House of Representatives
Office of Program Research
This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.
Brief Description: Providing property tax relief by reducing calendar year 2019 state property taxes and redirecting revenue to the education legacy trust account for fiscal year 2019.
Sponsors: Senate Committee on Ways & Means (originally sponsored by Senators Mullet, Rolfes, Dhingra and Frockt).
Staff: Richelle Geiger (786-7139).
State Property Tax Levies.
All real property is subject to a tax each year based on the highest and best use, unless a specific exemption is provided by law. The annual growth of all regular property tax levy revenue other than the state levies is limited as follows:
For jurisdictions with a population of less than 10,000, revenue growth is limited to 1 percent.
For jurisdictions with a population of 10,000 or more, revenue growth is limited to the lesser of inflation or 1 percent plus the value of new construction.
The state collects two regular property tax levies for common schools. The original state levy was first imposed when Washington achieved statehood in 1889. In 2017 the Legislature adopted Engrossed House Bill 2242, which created the additional state levy. For taxes levied for collection in calendar years 2018–2021, the combined rate for both state levies is $2.70 per $1,000 of AV. The revenue growth limit does not apply to the state levies during this time. Beginning with taxes levied for collection in calendar year 2022 and thereafter, the revenue growth limit applies to both levies. Participants in the senior citizens, individuals with disabilities, and qualifying veterans property tax exemption program receive a partial exemption from the original state levy and a full exemption from the additional state levy. The revenue generated by both state levies is deposited into the State General Fund.
Education Legacy Trust Account.
The Education Legacy Trust Account is an appropriated account that may only be used for the support of the common schools and for expanding access to higher education through funding for new enrollments, financial aid, and other improvement efforts.
Summary of Bill:
The combined state levy rate is reduced to $2.40 per $1,000 of AV for taxes levied for collection in 2019. The original state levy rate is unchanged by the bill. The additional state levy rate is set to the rate necessary to bring the aggregate rate to $2.40 per $1,000 of AV for taxes levied for collection in 2019.
In fiscal year 2019, $935,000,000 of the revenue generated by the additional state levy is redirected to the Education Legacy Trust Account.
Fiscal Note: Updated fiscal note requested on March 7, 2018.
Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.