahoo.com), December 23, 1999.

"averaged 12% per year for the last 28 years. "

1.12^28= 23.88 times. OUCH!!! See what I mean, d?

And this goes back to our OLD discussion that if a person's taxes increased at 6% per year and inflation averaged less than 6% per year, and the individual's income just kept up with inflation, the share of income going to taxes would continually increase until it became one hundred percent. If this gentleman was paying 4% of his income in taxes at the start of this period, he's almost there now.

-- (craigcar@crosswinds.net), December 23, 1999.

Slappy, what a clever name. NOT!

Taxes rose high enough while in my last home for it to be my main incentive to sell it and move somewhere cheaper.

I'll be damned if I let that happen again.

-- Marsha (acorn_nut@hotmail.com), December 23, 1999.

Patrick,

Your very welcome, anytime. Unrelated? Then don't bring it up in the first place.

-- Marsha (acorn_nut@hotmail.com), December 23, 1999.

Property taxes are an anachronism. They made sense when the property generated income; i.e. when 90% of the population lived on a farm. We should abolish property tax, and the property transfer tax. Taxes on consumption are a better alternative in this day and age.

-- Frank Hemingway (pvtc@aol.com), December 23, 1999.

Craig:

Even if some cases of doubling in 7 - 9 years have occured in the past, THAT PROBLEM WAS ADDRESSED AND RESOLVED BY 695! The only way it can happen in the future is with voter approval of the tax increases. The 6% (called 106%) inflation limit without a vote of the people has already been changed to a ZERO % increase without a vote, so that "problem" is solved. If "son" is passed, it would not deal with that problem at all. What it would do is create a new problem of inequity in the tax system and all the STATE constitutional issues I have not seen an answer to yet.

As for my tax bill, the property value went up 100% in the last 14 years. We have had a constitutional limit of 1% on the property tax, in addition to the 106% and (recently) the IPD limit. We also have statutory limits on individual tax rates by each local government. Your 106% compounded increase in the property tax is impossible in real life, because it would have run up against one or more of the already existing property tax limits (even before 695). What ACTUALLY happens, is that the consitutional limit on the regular levy property tax that can be levied on a $100,000 home is $1,000/year. Excess levies for bonds and the local school levy are extra, by voter approval. When the value of the property doubles (in my case over 14 years) the constitutional limit on the regular levy is $2,000/year on the $200,000 home. In those 14 year, the value of money has deflated, and income levels have inflated, so that in constant value dollars the tax has not increased at all.

Craig, Monte, Marsha, Eyman, etc.: Does anyone have an answer to the state constitutional problem of attempting to create tax inequity, without ammending the constitutional requirement that taxes be applied equally? The California example will not answer, since they DID adopt Prop 13 as a constitutional amendment and that is not possible in Washington. The approval of Prop 13 by the federal Supreme Court will not serve, because compliance with our state constitution is not a federal issue.

Lets try to stay on task. Can anyone address the tax equity and state constitutional issues with some information that actually applies in Washington state? Try not to throw in scare tactics about an out-of-control property tax system, when 695 already addressed that issue and solved it by replacing the 6% limit with 0%. Since property taxes can't increase without voter approval, why is "son" needed?

Monte: I am still looking for those answers. So far your posts do not address them at all.

-- dbvz (dbvz@wa.freei.net), December 23, 1999.

d,

We are not qualifed to be Supreme Court Justices. Just concerned taxpayers. With that in mind, I will give you my opinion.

Monte did state that the "Son of 695" is uniformily applied to all property.

I believe your contention is that while the initiative may be uniformly applied, it will cause a tax inequity, which is not the same thing. This may indeed, qualify to be lawful under the constitution. Depending on the interpretation of the initiative.

Maybe you are right, maybe not. It's certainly worth it to me, to find out.

Just so I am sure what section you are refering to in the Constitution, I will cut and paste.

SECTION 1 TAXATION. The power of taxation shall never be suspended, surrendered or contracted away. All taxes shall be uniform upon the same class of property within the territorial limits of the authority levying the tax and shall be levied and collected for public purposes only. The word "property" as used herein shall mean and include everything, whether tangible or intangible, subject to ownership. All real estate shall constitute one class.

