FOR IMMEDIATE RELEASE - July 25, 1996

Lowry warns candidates against giving away state's saving account

OLYMPIA - On the eve of the state's candidacy filing deadline, Gov. Mike Lowry today denounced calls for across-the-board property tax cuts as "fiscally irresponsible campaign promises" that he said would cost the state millions while saving the average homeowner only a few dollars a month.

During a morning news conference, the governor said candidates who promise that their first order of business in January will be property tax relief ought to do a better job of telling voters the whole story that while some large businesses would save tens of thousands of dollars every month, most homeowners probably wouldn't notice the difference in their property tax bills.

Worse yet, he said, the state would likely lose hundreds of millions of dollars in programs and services that Washingtonians have come to expect; programs that add to people's overall quality of life and have played a key role in the state's recent economic turnaround.

"It's no accident that world-class companies are choosing to locate in our state," Lowry said, "or that our job growth is double the national average. Our targeted business tax incentives and our exceptional quality of life including environmental safeguards and worker retraining efforts are bringing jobs to the state. To threaten those programs and our state's fiscal stability for the sake of less than $3 a month per homeowner makes absolutely no sense."

Lowry said one proposal to make permanent a temporary 4.7 percent property tax cut and reduce property taxes by another 5 percent would add up to about $265 million in lost state revenue over two years an amount he says would be enough to help 2,600 students attend college or help another 120,000 people afford basic health insurance.

"When I travel around the state, people aren't saying, 'please find a way to save me $3 a month on my property taxes,'" Lowry said. "They're telling me they can't afford to send their kids to college, or they need help paying for child care, or health insurance, or they're worried about crime and want to make sure there are enough police officers on the streets.

"Those are the concerns I hear about, those are the things that people expect government to help them with, and those are the services that are threatened when people talk about spending the state's savings account on fiscally irresponsible campaign promises."

Lowry said his opposition to blanket property tax cuts doesn't mean that state lawmakers can't do more to help homeowners who really need help, including older and low-income people whose property taxes consume a significant percentage of their earnings.

"Property tax relief can, and should, be part of an overall package of expenditures and tax incentives that will add to our state's economic strength, not subtract from it," Lowry said. "It must not threaten the environment, education, public safety, or our exceptional quality of life. And it simply must be targeted to help people who most need help those who stand to lose their homes."

The governor added that calls for sweeping property tax relief are likely fueled by myths and misinformation about how Washington's overall tax burden compares with that of other states. According to the most recent report by the state Department of Revenue, Washington ranked 25th among all states in property taxes per $1,000 of personal income far below Oregon, which ranked 14th.

Also, state general fund taxes have declined steadily over the past few years. During the 1997-99 biennium, taxpayers will actually pay less in state taxes than before Lowry took office. Meanwhile, the governor's efforts to streamline government have significantly reduced the increase in the number of non-education state workers, from 5,761 during fiscal year 1990-93 to only 745 from 1993 to date.

Finally, Lowry disputed arguments that the state's healthy reserve fund (expected to total about $516 million by the end of the 1995-97 biennium) justifies the call for broad property tax cuts.

"The state's reserve fund is like any other savings account we add to it when the economy is strong, and draw from it when critical needs arise," he said. "Promising ongoing tax cuts based solely on a healthy reserve fund is like committing to a 30-year mortgage because you received a Christmas bonus. That's one of the surest ways to jeopardize fiscal stability."

For more information, contact the Governor's Communications Office, 360-753-6790.