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November 13, 2007

Not everyone happy to see Dems back tax limit

Posted by David Postman at 8:23 AM

Gov. Christine Gregoire was quick to call for a 1 percent cap on property tax increases after the Supreme Court threw out the voter-approved limits in I-747. And while that went against what Gregoire had earlier thought was a workable limit, many of her supporters were quick to back the governor's move as a political necessity that would do little harm — see comments here and here.

But not all Democrats are so forgiving. Daniel Kirkdorffer writes at On the Road to 2008 that "a 1% cap on any tax increase is an illogical, and unrealistic limitation."

He says the governor was pushed into supporting the limit by her Republican opponent, Dino Rossi and I-747 sponsor Tim Eyman.

I-747 proponents will tell you "the will of the people" is at stake here. Oh really? November 2001 turnout was only 45.51%, meaning only 25.11% of eligible voters actually voted for it. That's hardly a huge representation of "the will of the people", and it was 6 years ago. Since then our purchasing power has declined significantly as the dollar has tanked against world currencies and commodities have become far more expensive.

We live in a different world.

In a rare slap at a ruling Democrat, Andrew Villeneuve at the Northwest Progressive Institute Official Blog suggests Gregoire is a sell-out.

Reimposing Eyman-style draconian limits is the wrong answer, and Democrats who are talking about doing just that are selling out on their values and failing to lead. It's time to look at ideas like a homestead exemption or a circuit breaker. It's time for Olympia to fix this problem and not surrender to Tim Eyman and his allies, including Dino Rossi. And it's definitely time for the progressive movement in Washington to go on the offense and fight for real fiscal responsibility.

At Washblog, Noemie Maxwell says reinstating the Eyman-authored tax cap would be a boon to the rich.

A 1% cap on property tax is, in fact, a tax cut — as this is below the rate of inflation. It has regressive impact in a state with already seriously regressive tax structure, giving more advantage to wealthier people (the percentage-based savings on a $2 million house is a bit more than what I save on my house, for example). It has serious negative impact on rural areas especially. And it starves the funding for public services and infrastructure.

There's still some question about how enthusiastic Senate Democrats are about the plan. But it's a good bet that the 2008 Legislature will approve a 1 percent cap on property tax increases. In fact, as Peter Callaghan makes clear in his column this morning, recent history tells us the odds are even better than a good bet.

Gregoire's decision shouldn't come as a surprise. It is an election year, after all. And the cap did pass easily. And the voters just passed another Eyman initiative that makes it more difficult to raise taxes. And most governments are doing okay financially, so there is no immediate fiscal crisis.

All that — plus the aforementioned tendency of politicians to join popular parades rather than stand in front of them — makes the 1 percent cap a near certainty.

Conventional wisdom would tell you that there's little political downside to Gregoire backing the conservative's tax limit. After all, the likes of Kirkdorffer, Villeneuve and Maxwell aren't going to vote for Rossi next November. But one of the lessons of Gregoire's thin victory in 2004 is that sometimes voters just don't vote. That year many Democrats voted for John Kerry and Patty Murray, but skipped the governor's race. The balancing act for Gregoire is to know how much she can afford to ignore the left-leaning side of her base.

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