Is this the section you are refering to?

-- Marsha (acorn_nut@hotmail.com), December 24, 1999.

Marsha:

That is part of it. The rest gives the LEGISLATURE the authority to grant credits and exemptions uniformly applied. As I noted before, the section does not authorize the people to do that directly by the initiative process. A modified valuation system is not a "credit or exemption", as those have been used at any time in this state. In any case, the system will not be "uniformly applied" because identical property with identical value and even the same ownership, will not be valued on the same basis. One definition of "uniformly applied" is that the owners of all property could become eligible for the reduced valuation. Another understanding of "uniformly applied" is that property similarly situated must be valued on the same basis. I believe the second understanding better describes how it has been interpreted in the past in this state.

You said it was worth it to you to find out if this is constitutional. I submit it may not be worth it to go through the entire initiative process, and then find out it was a waste of time and effort. This needs to be reviewed by competent legal authorities before everyone spends a lot of energy working for it and against it. So far, all I have seen are posts from Monte that refer to irrelevant Prop 13 decisions. I don't know who everyone would accept as an authoritative source, but perhaps someone from the UW Law School, or a trio of retired Judges could be found to review it. I would also like to know what you find attractive about this. Do you plan to stay put for the rest of your life? Do you benefit if some of the big corporate land owners get a tax break, by not doing a title transfer of their land?

-- dbvz (dbvz@wa.freei.net), December 24, 1999.

d,

Actually, just because Monte did not provide the information you requested, doesn't mean it isn't available.

Your concern that "This needs to be reviewed by competent legal authorities before everyone spends a lot of energy working for it and against it" was actually covered in a press release. It is being presented to the Legistlature BEFORE being brought to the voters. Did you not know that? Is the Legislature any authority on laws or their constitutionality? I do not know how many changes may yet be made as a result of Legislative review.

And yes, this is the most lovely and peaceful place I've ever lived, and I plan to stay here until I die, or enter a nursing home against my will.

-- Marsha (acorn_nut@hotmail.com), December 24, 1999.

Marsha:

No, I didn't know about the legislative review. They can sometimes pass a law that is declared unconstitutional also; but they can get staff lawyers and the State Attorney General to give them an opinion. What I am concerned about is that the anti-government bias of the proponents is so strong they will not accept advice from those sources. I was looking for a legal review that would have some credibility, but is not currently part of the government. The legislative review is a good sign. Perhaps they can avoid some of the problems 695 has.

-- dbvz (dbvz@wa.freei.net), December 24, 1999.

Marsha and dbvz,

Son of 695 is not being presented for a legislative review to determine its legality or constitutionality. It is an initiative to the legislature. There's a big difference.

-- (bbquax@hotmail.com), December 24, 1999.

bbquax, thank you for the information. It seems my optimism was misplaced. Those drafting "son" didn't learn from the inept research that produced 695, so they appear to be repeating the mistake.

For Marsha, I have seen no response to my E-mail to the address you provided either. It looks to me like they have their minds made up, and don't want to bother investigating the facts. We should remember that Eyman is something of a salesman, and with no real experience in government. Salesmen rarely know how anythng works, but they know how to convince you to buy it anyway. Have you seen a later version of the text than what I posted, or is that it?

For Monte, I am still looking for some kind of explanation of how you expect to get this past the state Supreme Court. Do you intend to address the tax equity problem, and the constitutionality problems (plural)? How do you respond to the problem that even if you are right about this being a permitted "credit or exemption" (which I doubt), the constitution grants authority to the LEGISLATURE to extend those uniformly to a class of property? Who is your "legal team" anyway? If you hire some qualified people to help defend 695 in the several court cases, perhaps they could look at "son" and give some advice.

-- dbvz (dbvz@wa.freei.net), December 25, 1999.

