Thursday, July 06, 2017

Seattle metro's inflated property values make it a sitting duck for funding state needs

I recently read Danny Westneat's July 5 column in Seattle Times. Seattle gets rolled in Olympia tax deal.

Here's another case where property value inflation leads to problems. Seattle metro's high property values make it a "sitting duck target" for state government struggling to find money to fund the McCleary school funding court mandate.

They balanced the budget with property taxes.

I (personally) might think that is okay. Not being a property owner, myself, I tend to think homeowners are all getting rich from growing equity. This, tho, isn't always the case. Those inflated property values are just the "new norm" that people have to deal with to afford living in our urban areas. Also, renters get hit too as property taxes get passed on in the form of higher rents.

Other forms of taxes, that also address the income gap in more accurate ways, aren't done in Washington State. In spite of being a "blue state," Washington has no state income tax. A good thing about income taxes is that they can be graduated so higher income people pay more.

Some forms of capital gains taxes can work also; like maybe when people sell property at a huge windfall. These kind of taxes don't usually pass in this state either.

We also keep missing opportunities to pass carbon taxes.

Here in Whatcom County, there is a pressing need to address our inadequate county jail. An expensive task. Plans for a big new jail have relied on local sales tax add-on; Washington's "workhorse" tax. Regressive. The last jail ballot measure failed. It would have raised local sales taxes to the limit which state conservatives have imposed (I-601 limits). Conservatives tend to support things like jails, but those sorts of things bust tax limits. Last year, as I remember, the Bellingham police guild feared that the jail tax would limit our ability to fund expansions to fire stations and other public safety. Crippling our local funding abilities for a whole 30 years.

In our city of Bellingham, which is more blue than rural county areas, I remember that our mayor suggested part of that bill, for the new jail, be covered by property taxes rather than all from the sales tax. Maybe a 50/50 split? Take some of the burden off of just the sales tax.

A jail expansion plan is heading back to the ballot, but I think it's still just a sales tax again.

Many liberals also think the plans for a new county jail are too large. There's a lot of local advocacy for alternatives to incarceration.

Come to think about it, some people think of schools as being prisons also. Large, institutional and costly.

Education is a valuable thing, but Washington may be unique in it's constitutional wording of education as it's top priority; the wording behind McCleary. Unfortunately this often leads to a "zero sum" battle between schools and other important state needs; such as social services, public safety, environmental protection and state parks.

We tend to suffer from "compartmental thinking." Put money in the compartment called "school" to have an enlightened society. I worry if the institutions of education cannibalize other things. Not that I don't value teachers and schools. Instead, I like to think more holistically. The job of teachers becomes harder if the rest of society is neglected. It's all part of a tapestry of society. State parks, for instance, can help education by preserving historic and natural places and presenting them to the public. Destinations for class field trips, if nothing else.

Another part of the tapestry is for people to pay their fair share in taxes. Graduated taxes on windfall profits and high personal incomes are best. Taxing business can be a problem that stifles business. It's better to tax the huge incomes and windfall profits that certain individuals make from business.

I guess property taxes have the same problem. Taxing landlords, for instance, is a problem as they pass that increase on to renters. Maybe it's better to try and tax the windfall profits that so often happen when property changes hands. Maybe that would cool down the inflated real estate market that's becoming so much of a problem in our prosperous urban areas.

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