Washington’s property tax cap is draining local government. It gets worse every year | Opinion

We often hear from our residents that they expect and need more from local government. Our communities want faster emergency response from police officers and firefighters, access to behavioral health services and substance abuse treatment, better roads (fix those potholes!), more sidewalks and an improved transit infrastructure, added housing that is affordable for all of us, more parks, more libraries — the list goes on.

These are the valued public services our communities desperately want and need, and they look to their cities, counties, library districts, fire districts, public health offices and others to meet these needs.

Local governments work hard to use every dollar efficiently to meet the needs of the communities they serve, but the reality is there are simply too many needs and not enough funding to cover them. Among various reasons for this funding gap is an outdated tax limitation that the 2001 state legislature passed, making it impossible to keep up with inflation.

Expenses have been rising by 3% each year due to inflation but, for the past 24 years, this state law has limited property tax revenues to a 1% increase. It’s no wonder local governments are forced to consider reducing or eliminating services to the communities they serve — because they don’t have the resources to do it all.

The state legislature needs to allow jurisdictions the voluntary option of increasing property tax revenue by 3% each year to keep up with inflation and growing demands on services. The 1% cap on revenue was never based on economic realities and has created a structural imbalance in our ability to cover vital services. The current 1% cap fails to account for inflation and rising costs, let alone the growing needs of our communities. Over time, the compounding effects of this limitation have widened the gap between resources and requirements, leaving local budgets increasingly strained.

Look, we know that no one wants to pay more in taxes. We understand that rising costs affect everyone. However, it might be surprising to know that the impact of this adjustment is expected to be less than $20 per year, per homeowner, on average. And that’s only if a jurisdiction chooses to use the option to increase property tax revenue by 3%. Historically, not all jurisdictions have taken the 1% increase as currently allowed by law. Some may opt not to use the option to increase property taxes while, for other jurisdictions, it will be a lifeline for their communities.

Going from a 1% cap on property tax revenue to 3% isn’t a quick fix for all funding challenges. It would, however, provide another option for jurisdictions to determine the best revenue structure to meet their communities’ needs. It could also reduce reliance on more regressive taxes, such as sales taxes, which disproportionately impact lower-income residents.

Local mayors, council members and commissioners are directly elected by and accountable to residents. It’s well past time to update this outdated and arbitrary cap and allow a small adjustment so that jurisdictions can make optional funding choices to best meet their communities’ needs.

This story was originally published February 6, 2025 at 3:00 AM with the headline "Washington’s property tax cap is draining local government. It gets worse every year | Opinion."