Office of Governor Gary Locke
FOR IMMEDIATE RELEASE - February 19, 1997
Contact:  Governor's Communications Office, 360-902-4136

Gov. Locke proposes major property tax cut for homeowners

OLYMPIA - Gov. Gary Locke today announced a major property tax relief package that would give an $111 tax cut to every homeowner next year and $138 by 2001. Locke unveiled his proposal as he vetoed a legislative proposal that would lower taxes for the average homeowner by only $31 per year.


Locke said his tax-relief proposal is both sustainable over the long term and would provide a more equitable distribution of tax reductions between homeowners and businesses.


"Our budget surplus gives us the opportunity to pass meaningful tax relief to both homeowners and businesses," Locke said. "I want a tax-reduction package that is sustainable and does not compromise our ability to fund major priorities such as improvements in education."


Locke noted that in the 1995-97 budget period businesses received $367 million or 91 percent of the tax cuts approved by the Legislature, while homeowners received just $36 million -- or 9 percent - in tax relief. Unlike his own measure Senate Bill 5212 would do nothing to correct the imbalance in tax relief between businesses and homeowners, Locke said.


"Under our proposal, the owner of a modest home in will get the same tax cut as the owner of a luxurious waterfront home. This proposal is truly progressive tax relief, and it will finally give homeowners their fair share of tax cuts compared to business."


In announcing his proposal, Locke called on the Legislature to take a comprehensive look at state budget priorities such as education before approving any more tax cuts. He stressed that he did not want action on his own proposal until he presented his budget in March.


The governor's targeted tax cut for homeowners would give $217 million in tax relief to homeowners in the next biennium. The governor also has called for a business and occupation tax rollback.


Homeowners will receive an annual credit against the state property tax that will be equivalent to exempting the first $29,000 in assessed value of their home from state taxes. In 1998, the credit will return $111 to every homeowner in the state. The credit would grow to $138 by the year 2001.


Locke's veto message to the Legislature said that SB 5212 violates the uniformity requirement of the Constitution by assessing properties differently. He cited a 1995 attorney general's opinion that said value-smoothing as spelled out in the Legislature's proposal would require a constitutional amendment.


Locke said he supports value-smoothing and submitted executive request legislation calling for a constitutional amendment along with his property tax cut.


"But before I ask anybody to approve my tax-relief plan, I'm going to release a budget plan that shows how that proposal lines up with all the state's other responsibilities," Locke stated.

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