Senate approves property-tax deferral without single GOP vote

Senate Democrats approved a tax-deferral program for low and moderate income homeowners today, passing it on a party-line vote over objections that the bill needed more work to refine it.

Four Democrats voted against the measure -- including Sen. Tim Sheldon of Potlatch, who said he wanted to see it worked in more detail. Republicans including Sen. Don Benton of Vancouver harshly criticized it as a kind of predatory lending scheme that would put the state in the business of taking people’s homes if they couldn’t pay.

“I find it appalling quite frankly that this bill is before us,’’ Benton said. “This is predatory lending; if this was a company doing this we would be having hearings. … Why don’t we reduce the tax instead?”

Sen. Karen Fraser, D-Thurston County, was among those advocating the measure, calling Substitute Senate Bill 6178 a way to give immediate relief to a few who are struggling to keep their homes.

“I think we all know this is not a comprehensive property tax reform bill or relief bill. This is a … lifeline bill for some people,” Fraser said, adding that “maybe 1 in a thousand” would seek out the aid. “When you are in crisis you need help, and that is what this bill will do.’’

As proposed by Democratic Sen. Claudia Kauffman, D-Kent, the measure allows homeowners with incomes of $57,000 or below to defer half of their yearly property taxes until their homes are sold. About 366,000 homeowners would qualify but 5,500 would be expected to participate next year and 6,900 by 2011, according to House Finance Committee data.

Cost to the state to cover lost payments to counties would be $5.8 million to $13.8 million in the 2009-2011 budget cycle. Another $871,000 to $4.7 million in local administrative costs are predicted.

The measure goes to the House where a close vote is expected.

In committee, Senate Republicans teamed up with Democratic Sen. Steve Hobbs on an amendment that would have turned the tax-deferral program into a study bill. Sen. Craig Pridemore, D-Vancouver, provided the key vote to pass it.

That proposal later was overturned when Sen. Darlene Fairley, D-Lake Forest Park, quickly sided with the prevailing side and then asked for reconsideration.

On the second vote, the amendment was killed because Pridemore withheld his support and Fairley voted against it. By the time the measure got to the floor, Pridemore stuck with his caucus and voted for it.

Senate Democrats conceded their proposal barely had been kept alive and predicted a close vote in the House. But in the end, Senate Democrats’ staff director Rich Nafziger said it should pass.

Some House lawmakers were plainly uneasy about voting for a measure they had not heard much about, and on such short notice.

“I admit I don’t really know all the implications,” said Rep. Kathy Haigh, D-Shelton. “I’m going to try to keep my head down and I’m going to vote as my caucus needs me to. On the surface it sounds good.’’