Gregoire: More tax reform after special session?

• Published November 26, 2007

Gov. Chris Gregoire says a bigger look at Washington’s property tax system “absolutely” is needed next year, but she isn’t yet putting forward her own ideas for fixing the system.

Her legislative director, Marty Brown, explained Monday that the Democrat might offer her own proposals to the 2008 Legislature in January. But it’s still too early to say for sure what she’ll do in the election-year session.

In the meantime, she’s focused on getting two bills passed Thursday when lawmakers meet for a special one-day session triggered by the Supreme Court ruling two weeks ago that struck down the state’s five-year-old cap on property-tax increases.

One is a simple re-enactment of Initiative 747, which capped yearly increases in local governments’ property-tax collections to 1 percent, plus extra for the value of new construction. The other is a Senate proposal to let people with incomes below the state median, $57,000, defer a quarter of their home-tax payments until the homes are sold.

“I think she’s talking to folks after the special session about what’s next,’’ Brown said Monday. “Everyone she talked to said this is just the tip of the iceberg …”

The Senate came up with the idea of the tax deferral program. Gregoire agreed to ask for it only after Senate leaders asked her last week, Brown said.

The governor told reporters Monday that 7,500 people would likely take advantage of that program in 2009, if legislators approve it, and the state would need to pay about $3.5 million to $4 million to bridge local governments’ delayed revenues.

Initiative sponsor Tim Eyman cited an anti-tax mood in the Nov. 6 election results. Voters approved another of his tax-limiting measures while also rejecting a massive transportation tax package for King, Pierce and Snohomish counties.

Two weeks later the Supreme Court threw out Initiative 747’s 1 percent cap on property tax increases, which put Gregoire on the spot.

Gregoire has been under intense pressure from Republicans, including gubernatorial challenger Dino Rossi, and I-747 sponsor Tim Eyman to call for the special session and adopt the 1 percent cap. Senate Majority Leader Lisa Brown, D-Spokane, and House Speaker Frank Chopp, D-Seattle, both polled members and have enough votes to pass it, Gregoire said.