Just to clarify things, I'm not exactly sure what the point is behind drafting the initiatives in the form of "to the legislature." The legislature doesn't usually perform a review on these sort of things unless enough signatures are gathered to require it to be brought before the legislature in the first place. Since Eyman has already stated that he isn't going to collect signatures for such an attempt, the legislature is almost certainly not going to review it.

However, as an extra civics lesson, IF an initiative is brought before the legislature, they have several options. The first is they can pass it and it automatically goes into law. The second is to either reject or do nothing with it. It then automatically goes to a vote of the people at the next general election. The final option is to offer an alternative to the initiative and have the voters decided on either of the two or neither of them. Officially, the legislature can't do any amending to an initiative. It HAS to be presented to the voters in the form it was presented to the legislature.

My only guess as to why these initiatives were filed as to the legislature was to get some unofficial legal reviews. Since they did screw up with that personal property tax exemption on 695, I imagine that these new initiatives are rough drafts. They put them on file, a bunch of legal experts pick them apart, point out all the mistakes, and when Eyman goes in to submit them as initiatives to the people, amazingly they are "new and improved." Of course Eyman has already claimed that they're consitutionally sound and without errors, but what do you want to bet that there will be some changes just to make sure that the politicians don't try anything sneaky (translation: we screwed up on the wording, but don't want to admit it.)

-- Patrick (patrick1142@yahoo.com), December 27, 1999.

d,

I had hoped you would have received a response, and no, I have seen nothing in a change of text. (Although, if given a chance, I WOULD suggest an alternative to section 2) But nobody has asked me. And no, I won't tell you what it is. I am tired of being attacked by total morons.

I doubt the Legistlature will IGNORE the latest two Initiatives. Let's hope they have learned something by the passage of I-695. As to the purpose, a legal review is speculation on Patrick's part. It could be Tim is giving the Legislature a break, by giving them a chance to address these issues in the upcoming session, with an acceptable alternative. Just more speculation.

-- Marsha (acorn_nut@hotmail.com), December 27, 1999.

"I doubt the Legistlature will IGNORE the latest two Initiatives. Let's hope they have learned something by the passage of I-695. As to the purpose, a legal review is speculation on Patrick's part. It could be Tim is giving the Legislature a break, by giving them a chance to address these issues in the upcoming session, with an acceptable alternative. Just more speculation."

Note that I didn't say they would ignore the initiative, I just said that they weren't going to review them. As in, hold hearing, have legal staff review them, etc. There is a difference there.

I doubt Eyman is "giving the legislature a break" since it sounds as if he plans to submit the initiatives to the Secretary of State and begin collecting signatures ASAP. Besides, if one believes his rhetoric, the legislature has already failed to address the transportation problem and is, in fact, just punishing the voters by not doing anything. In reality, it's kind of hard for the legislature to do anything since they won't even get together to work on the issue until January 11th. How could they have failed to address the situation if they haven't had time to address it in the first place?

Another theory is that Eyman fears that if he doesn't keep stealing the spotlight, then the legislature might do something that the voters like and he'll fade away into obscurity. Just look at Son of 695. The personal property tax exemption section will be moot when the legislature fixes it this session. The section exempting items sold by the government has been made moot by the AG's definition, the tax repeals may become moot if the courts throw that section of 695 out. That leaves the assessed property valuations section.

Eyman got a taste of political power when 695 passed, and now that the rush from that is fading he wants more of it. Look out boys and girls, Tim Eyman is quickly becoming a power hungry politician.

-- Patrick (patrick1142@yahoo.com), December 27, 1999.

Patrick,

Your personal dislike of Tim Eyman is of no concern to me. I don't know the man, and may not like him if I did. Stick to the topic.

The point of your speculation was what? To harm Tim Eymans reputation and credibility of course..... This has no effect on me other than to wonder what type of person you are. Why would anyone spend all their time worrying about everyones motives?

Your still only speculating on what the Legislature may or may not do. You have no idea what their response will be.

-- Marsha (acorn_nut@hotmail.com), December 27, 1999.

Marsha:

What "morons"? Send it direct to my e-mail if you want to. I promise not to post it here, and I will not attack you for it.

-- dbvz (dbvz@wa.freei.net), December 27, 1999.