Despite all their talk about forcing the wealthy in our state to pay more taxes, Olympia’s majority Democrats seem to have no problem forcing others to pay more as well.
The proposals in the record-breaking $20 billion tax package made public March 20 by Senate Democrats include new legislation that would allow dramatic and unpredictable increases in state and local property-tax rates.
If passed, Senate Bill 5798 would affect nearly every property owner in the state — not just wealthy Washingtonians.
In February 2024, for the second time in as many years, Democrats attempted to lift the long-standing 1% cap on the growth of state and local property taxes.
Their bill would have tripled the rate of growth allowed each year without voter approval. But with members of the public applying pressure from outside Olympia and Republican senators openly preparing for a fight on the floor of the Senate chamber, its Democrat supporters gave up.
We didn’t think this defeat would cause Democrats to give up completely on the idea of replacing the 1% cap, which dated to the passage of Initiative 747 all the way back in 2001.
We were right. They introduced the same legislation again this year, as House Bill 1334. That proposal has been sitting in a House committee for nearly six weeks; it could begin moving at any time.
But Senate Democrats are no longer looking to merely replace the 1% cap. The new proposal, SB 5798, would do away with any cap on “councilmanic” property-tax increases and instead tie the property-tax rate to inflation plus population growth.
Had that formula been in place in 2023, the rate could have increased that year by 6.74%, simply through a vote of the local council or commission. Last year the rate could have gone up again by 4.68% without voter approval.
In 2024 it was estimated that going to a 3% cap would cost Washingtonians $12 billion more over 10 years. A longer look back at the combination of inflation and population growth in our state suggests an annual increase of 4.5% — meaning for property owners, the Democrats’ new tax policy is a case of going from bad to worse.
In December, the Senate Democrats made it very clear that they intended to go after Washington’s wealthy residents for more money. They even described people with wealth as villains.
We heard it again when they rolled out their massive tax package yesterday. They described how their plan is “asking the wealthiest among us to finally do their part and pay what they owe.”
How, then, did everyday property owners also end up being targeted? Are Democrats delivering one message to one audience and a completely opposite message to another?
Achieving the American dream of homeownership is not enough to qualify someone as wealthy, but our Democratic colleagues seem to think it is — at least when taxes are involved.
The $20 billion tax package also contains another try at what Senate Democrats call a wealth tax. It’s one of the “mega-taxes” I mentioned in this space in February.
In truth, Senate Bill 5797 is a new kind of property tax — but instead of taxing people for owning land, it would tax people for simply owning a certain volume of stocks, bonds and other intangible assets.
Like the capital-gains tax that Democrats have already tried to apply to more people, this tax on unrealized gains on intangibles is also based on a threshold that could easily be lowered to snare more Washingtonians at any time. History shows taxes on the so-called wealthy always find their way to hit middle-income families as well.
A second mega-tax in the Senate majority’s tax package is SB 5796, which would basically mimic the payroll tax already being imposed by the city of Seattle. This new tax would be applied to nearly 5,300 Washington employers: the tech industry, professional services, finance, real estate and health care. Will businesses remain in Washington if we continue to tax them even more?
All of those taxes are damaging, but neither the mega-taxes nor the 20 other smaller tax increases in the Democrats’ package pose as much of a threat to lower- and middle-income families as the majority’s effort to increase property taxes.
That’s not true only for families who own homes. Property taxes also affect the cost of rent. If Democrats succeed in adding Washington to the very short list of states that impose rent control, it’s easy to imagine how housing providers might choose to get out of the market if they can’t raise rent enough to cover higher property taxes on top of other operating expenses. Every rental that would be sold, as a result, would be another rental made unavailable to people who are desperate for more affordable housing.
Washington has an acute shortage of affordable housing as it is. Allowing property taxes to grow at a rate two, three, five times more than today’s predictable 1% could mean higher rent prices, less supply or both. That would only make the shortage more acute.
Keep in mind that Senate Democrats introduced this unprecedented package of taxes more than a week after Senate Republicans unveiled our no-new-taxes, no-cuts $ave Washington budget. The majority had ample time to see how we avoided tax increases entirely, yet it went $20 billion in the other direction.
I suspect Sen. Nikki Torres, our assistant leader on the operating budget, got it right when she suggested the Democrats have wanted tax increases like these for years, and are using the budget shortfall as a convenient new excuse to try for them again.
Whatever the reason, $20 billion in additional taxes is the wrong direction for our state.
Sen. John Braun of Centralia serves the 20th Legislative District, which spans parts of four counties from Yelm to Vancouver. He became Senate Republican leader in 2020.
