Property-tax deferral passed, signed, in effect

County assessors, Republicans and even some Democratic supporters blasted the second bill of Thursday's one-day special session, a property-tax deferral.

Nevertheless, it became law with the stroke of Gov. Chris Gregoire's pen Thursday night, thanks to support from the Democratic majority and an emergency clause that made it take effect immediately.

"I question personally whether this bill really does help the people it's supposed to help," said Dave Cook, leader of the Washington State Association of County Assessors.

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

The idea is taken from a similar program offered to seniors. But the seniors program fixes the interest owed on unpaid taxes at 5 percent, while the new one will vary, likely starting at 7 percent interest, Cook noted.

People caught by the soaring interest rates in the new sub-prime mortgage crisis would not qualify for the program because it requires them to have been in their homes for five years, he said.

The assessors who have to handle the loans likely would have to process them by hand, not computer, he added.

The 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. An additional $871,000 to $4.7 million in local administrative costs are predicted.

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 one in a thousand" would seek out the aid. "When you are in crisis, you need help, and that is what this bill will do."